December 4, 2009

Music, copyright and gymnatsics

I was sorting out some information for a longer, and somewhat more thoughtful, post when I found this: apparently The Society of Composers, Authors and Music Publishers of Canada wants all the local gymnastics clubs to pay royalties for the tunes they use for routines.

The news just shocks me since I've been in my university gymnastics club for several years. And although that sort of a thing would probably never happen in Russia, I just can imagine what sort of troubles it could bring.

Finding just the right piece for a floor routine is hard enough. It should be instrumental. It should have at least two slow parts and a fast part to meet both choreographic and and acrobatic demands. And it's just about 1-1.5 minutes long. Moreover, it's used only for floor routines done by girls.

Photo: "Candlestick" by Dmitriy Tugarinov at Moscow Museon park

The article also state that the clubs are non-profit organization. In my case, I never could understand how my club survives at all. We never had any submission fees. Competitions attendance was always free. The system itself seemed to run on pure enthusiasm.

It also makes me wonder if the high-profile unprofessional gymnasts or figure skaters (those who go to the Olympics) should also worry about copyright laws while choosing the music for the routines? Read more...

August 20, 2009

From music to economics with love

Googling for my favorite phrase "music economics" I landed to this web-page that is on the first page in the results, but I somehow overlooked it before.

It appears to be a blog, called "From ABBA to Zeppelin, Led: using music to teach economics" and it tries to do... well, exactly what it's supposed to do by the title. And it seems like the site have been up for ages now! So it's kind of me, but looking the opposite direction. And it's fun!

The synopsis:
This weblog offers a variety of song lyrics that instructors of economics may find useful in teaching economics. Each post includes a selection from the song's lyrics and a brief assignment for students. This site has been accepted for publication in the Journal of Economic Education.

August 11, 2009

Baumol's cost disease

This post should open a series of posts explaining "basic concepts" of economics of music as I understand them and often told in words that don't sound very "economics" but still seem understandable to me.
As you can read in Wikipedia, Baumol&Bowen cost disease in the performing arts (or simply Baumol's cost disease) is an effect first described by William J. Baumol and William G. Bowen in 1966 in their book "Performing Arts: The Economic Dilemma".
The idea is that as times go by and technological change happens in the world - the relative cost of producing performing arts rises, relative real wages in performing arts industry decline and the gap between performing arts and the rest of the economic world in terms of profits, costs and wages, widens. The original study analyzed unique data from 18th and 19th century account books for major British theaters and US major orchestras and compared it to then modern data to prove the point.
For the representative music consumer of today (either a "big-record-label-cd-buyer", "local-radio-station-listener", "mtv-viewer", or a "brave-downloader", "pirate", "conscious-consumer-going-to-all-the-indie-concerts" type) this concept might seem ancient history, since the industry seems to be build on CD sales and rapid changes of heroes. But I think now is exactly the time to look back on the economics of performance arts because, as TechDirt usually mentions, now is the time when concerts matter much more than anything else. Again.
So I'll try to make a short review of several papers about the Baumol's cost disease and say what I think of them here.

The original "cost disease"

One of the features of all performing arts is that labor is the main output of the industry. The most used examples of that say: it takes as much time for a string quartet to play a Mozart composition as it did in Mozart times; and it takes as much time to perform a Hamlet monologue as it did in Shakespeare times. While in any "usual" industry rapid technological change drops down marginal production costs, the production costs in performing arts are less driven by technology and decline much slower. Hence the "cost disease": relative cost of performing arts product rises.
The numbers showing that can be found in the original Baumol and Bown work, or in a wiki-linked chapter from "A handbook of cultural economics" by James Heilburn (pdf!).


There are many objections to this scenario! Most are summed up in a Tyler Cowen paper "Why I Do Not Believe in the Cost-Disease". The main idea behind the "no-to-the cost-disease" is that we underestimate the technological change in music industry, limiting it only to the performing part. And we also underestimate the "performing" nature of "usual" industries, forgetting that the technological change itself is sort of a product of "performing art" of science.

I'd like to add two comments on that. First is "anti-cost-disease": not only the introduction of multimedia resources is a technological change, the actual performance now reaches much more listeners in the audience than it did in the Mozart times. Now that we have all the sound-enforcing techniques the concerts can be performed at stadiums instead of small rooms. And the streaming capabilities bring even more people to a single performance. The second one though is "pro-cost-disease": as I already mentioned, now the multimedia part of the business often becomes a free good and only advertises the live performances. Even when CD is not free, you can clearly see by major musicians income statements that live performances generate a huge proportion of their income, so the economics of live performances is still very important.

