The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [94]
The debate is an empirical matter. Are music revenues rising or falling? As James Boyle has pointed out in his excellent book The Public Domain, there might be more to be earned in other ways in a market growing thanks to a new technology, just as videos grew revenues for the movie studios, when they were introduced, rather than—as the studios vehemently argued at first—decreasing them.14 For example, free access to music online creates more fans from people who might never have heard the performer in the past if they had had to buy a CD for twenty-five dollars. Fans will buy some digital music. They’ll also buy merchandise and attend concerts. Depending on how much the market for a performer’s music grows, these new revenue sources could exceed the amount lost from not selling physical CDs and from the various ways consumers download the music for free online. Threatening to imprison music-loving customers for illegal downloading seems, in this wider perspective, wrongheaded.
There is evidence that the new technologies are indeed growing the music market, despite the extent of (illegal) free downloading. Economists Felix Oberholzer-Gee and Koleman Strumpf conclude in their work:
Overall production figures for the creative industries appear to be consistent with this view that file sharing has not discouraged artists and publishers. While album sales have generally fallen since 2000, the number of albums being created has exploded. In 2000, 35,516 albums were released. Seven years later, 79,695 albums (including 25,159 digital albums) were published (Nielsen SoundScan, 2008). Even if file sharing were the reason that sales have fallen, the new technology does not appear to have exacted a toll on the quantity of music produced.15
They also conclude that “technology increased concert prices, enticing artists to tour more often and, ultimately, raising their overall income.” Growing demand for live music on the part of increasingly affluent consumers who are spending a rising proportion of their income on entertainment in general and music in particular will keep concert prices high. In fact, it will keep concert prices rising relative to the general price level. For it’s possible to charge very large sums for concert attendance. The most popular music festivals are big business. The United Kingdom’s Glastonbury Festival took £24 million in ticket sales for four days of music in 2009. Mama Group’s Live Music division, which includes the Mean Fiddler Group, a concert promoter, had revenues of £30 million that year. The Coachella Value Music Festival in Indio, California, took $15 million for three days of rock and alternative music in 2009; the three-day Lolapaloozza festival in Chicago took $17 million in 2008, and Stagecoach Festival in California took $6 million for two days in 2009. Live Nation, the world’s largest promoter reported $2.5 billion in sales in 2009 from 41 million people attending 9,085 shows. AEG Live had $888 million from 2,531 shows and 12.9 million in attendance. U2’s 360 degree tour in 2009 grossed over $311 million for forty-four shows. It is expected to achieve total gross ticket sales of $750 million by the end of 2010. Michael Jackson’s final tour of the United Kingdom had originally been for ten concerts, but this was increased to fifty to meet demand. More than 1.5 million fans caused two sites offering presale tickets to crash within minutes of going oline. In two hours, 190,000 tickets were sold. Tickets appeared on eBay for as much as £10,000. There is a balance of costs and benefits to the producers of music from switches from one form of consumption to another, but there is still plenty of music consumption.16
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