Prices in the Music Industry

Prices within the music industry can be seen with the sales of music created by artist. There was a period in time when sales in music were on a constant incline and artists as well as record labels were making more money than ever. Recently though, there has been a decline in sales and how much revenue is being brought in. In order to determine the reason for this, we have to look at the changes in the music industry that have occurred in the last 15 years.

1999 was the highest point in sales for the music industry in which they sold an estimate of 40 billion dollars. Since then that amount in sales has decreased. Major changes in the industry have occurred; transferring from selling physical copies of albums to people being able to purchase digital downloads of singles. With the sale of physical albums, people would by a combination of all songs created by the artists rather than just being able to buy the few songs that an individual wants. Because people can purchase just these few songs, the artist and industry is losing money from sales of people not having to buy full-length albums. A solution to this could be to lower prices for albums so that people would be more encouraged to buy the album, otherwise sales will continue on in the same way.

With an increase in technology, there are more options than just buying music directly from artists through media such as iTunes is used, rather people have options such as YouTube, Pandora, and Spotify which allow people to enjoy music from an artist without having to pay. People don’t have to own a song to listen to it anymore, but can use these websites. These sites are able to do this through legal agreements with the artists and label and money is made through advertisements on the sites as well as providing additional benefits to people that purchase a better model of free version. This brings in money that would not be made otherwise.

I believe that music will always be created and then purchased no matter what happens to the economy. While the music industry is not completely inelastic but rather is affected by changes within the economy and technology and so forth, it will still be purchased even if it is on a smaller scale than it was. This presents a new problem to artists though, not being able to make enough money. Album sales should not be looked on with as much importance today as 10 years ago, rather bands need to be looking towards selling their performance. Money is made through what truly makes an artist distinct; how they can present this music they have created on stage. Concert sales are what provide artists with enough money to survive, including independent artist not even signed to a record label. People can make a middle class living off of touring with their original music. Albums will still be bought, but they have become a means of advertisement for an artists’ concert for many people. So while prices may be in decline for the purchase of music directly, I believe that no matter what artists will still be making money as always mainly through their concerts and merchandise that can be bought by fans directly.

Free Enterprise and Government Control/Regulation in the Music Industry

     The government has a large influence one what occurs within the music industry. With musicians and record companies, there are many contracts and legal agreements which all find their way back to the government. Many record labels can sign new, upcoming artists and take advantage of them. Artist are forced to create music based on regulations set by the label that they are signed by. Record labels get their authority from the legal contracts made between them and the artist which is then held up by the government. The government is able to create a lawsuit against artists if they are not holding up their end of the contract with a label. Many record labels will choose to take advantage of inexperienced artists and force them to abide by the companies' rules. The label will choose all of the music that an artist will make and can be corrupt with how much an artist is actually paid from the sales made by the music.
     Furthermore, the government can create laws concerning the censorship of music. Whether it be on the radio, in live performances, or on recorded albums, the government can dictate what content must be censored. Censorship can be created based on content or language that is consider explicit or offensive. Artists are not at liberty to publicly display their true art anywhere they choose while under the control of the government. This can be positive or negative depending on whether the government is using this authority to benefit society or to take advantage of it. The government also has authority to provide benefits to artists such as copyright laws defending artists against piracy of their original music. With so many new advantages in technology and the internet, stolen music has majorly increased in the past decade.The government can be seen as a threat to artist to take away their rights and bring overbearing lawsuits against them, but it can also insure their security and protect certain rights. Artists want to be protected from the threat of stolen music and many will run to a label and the government in order to create laws and provide them with the security needed.
     Free enterprise can be seen in the music industry with artists becoming increasingly separated from major record labels and becoming independent artists. Bands will create their music and produce all aspects of it and then distribute it and create tours based on income from sales. All of this is done without the help of a record label and bands and artist taking this route are directly interacting with their fans to make a living. Artist will create and provide new music for fans, and with the sales of albums and purchases of tickets, the free enterprise system of the music industry continues to increase. Many new artists are unsure about the future and cannot predict whether they will be successful or not, but sometimes separating from labels and governmental control can be beneficial in the aspect of being at liberty to create the music that you want to create.

Introduction Economics Blog

My name is James Patrick Austin. I am a missionary kid living in Peru for the last 7 years. During the time I have spent living here, I have encountered a growing interest that I have for music as well as surfing. While I believe that both can go hand in hand in many situations, my love for music has always been present and will continually grow as I proceed with my life after high school. I will be studying audio production within the music industry as a major at Middle Tennessee State University. I have found a way to pursue my passion for music and because of that I choose to study the field of economics within the music industry for this blog project. I will research the management aspects as well as how economics plays out with the role of artists and their record labels.