Record Companies Are Outdated!

The Big Music Project 

The economic principle I’m exploring is: Institutions are the “rules of the game” that influence choices.

My research question to help me study the economic principle is: What laws/rules that record companies put on jazz musicians to lower or raise their income?

The article published in RollingStone, an American monthly magazine founded by Jann Wenner that focuses on popular culture and focus to a younger readership interested in youth-oriented television shows, film actors, and popular music, titled “Musicians Get Only 12 Percent of the Money the Music Industry Makes” demonstrates this economic principle by arguing/showing that practices like recording music with record companies are outdated and take too much money away from musicians. Instead, by using technology such as streaming and live concerts musicians can cutout the middlemen and keep more money for themselves.

RollingStone

Technology has given consumers more options for purchasing music. U.S. listeners spend over $20 billion a year on buying music.  The entire industry including on-demand streams, CD sales, radio play, live events,  have made more than $43 billion a year. However, artists only take home $5 billion, or about 12 percent.

This is because of “value leakage” involved in producing and distributing music, like the costs of running, fixing, streaming, etc… that the record companies have to do. “When you end up tracing all the dollars, around 10 percent of it gets captured by the artist. That’s amazingly low.” I am shocked by this. There are so many musicians out there and if I was dreaming of making it big out there, I would just give it up because it is not worth the hard work and risk of it all. I can’t afford anything with the money they give me.

I believe artists should be able to deliver their music directly to fans and take the majority, if not all, of the profit. But as said by Citigroup’s media, cable and satellite researcher Jason Bazinet, who co-authored the report, tells Rolling Stone that “the music business is still largely operating on the systems that it used to use decades ago, when songs were sold in stores and owned in homes and not licensed and leased via the Internet.” If Internet music companies were to “organically morph into music labels,” as Citi’s research report suggests, or if concert promoters merged with streaming services, the music business would be cutting out superfluous middlemen and offering that money back to artists themselves.” I think this is an excellent idea because musicians should be able to keep more of the money they earn---it's already difficult for artists to get into the industry and make a living.


Eventually, “Citi’s analysts estimate that the friction will decrease over time, however. It notes that artists are already getting more of industry revenue than in past years through avenues like touring and self-releasing music — both of which generate much more money than a traditional record label deal.” I glad that this old custom is being updated. We want music and if the companies don’t change their ways, there is going to be shortage of people wanting new music and not enough musicians dealing it out because of these unfair customs.

In my next blog post I will research the question: Does a jazz musician benefit more from live concerts or records?

hearing vs. deaf culture

nrn.com

The economic principle I’m exploring is “People gain when they trade voluntarily”

 My research question to help me study the economic principle is:
 What is the difference between hearing and deaf culture?

 The article published in Soft Schools titled “Deaf Culture vs Hearing Culture” demonstrates this economic principle by showing That deaf people are able to feel more accepted by forming their own community , Deaf people gave up fitting in and chose to be happier with their own language, and, that it allows deaf people to feel empowered about themselves rather than feeling less than hearing people. 

First, deaf people formed their own communities because they were seen as less than hearing people so they banded together. The reason that this is significant is that it allowed for sign language to develop more fully and become easily learned.

 Second, deaf people chose to separate themselves from the hearing world in order to feel less outcast. By doing this, the deaf community has a very strong bond.

 Third, by Deaf people forming Deaf communities, it allows them to feel empowered and welcomed, rather than like a misfit.

 In my next blog post I will research the question: What is the best way to educate hearing people about the deaf?

Nike's strongest advertisement methods

www.qz.com

The economic principle I’m exploring is how is Nike so effective when it comes to sales.

My research question to help me study the economic principle is what is so strong about Nike’s marketing strategy? 

The article published by Zareem Islam titled “Nike’s Brilliant Marketing Strategy - Why You Should Be (Just) Doing it Too” demonstrates this economic principle by showing that Nike ads consist of emotional branding, release the newest and most innovative technology, and run well set up social media accounts.

