August 11, 2006 Sean Burns
By Christine Paluf
There’s a reason to go to an Ivy League school. You have a better chance of taking cooler classes, like one with Princeton University’s Alan Krueger, touted as “the world’s first and foremost professor of rockonomics.”
A report compiled by the economics professor and graduate student Marie Connolly details this new area of economic focus. Rockonomics is the study of the concert industry and its economic influences and effects.
The concert industry has become more businesslike over the years, according to Krueger. Sales of recorded music fell from 1999 to 2002, and continue to decline. This is attributed to free music downloads and CD burning. Artists used to price their concerts lower, because bigger audiences translated to album sales, according to Krueger. Today, that link doesn’t exist, and the majority of performers’ income comes from touring.
This was predicted in 2002 by David Bowie, who said to his fellow performers, “Music itself is going to become like running water or electricity. You’d better be prepared for doing a lot of touring, because that’s really the only unique situation that’s going to be left.”
As performers realize that their music is as easy to get for free as anything else online, their creative juices will have to turn to the concert arena. Concerts these days are sometimes less about the music than they are the experience. If you’ve seen the lights and stage designs of any of the tours currently commanding high prices, such as Madonna or U2, you have an idea of what’s needed to keep the fans entertained.
Concert ticket prices have risen steadily since 1996, when they shot past other forms of entertainment and inflation. While inflation rose 2.3 percent per year, concert prices jumped 8.9 percent annually, the report said.
The Sunday Times of London reported recently that pop-concert ticket prices are now on par with other cultural highbrow events such as Beethoven concerts.
The industry is changing, not only the distribution of money from recorded music vs. concert ticket sales, but also the secondary market is gaining revenue as people begin to expect higher ticket prices to see their favorite shows.
New technologies are disrupting these established industries. The Internet has single-handedly influenced all sides of the musical genre, with file distribution and even the way people buy their tickets.
The way bands market themselves is changing, with newer groups distributing their music via the Internet, circumventing the record labels. And the record labels are feeling the sting of these changes, as well as the technological advances that are involved with file sharing.
LimeWire, the fastest growing file-sharing program, are the most recent victims of Napster syndrome. The company is under the gun of major recording industries, who are suing the company for copyright infringement. The Associated Press reported last week that the coalition of record labels owned by Sony BMG Music Entertainment, Universal Music Group, Warner Music Group and EMI Music are seeking at least $150,000 per instance when a copyrighted song was distributed without permission. They claim the firm encourages users to trade music without permission.
This is the first piracy lawsuit brought against a business such as this since the U.S. Supreme Court ruled last year that technology companies that encourage customers to steal music and movies over the Internet could be sued.
Many new issues such as these are popping up as the industry is forced to change with the times. Intellectual property is being defined and re-defined as it is examined from these new angles. Who owns what, and how they get paid is fast becoming a topic of serious study.