Whether the cost disease effect holds for the pop part of music industry, where the CD sales still count (or whether it DID matter when CD sales were still important) is a subject of careful calculations. And if one wants to make it she\he has not only to get access to the relatively recent data on major record labels and major artists accounts (which is hardly possible now), but also think hard on how to separate all the effects of technological change in the data: bigger venues, CD's, radio, streaming services, file sharing, merchandise (why not? it's still the part of the industry!) etc.

How it may have shaped the pop music world

The non-econometric attempt to map the cost disease concept to the "real world" (and not to the classic performing arts which many observers think is dying, but it's not, but I think I should write about it later) is presented in a Larry DeBoer paper "Is Rock'n'Roll a Symptom of Baumol's Disease?". DeBoer suggests that even though the Baumol's cost effect didn't shape the style of the popular music it might have affected the size of an average band to get through to the stardom. He also notes that although record-labels could cross-subsidies the big bands, the genre was to die out because any good band needed (and still needs) a period of growth and polishing the skills by live performances, which became too costly. I find the quotes of music critics of the time the best support for this hypothesis and would like to double-quote one here:
The decline of the dance band and jazz medium is due largely to the fact that a big orchestra simply costs too much to operate. Most of the big bands in existence today are balancing on the edge of financial collapse - which is all right with me (Miller, 1947, p.40).

What's the equilibrium?

There are said to be two equilibria within this concept. The bad one: beloved live music costs us more and more until it dies out completely leaving the world numb and sad. The good one: while the live music still costs us more and more, everything else becomes almost free and we're able to spend all of our money and time for music; we also start making our own music, paintings etc. because we have too much free time, the world climbs to enormous heights of artistic productivity.

Both ways seem bizarre, but if you ask me I vote for the second scenario. Who could think 25 years ago, when I was born, that when I grow up I would have enough time to ramble about things that are not my work and even try to compose my own music in a free time?

My final comment: reverse causality

When I was still a student, my teachers would always tell me to think of "reversed causality". It was like a mantra. It means basically, that each time you think that one thing is driven by another you should stop and think again, why not the other way?

So here the pattern is: the shift in overall productivity in "non-art" industries makes "art" industries too costly, so the prices go up. My other version of the pattern is: while life overall becomes cheaper and easier, our demand for art grows and hence the prices for everything concerning "art" industries becomes more expensive, including costs for the "material" (for example venue rentals etc.). If I thought of research project on this topic, I'd certainly tried thinking "demand-side" first.

And I almost forgot: there's a world outside the music

The same concept may be seen in research papers concerning virtually any industry where labor is an output (or a large part of an output). So even though we talk here about music and arts in general, the right statement might be "while the goods-production side of economy goes cheaper, services-and-ideas side becomes more expensive. at the same time our demand for the scarce resource of human labor grows as we can get all the simple things for no labor at all".

The end. Please comment if you're still with me!

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July 14, 2009

Leaving the death of Michael Jackson alone (although not leaving alone this great MTV logo above!), lots of thing happened in the music industry since I’ve updated properly and thoughtfully. So I decided to sum up all of it in one post.

First, of course, this blog is now indexed by Google, horray!

Now to the serious news.

There were several big and small news on Pirate Bay. They’ve got some support from musicians and from simple voters, were called to court by Twitter, and finally were sold to the Swedish gaming company Global Gaming Factory X for 60 million Swedish kronor

The major streaming sites + music-social networks were also producing a somewhat constant float of news. was left by it’s founders Martin Stiksel, Felix Miller and Richard Jones. All the others got new royalty collection agreement

Virgin megastores finally closed. Independent stores kept fighting for their lives.

And a series of stupid fines: from Jammie Thomas-Rasset to music industry (American); Rapidshare to German record industry; and (ha!) Deep Purple to Deep Purple

London people promoted piano music, directly.

People who do science tryed to prove that twitterers buy more music.

At last, I want to link you to two of my favorite blogs. I know that the odds of you reading me and not reading them are hilariously small, but still if it happened you just have to check out Techdirt and Idolator!!

June 2, 2009

Organizational note

I haven't been updating lately. Not that it bothers anyone, but I still want to say I'm sorry and mention that I had loads of real-life work lately. I still have tones of plans of what to write about though. Topics include two book reviews and an easy explanation of Baumol-Bowen cost disease. Read more...

May 18, 2009

Danger Mouse and his blank CD-R release.

This news seems really amazing to me. DJ Danger Mouse is going to release a blank CD-R along with proper art work so anybody who buys it is free to find the album on the web and record it themselves.

While this news is presented as a part of a battle between Danger Mouse and EMI, I think it also represents a very important concept of modern music industry. It's not the music that we buy when we buy a CD. It's a material piece of fandom, a chance to support a favorite artist, a sign of devotion to a certain kind of music. So in this world it doesn't really matter if an artist sells a blank CD, or even some sort of artwork without any sign of music. Read more...

