Feeds

Can 1,000 fans replace the music business?

Kevin Kelly's recipe for broken dreams

  • alert
  • submit to reddit

Remote control for virtualized desktops

Does better music mean more fans?

Kelly points out that an increase in fans is in direct proportion to the increase in the creativity of the group. Let's deal with the theory and then some practical realities. To begin, when Kelly states that "if you increase your group size by 33 per cent, you need add only 33 per cent more fans".

But this proposition fails to accommodate the established literature on what's called Baumol's cost disease. This theory examines the phenomenon of areas of the economy that have experienced no increase of labour productivity in response to rising salaries.

For instance, if the music industry pays its musicians 19th century style salaries, the musicians may decide to quit and get a job at an automobile factory where salaries are commensurate to high labour productivity. Hence, musicians' salaries are increased not due to labour productivity increases in the music industry, but rather due to productivity and wage increases in other industries. It’s a hotly disputed theory, but it's well worth considering, as the music industry struggles with reduced demand and increased supply, and other media sectors – which often employ the same external intermediaries - grow.

There are interesting implications for the role of government which follow from the economics of Baumol's cost disease, in that a little intervention from the state could go a long way for the independent artist, given their new internal cost structure. This is something that Kelly gets right.

Let me conclude with a personal and practical example that highlights Kelly’s naïve and simplistic approach to this issue.

Music isn't a formula - nor is the business

For the best part of a decade, I’ve been working in a personal capacity with the legendary Brazilian composer Eumir Deodato, and we're now well on our way to confirming him to perform at the prestigious North Sea Jazz festival in Rotterdam this summer. In order for us to secure the date, we offered a hybrid solution of a five-piece band from New York and then a horn section which would travel up from Italy, as this allowed us to keep within the initial budget. It would be cool to see a nice linear cost structure, but we are already looking at a 'cost malaise' of hiring two tour managers as opposed to one, for example, and two separate sets of flight packages.

Of course, Deodato could have opted for a more economically viable 'Trio' performance, which would have satisfied his existing fans, but given the recent interest in his work via Lupe Fiasco's Paris-Tokyo single, he wants to go that extra mile (and costs) and deliver a show that will win over new fans too.

And you might say "but Deodato is a special case", but then isn't that the point? All creators are a special case in that their works (and the way they are created and performed) are unique. The point is that it just isn't smart to assume a simple mathematical rule of thumb formula can be applied to a creative business like music.

Will Page is the Chief Economist at the MCPS-PRS Alliance, a non-profit collection society representing writers, composers and music publishers in the UK. He writes in a personal capacity. Examples of his work are available at The Alliance's research page.

Choosing a cloud hosting partner with confidence

More from The Register

next story
MI6 oversight report on Lee Rigby murder: US web giants offer 'safe haven for TERRORISM'
PM urged to 'prioritise issue' after Facebook hindsight find
I'll be back (and forward): Hollywood's time travel tribulations
Quick, call the Time Cops to sort out this paradox!
Assange™ slumps back on Ecuador's sofa after detention appeal binned
Swedish court rules there's 'great risk' WikiLeaker will dodge prosecution
NSA mass spying reform KILLED by US Senators
Democrats needed just TWO more votes to keep alive bill reining in some surveillance
prev story

Whitepapers

Driving business with continuous operational intelligence
Introducing an innovative approach offered by ExtraHop for producing continuous operational intelligence.
The total economic impact of Druva inSync
Examining the ROI enterprises may realize by implementing inSync, as they look to improve backup and recovery of endpoint data in a cost-effective manner.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Simplify SSL certificate management across the enterprise
Simple steps to take control of SSL across the enterprise, and recommendations for a management platform for full visibility and single-point of control for these Certificates.