Tuesday, April 27, 2010

Music and Business: Too Much Music

2. Too Much Music
The last 20 years produced remarkable changes in the way music is created and distributed.

The 1990s effectively democratized music production. In 1989 making a record or CD almost certainly meant paying thousands of dollars to go to a recording studio for a few hours and hoping you ended up with something good.

By 1999 however you could make a record at home on your computer. In some cases the quality of the recording wasn't quite as good (limited by your gear and expertise), but you could spend a lot more time on it. From the ADAT to PC-based recording, by now (2010), anyone can make a "record".

Even iPhones can make records via apps ranging from simple instruments (the ocarina) to 4-track recorders. (I am awaiting the inevitable gimmick indie record made "entirely on the iPhone").

Not surprisingly, people are making lots of records: About 300,000 per year with the number steadily climbing. The product of the major labels (EMI, Sony, Universal, and Warner) represent about 10-15% of that number, but the bulk of that represents repackaging of their back catalog, not new artists.

Keep in mind this is a cumulative thing - every new album isn't just competing for ear space with the new albums from that year - it's competing with everything ever recorded - Radiohead's "OK Computer" and Nirvana's "Nevermind" and Run-DMC's "King of Rock" and Led Zeppelin IV and The Beatles and Hank Williams and Enrico Caruso. Every year, every minute it gets harder to be heard over the din.

In economic terms, the supply of music is vastly increasing - a result of dramatic drops in the costs of creation and distribution combined with many more creators. It is not unrealistic to assume that demand would fall as a result. And when demand falls, prices fall. Creators get paid less, as does everyone else in the value chain, because listeners are willing to pay less.

But that's still not the whole story.
Next: Part 3: Now It's Everywhere

1. The Problem Nobody's Talking About
2. Too Much Music?
3. Now It's Everywhere
4. The Audience Isn't Listening
5. What The Internet Really Means


Unknown said...

Similar things can be said about books and movies. There will continue to be a demand, & continue to be a demand for quality.

Stephen Foster's songs in the mid 19th century were hot shit. Top sellers of their day & lasting well bast WWI. When audio recording started, people had minor hit songs with them into the 1940s & 50s, close to a century after they were written. For great songs to be lost to the mainstream over time is just part of history.

Nevertheless, demand for quality songs, stories, information, etc will eventually create a sustaining model that satisfy those needs.

Brad said...

Nice post, Anu. My only quarrel is that from the economic perspective- just because you have increased supply doesn't necessarily mean decreased demand. The demand for *good* music is probably constant, there is just much more supply available. The decreasing price argument still holds, but it's because of the increased supply, not because of the decreased demand. However if you make the decreased demand argument based on the fact that there are many more sources where we could apply our entertainment dollars, you may have something.

Also, thanks for including my distant cousin, Enrico Caruso, in your sample of recordings everyone is competing against. :-)

Anu said...

Thanks for reading!

@ Brad: You're talking about a certain elasticity (or inelasticity) of demand for music. Hard to quantify at the micro level, but at the macro level, I think music is "just another entertainment good".

In the 21st century, it's competing with video games, movies, mobile phone apps, and many other entertainment sources.

At the micro level, individuals may want "quality music", but that's a highly subjective thing. Even for people like me who are picky, if I can't find a particular CD, I can almost certainly "get by" listening to something else.

Enrico Caruso was the earliest "recording star" I could think of. Had no idea you were related!

@ Mike R:
Stephen Foster is arguably responsible for much of copyright reform - his penniless death was used as propaganda advocating much of the copyright law we have today.

People still sing his songs, but they're so deeply ingrained in our culture that people think they're folk songs. I'd say these songs aren't lost so much as they're...ingrown? Overlooked?

But there's a deeper point here. Music is culture, and culture changes. Nobody wears Panama hats anymore, either.

Eventually all culture loses the bulk of its commercial weight. Look at old movies, listen to old music, even read old books. Everything isn't going to be a hit forever.

That's precisely why we need to limit copyright. Like composting food waste, we need to return all that culture to the public domain so it can continue to enrich the next generation.

Hmm...electro Stephen Foster...

Katushka said...

Dear Music lovers, I stepped here by accident, and I dare to invite you to listen to my music at:
http://myspace.com/limbica2009 and
I'm a creator in different ways, painting mostly, singing too... and it's true, I'm one of those who use their "home-made-studio-music-producing"... Hope you like my songs anyway...Thanks!

Shakki said...

In the 90's my music would not probably be heard anywhere.

1) I would not have the money to buy the gear to produce my ideas.
2) I could not distribute it in any sane way.

Now in 2010 some cool guy in Singapore downloads my songs and tells me that he likes them.

1) I can generate great sounds from cheap software. / the price of the 90's hardware is "a bit" cheaper

2) Internet is my label.

Great post Kirk! Looking forward on the next chapter!

Shakki said...

@ Katushka

Your stuff is pretty amazing! I like your voice.