After recorded music loses its value

Posted in digital, media, music, technology by thenextwavefutures on 15 May, 2009

The question of what happens when recorded music becomes more or less valueless is a subject I have mentioned a couple of times before (Tony Wilson and others here, Bill Drummond here) . This is a short post to note that Brian Eno has offered some views on this in a recent edition of Prospect. The answers: live music becomes more valuable, as do the non-digital parts of the recorded music package. A couple of brief extracts below the fold.

Live music is becoming more popular – both in clubs and at festivals:

Unable to make a living from record sales, more and more bands are playing live. That experience can’t be put onto a memory card—and people are willing to pay for it, and to pay quite a lot. Concert attendances are at an all-time high: recordings are increasingly ads for live shows, and live shows have become once again the real thing, the unduplicable.

At the same time, the recorded artefact seems to be changing (if more slowly I’d say) to reconstruct the value that lies inside, at least for those who wish to collect:

The pressure is on to develop content that isn’t easily copyable—so now everything other than the recorded music is becoming the valuable part of what artists sell. Of course they’ll still want to sell their music, but now they’ll embed that relatively valueless product within a matrix of hard-to-copy (and therefore valuable) artwork….That suggests to me the possibility of a refreshingly democratic art market: a new way for visual artists, designers, animators and film-makers to make a living.

I think we know what happens when the cost of duplication of digital artefacts falls to zero, and the cost of distribution is too small to measure, and has few economies of scale. The answer isn’t that lawyers working for the companies which used to make money from that product get rich for a short while, although this happens to be true. The answer is that instead of being a medium of economic exchange, they become a form of social exchange – they move from the realm of the commercial to the realm of The Gift. The main economic value attaches instead around the social exchange represented by the digital artefact rather than the artefact itself.

Musicians have learnt this more quickly than record companies (but this is unsurprising), and the music business seems well on its way to reconfiguring itself. [Update 19 May 09: Indeed this was one of the stories which emerged from presentations at the Great Escape Convention in Brighton last weekend: Brian Message, the chair of the Music Managers’ Forum, told delegates that the declining power of labels and radio, and increased access to fans via the internet, was proving to be a source of innovation.

All over the world, a quiet revolution is taking place. Young artists – technology- and net-savvy – are doing it for themselves because they have little choice; the investment isn’t there like it used to be.”]

But perhaps the more interesting question at the moment  is whether there are lessons from the music business for news and journalism (it’s worth looking at Frank Rich’s recent New York Times article on this): what is the social exchange here, and how might economic value attach to it?

Pointer via The Edge.

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2 Responses

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  1. Nick Wray said, on 25 May, 2009 at 9:27 pm

    I agree with the thrust of this piece, in terms of the move to revenue generation being seen as merchandise and live gigs. However, mp3 (and CD) sales are by no means trivial. At an anecdotal level, HMV stores in the UK would be closed if there were no physical sales, and if this source is accurate iTunes alone made nearly $600m in profit in 2008. If that represents a “valueless” commodity, it is one I’d be happy to trade in!

  2. thenextwavefutures said, on 21 June, 2009 at 10:56 pm

    Nick makes good points here; there’s an argument which says we think that hard format sales are lower than they are because the music industry talks them down to support their positions on copyright law. I don’t have the link to hand, but as far as I recall British hard format sales actually went up last year, at least by turnover.

    But there are longer term reasons to think the hard format market is in decline. The first is that profit margins are falling (look at the average cover price); the amount of retail floor space given over to CDs has shrunk dramatically (fewer record shops, each giving a greater share of floor space to non-music products – games, DVDs); and the ageing of the customer base (‘dadrock’, the ’50-quid bloke’, and all of that). Businesses with ageing customer bases die slowly – look at the Daily Express – but they do die.


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