First, Nike does a great job when creating advertisements that actually influence the audience to go out and make a change. As the article explains “Each ad is carefully crafted to evoke particular feelings and needs in the consumer that can only be satisfied by Nike products.” which is much more inspiring than just introducing a product. Their main slogan is “Just Do It” which might seem simple but that serves a phrase of inspiration for consumers.

Second, Nike is always staying on top of things and ensuring that they’re releasing the newest technology for their consumers. They have done many “firsts” and one of the most recent ones being the release of Hyper Adapt shoes which are self lacing. Consumers always want to buy the nicest products and in this scenario they see this technology that nobody else has which’ll cause them to go out and buy it.

Third, Nike isn’t afraid to stay in touch with their consumers. They have a bunch of different Instagram and Twitter accounts set up (soccer, football, running, etc.) where they are constantly advertising their products. They also take time to go through twitter comments and actually respond to those people who have questions about their products. These strong relationships that they’re building with their customers through social media ensures that these customers will keep coming back because they feel they’ve built this bond with the company.

In my next blog post I will research the question: How do companies tailor their items to their consumers likes/needs?

How do Tech Companies Use Customer Feedback.

                    Because of scarcity, people choose. All choices have an opportunity cost.

R&D

Today people are so demanding, and if they don’t like a product they will not buy it. This happened to Apple when they released the iPhone 5c. People thought that the phone was nothing new and just a stunt to raise revenue, and it backfired. Apple’s stock price fell and people stopped buying their products. So after that they started using customer feedback to develop new products. According to the website, Myfeelback one big reason Apple has maintained a spot at the top of their industry in because of how much they use customer feedback to guide their R&D endeavors.

 I think that it is crucial to listen to your customers, because they are the people that are buying the products these companies sell. That is one reason that I believe Apple has been atop their industry for so long and are a common household name.

Future Research Question: How do companies use their products to influence society.

Diabetes Medicinal Price Trends

Source: ADA

Institutions are the “rules of the game” that influence choices

 What overall trends are visible in medicinal prices? 

The article published in The American Diabetes Association titled “The Cost of Diabetes” demonstrates this economic principle by showing how prices for Diabetes are increasing exponentially, prices for Diabetes change depending on factors like gender, and Diabetes costs extend past patients, including indirectly affecting other businesses.

                 First, the American Diabetes Association discusses the trends and statistics regarding overall diabetes costs. They talk about the increase in costs between two separate studies, saying that “The estimated total economic cost of diagnosed diabetes in 2017 is $327 billion, a 26% increase from our previous estimate of $245 billion.” This nearly one hundred billion dollar difference is in the span of five years, showing a massive growth in the costs.

                 Next, the ADA discusses some of the trends within these costs. They talk about many of the factors that affect individual costs of diabetes. One such factor is gender. The article is cited saying “Total... health expenditures are higher among men than women ($10,060 vs. $9,110).” They don’t expand on reasons behind this cost gap, but the thousand dollar difference shows that individual pricing may vary, even though overall trends are still increasing. Costs for one diabetic are purely dependent on things like genetics, gender, etc.

                 Finally, the article offers an unconventional way of looking at prices for Diabetes. The article cites many factors that are indirectly affected by the disease, including but not limited to “increased absenteeism and reduced productivity while at work for the employed population… inability to work as a result of disease-related disability… and lost productive capacity due to early mortality.” This quote offers the reader a new way of looking at costs of a disease, something that can highly affect the prices of the medicine we use to treat it. The site also uses specific prices after each factor, in order to help readers understand the impact that this disease can have on not only those that have it but the economy as a whole.

 In my next blog post I will research: What are the current regulations regarding medicinal prices?

Effect of mental illness stigma on society

The economic principle I’m exploring is “Institutions are ‘the rules of the game’ that influence choices".

Courtesy of drdeborahserani.blogspot.com/

My research question to help me study the economic principle is “What are the societal challenges that people with mental illness face?”

