Musicians: just go home and die!

A while back I discussed an interesting speech that examined the economics of the modern rock business. The crux of the speech was that, for various reasons, the bulk of profit made from selling music was going to fewer and fewer performers.

Today I find an interesting new report that mirrors this. It describes the current music business as a “superstar economy.” Lady Gaga and Kanye West reap gazillions while superior artists such as myself eat cat food. The article notes that the advent of this superstar economy is actually at odds with what seemed to be the promise of digitized music. If digital technology makes it cheaper to record and distribute music, the argument went, we should see profits spread to a wide spectrum of musicians who are no longer blocked from the public (as they were in the days when a big upfront investment was need to get an album out there.) But…

In fact digital music services have actually intensified the Superstar concentration, not lessened it (see figure). The top 1% account for 75% of CD revenues but 79% of subscription revenue. This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services – especially on mobile devices – and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.

That second point is interesting. Basically, human beings can only keep track of so many music choices, so most of us just go for what everyone else is going for. “I don’t want to shift through millions of song files so I’ll just listen to this Beyonce record everyone is talking about.” The promise of a democratic marketplace ran up against the limitations of the human mind.

This is, of course, at odd with a mantra that was popular in the 1990s—that more choice was better for consumers. At a certain point buyers say, “enough choice – just pick something!”

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