Rockonomics and Its Uses - Finally, economic proof of Elton John’s genius!

In recent years, economists have been drawn to the music industry like lawyers to a car wreck. Napster, Grokster, digital sampling, and Chinese piracy have thrown the industry into chaos. Economists have realized it’s the best place to study what happens when new technologies disrupt established industries. They have also realized it’s really fun.

[...] Why are Cher concerts so expensive? How have falling record sales and the rise of downloading affected big-name stars? And what’s the deal with scalping?

[...] Rockonomics has its limits. Numbers can only tell us so much about a singer’s appeal. And there are questions about the consumer behavior surrounding popular music that not even all the Beautiful Minds assembled at Princeton could begin to attack. Celine Dion, for example, outearned Rod Stewart in the rockonomics survey. Krueger and Connolly asked, “On what objective, cardinal metric is Celine Dion only slightly more talented than Rod Stewart?” Hey, the economist who can find some “objective, cardinal metric” that proves Celine Dion possesses any talent at all should be nominated for a Nobel Prize.

The paper in question: Rockonimics: The Economics of Popular Music

Abstract

This paper considers economic issues and trends in the rock and roll industry, broadly defined. The analysis focuses on concert revenues, the main source of performers’ income. Issues considered include: price measurement; concert price acceleration in the 1990s; the increased concentration of revenue among performers; reasons for the secondary ticket market; methods for ranking performers; copyright protection; and technological change.

More interestingly, the section on file sharing cites a paper I need to find:

Gayer and Shy (2004) present a model of an artist and her publisher, and show that the artist’s revenues are greater under file sharing since the more revenue comes from live concerts, which get better publicity from the distribution of songs on P2P networks.

The cite: Gayer, Amit and Oz Shy (2004), “Publishers, Artists, and Copyright Enforcement“, Unpublished paper (Department of Economics, University of Haifa).

Lots of cool math to work through, but here’s the closing paragraph, with some familiar thoughts:

This short paper highlights the fact that the recent wave of litigations against individuals who illegally use copyrighted material may not be to the best interest of the artists whose recordings are being pirated. Alternatively, artists should reconsider whether to surrender their copyrights to publishers when signing a recording contract. In view of the present model, artists may be better off by signing an exclusive recording contract with one publisher while not surrendering their copyrights. Under this arrangement, the artists themselves will make the decision whether and to what extend enforcement of their intellectual property should be pursued.

No, not the movie — the MPAA working off their setback in losing the broadcast flag mandate: MPAA Shopping Draft Broadcast Flag Legislation

Rather than excerpting here, I recommend you just go and read Ernest’s summary and Donna’s comment and links

Also Slashdot: Broadcast Flag 2 - Electric Boogaloo, citing Declan McCullagh’s FCC’s broadcast flag: It’s back?

Too, too funny - a takeoff on the Huffington Post - a notable celebrity “posting” — Thoughts from a guy who’s got nothing but time

And the end of a brutal week. So, somethign goofy that just struck me today: Reincarnation Confirmed! - The startling results of modeling King Tut’s face

While learning that the MPAA is going after BitTorrent sites with pointers to TV shows leads to a certain sense of overreaching (IMHO), this article from the current New Yorker gave me a new set of things to think about: Brain Candy [pdf] - a review of Everything Bad Is Good for You by Steven Johnson

In the wonderfully entertaining “Everything Bad Is Good for You” (Riverhead; $23.95), Steven Johnson proposes that what is making us smarter is precisely what we thought was making us dumber: popular culture.

[...] [T]elevision is very different now from what it was thirty years ago. It’s harder. A typical episode of “Starsky and Hutch,” in the nineteen-seventies, followed an essentially linear path: two characters, engaged in a single story line, moving toward a decisive conclusion. To watch an episode of “Dallas” today is to be stunned by its glacial pace–by the arduous attempts to establish social relationships, by the excruciating simplicity of the plotline, by how obvious it was. A single episode of “The Sopranos,” by contrast, might follow five narrative threads, involving a dozen characters who weave in and out of the plot. Modern television also requires the viewer to do a lot of what Johnson calls “filling in,” as in a “Seinfeld” episode that subtly parodies the Kennedy assassination conspiracists, or a typical “Simpsons” episode, which may contain numerous allusions to politics or cinema or pop culture. The extraordinary amount of money now being made in the television aftermarket–DVD sales and syndication–means that the creators of television shows now have an incentive to make programming that can sustain two or three or four viewings. [...]

How can the greater cognitive demands that television makes on us now, he wonders, not matter?

Johnson develops the same argument about video games. [...] The contemporary video game involves a fully realized imaginary world, dense with detail and levels of complexity.

Indeed, video games are not games in the sense of those pastimes–like Monopoly or gin rummy or chess–which most of us grew up with. They don’t have a set of unambiguous rules that have to be learned and then followed during the course of play. This is why many of us find modern video games baffling: we’re not used to being in a situation where we have to figure out what to do. We think we only have to learn how to press the buttons faster. But these games withhold critical information from the player. Players have to explore and sort through hypotheses in order to make sense of the game’s environment, which is why a modern video game can take forty hours to complete. Far from being engines of instant gratification, as they are often described, video games are actually, Johnson writes, “all about delayed gratification–sometimes so long delayed that you wonder if the gratification is ever going to show.”

See a debate with the author over at Slate

MPAA targets TV download sites

Continuing its war on Internet file-swapping sites, the Motion Picture Association of America said Thursday that it has filed lawsuits against a half-dozen hubs for TV show trading.

The trade association said that piracy of TV programming is growing quickly online, and that shows are as important to protect as big-budget films. This is the first legal action from the group that has focused most heavily on TV content.

Slashdot: MPAA Targets TV Download Sites