The article published in Psychology Today titled The Stigma of Mental Illness Is Making Us Sicker demonstrates this economic principle by showing how stigmas around mental illness came about in the first place, the difficulties that people with mental illness encounter in their daily lives, and how those difficulties further damage their health.

 Stigmas surrounding mental illness come about at a young age. Children are taught words like “weird”, “crazy”, “psycho” and “retarded” in regards to people with mental illness, and these words are commonly misused to create a strong negative connotation surrounding mental illness. Soon, negative perceptions are formed towards the mentally ill, and thus stigmas are formed. I have experienced that often times, mental illness is so closely linked to these negative words that they become nearly synonymous in some people´s opinion, when people use ¨bipolar¨, ¨OCD¨, or ¨anorexic¨, to name a few, colloquially.

 This causes people to distance themselves from people with mental health, sometimes because they feel unsafe. Because of social distances, the mentally ill are subject to isolation and stereotyping. It is easy to be unconsciously discriminated against in the workforce because of misinformation of what their mental illness is. Research shows that being treated poorly can worsen mental illness. The isolation created from social distances can make patients less likely to seek treatment for their illness. I experienced that I almost did not receive treatment because I was worried what people would say when I wasn´t at school. Along with that, the stigma can spread to affect how the mentally ill feel about themselves. Embarrassment is a common thing when it comes to mental illness, which is crazy in my opinion because it´so both very common and should not be very different from physical illness. It would be crazy to be embarrassed about cancer, diabetes, etc.

 In my next blog post, I will research the question: What does the country do to aid those with mental illness?

How do 'No Trade' Clauses,player options, and other contract manipulations help incentivize players to sign with teams?

In the 21st century, we are seeing more and more deals being made with special contract manipulations. Manipulations such as opt-out clauses and no-trade clauses have just as much power to incentivize a player has sheer numbers of dollars and years. In this specific case, found in the article “Boldest January Signings of this Century” written by Matt Kelly of MLB.com, the New York Mets shockingly signed their Cuban superstar, Yoenis Cespedes, to a three year deal with a huge caveat.

The opt out clause after one year. The Mets came off a pennant championship and money was tight going forward in the future so the prospects of bringing back their slugging left fielder was non existent, but “an offer from the rival Nationals spurred New York's front office into action. The Mets convinced Cespedes to ink a three-year deal that included an opt-out clause after the first season. The star outfielder opted out in the fall of '16, before inking a four-year, $110 million deal to stay in Queens.” It worked perfectly for both sides. Cespedes probably wanted security in his contract for 2016 to account for possible injury or poor performance, but still wanted to earn a paycheck comparable to what he believed his skills represented. At the time, my first reaction, was “wow… that front office really had to do some magic to pull that off”. New York’s front office couldn’t afford to sign him long term and maybe didn't want to at the time, but the keep Yoenis from going to their divisional rival they pulled it off. This is one of my favorite deals in history because of the option and the faith that Cespedes had to have in himself, and the faith that the Mets had in him.


            The reason why this article even was written was, because at the time, the free agent market was as cold as any time in history and the two biggest stars of that class, Yu Darvish and Jake Arrietta, were offered contracts finally and were signed. As a Cubs fan and with the 2018 post season wrapped up for my Cubbies I can say that we made the wrong move, but who knows where these two players careers will end up after the 6 years 110 million and 3 years have passed. But this was another example of teams trying to incentivize players. The Cubs who have been notorious for making big moves in the winter the past five years with Jon Lester’s huge deal, Ben Zobrist’s, and Jason Heyward’s which is one I will delve into soon. Both Darvish and Arrieta were offered the same contract but Arrieta declined and Darvish excepted.

Why? I myself having been asking this question over and over again watching Jake pitch a wonderful season in Philadelphia while Darvish is getting neuropic surgery on his shoulder, but in the context of economics its because of the incentives. If the Cubs sprinkled in an opt-out for next year or a no-trade clause Jake most likely would have agreed to that like how he did in Phily with his 3 year deal with TWO opt-outs!

 Next topic question will be "How does money and years on a contract help incentivize players to picking a destination?"