April 30, 2009

CD prices start to drop?

Fat Wreck Chords announced that they would sell their CD's for less than $10 from now on. And sometimes even under $8. Just about time!

I wonder what should happen in this big mad world for all record labels to finally drop their CD prices. If they (CD's) would be a commodity, those prices would have fallen several years ago.

I also wonder when somebody would start selling music on CF cards, or in FLAC, or in any other innovative way... It's weird that almost nobody tries to break that conventional structure of CD-mp3-world with the sales dropping so bad. Read more...

April 29, 2009

To leak or not to leak?

Some friends noted to me that the new Florence and the Machine EP didn't leak, yet, and it's been more than one day since the release. At the same time, say... new IAMX album leaked several weeks ago, with an official release date being May 19th.

Florence and the Machine

The question is: where is the key difference between those who leak and those who don't. With all my respect and some bits of love to IAMX, I don't think that people (fans) are more interested in "Kingdom of Welcome Addiction" than in a first officially released EP from a widely-hyped-about band.

Remains a mystery to me if I still try to think of leaks as something "natural" and something forced by artists or their PR's. My answer to the question above would anyway be "to leak as hard as you can!".

April 27, 2009

"Casual pirates" vs. "hard-core pirates"

While I was making up my mind on writing this post, the news on BI Norwegian School of Management research on piracy and legal music purchases spread around the net so far, it’s even all over Cyrillic web. But I didn’t just waste that time. I google-scholared the subject, and found a) one relatively old article from two researchers of that school and b) the only paper that sites that paper from (a). The (b) is a doctoral thesis, it’s a very interesting (and long) reading and it’s available in pdf!

The idea of “piracy” in general being positively correlated with “willingness to pay” for the music seems ambiguous to me since the “pirates” are very different. There are people who’d download the latest Beyonce single, there are people who’d download “the best of… anybody”, and people who’d download “the full discography of… their favorite-one-and-only”, and finally there are people who’d download “almost everything available, just for the sake of new music”. These people are very different in their “piracy” patterns and in their willingness to pay. Hence, in an ideal world where their download behavior is perfectly observable and legal, they can be clasterized and price-discriminated.

For the sake of simplicity, I’ll try to explain what I mean with only two types of “pirates”. I’ll call those who download the last a-la-mode single “casual pirates”, and those who download virtually everything they can reach and grab the “hard-core pirates”. And I know what I’m talking about since I know both types, and I used to be a “hard-core” myself in the wild days of Audiogalaxy. 

The “hard-core” pirates are spending much more time listening to the music and looking for something they like. They are investing their time into research of the product and it means that when they come to a store they are ready to invest some money in what they know they like. This is good for the music-publisher, resellers and generally anyone on the other side of the counter, because those people can be charged more. And this is good for side-business development because these people are willing to pay for any tools that would help them do the research (I’ve just bought a book on history of Soul for thrice the price of the casual book and I’m happy about it because it gives me a good new mapping of my now-favorite style, yet my mom is shocked). 

The “casual” pirates actually don’t care for the music at all; they care for, so to say, the social value of music. They are good for the industry if they don’t download, since they are persuadable and would buy everything new and glittery. 

Hence when those two types of pirates are combined, we can get the “more downloads – more legal buys” effect. My idea is that they should be treated differently. While for the “hard-core” pirates this can be true (the more dirt we search, the more gold we find and we’re ready to buy that gold), for the “casual” pirates that shouldn’t hold. 

Two notes:
I don’t think that “casual” people are wrong or not good for music in general. The industry exists because of the “casual” people. 

The industry seems to see the differences between at least two types. More and more independent labels and musicians without labels would offer free “testing” material for those who want to do the research. While the mainstream singles are easier to download legally from iTunes than to look for illegally on the web.

April 23, 2009

Today. Legally free goodies.

Two free and very interesting things online. If you follow the news on music festivals and\or e-books you might already know it. But if you don't, here are the links and comments for you.

The Londonist blog posted some free mp3's of Camden Crawl'09 participating bands and musicians today. I'm not sure what's inside those two archives (200+150 mb). But if you're planning on being somewhere near London this Friday and Saturday, this is an interesting thing to see, I'm sure, although they say only tickets for both days are available now. Don't forget to check out the Line Up.

Also, on e-book front, the original manuscript of Madame Bovary has been scaned and transformed into readable digital text. Now you can see the original pages along with the two versions of text (as I understand it one is "usual", i.e. the one that is published now, and another one is a digitalized version of the manuscript with some of the words crossed out etc.). It's really exiting to see all those old pages, and most likely none of us would be permited to see them without the scanning.

Next on my list: I would try and put up some thoughts I have on the news about "pirates" buying more legal music than "non-pirates" (found here or here) in a few hours.