RS 7: The Economics of the Music Industry

RS 7: The Economics of the Music Industry

            Music is an industry that many of us take for granted.  We go to YouTube click on a song and listen to it for free, and then most likely download it illegally, also for free.  As a society we are endangering the music industry.  It takes a lot of money to come up with one album.  Whether it is promotion, painting, or radio costs, it costs millions of dollars for radio producers to put out one song.  With the Internet being so readily accessible, the process of buying CDs or buying songs off of iTunes has diminished, ruining the record industry. 

            Music is a global industry, everyone all around the world listens to music.  Just like cars, toothpaste, or pieces of art, music is a manufactured product.  Today, America leads the world in producing pop music.  However, the Korean’s are rapidly approaching becoming just as successful as the Americans.  It took American culture 100 years to fully develop the product of pop music, and in that time it only took the Koreans 20 years.  The theory behind this is that the Koreans are picking up on what the Americans do and making it better by seeing what they did wrong.  The Koreans learned three big factors from the American culture of music.  The first is that music can be manufactured.  The first American pop song was “Oh Suzanna” by Stephen Foster, which was released in 1847, 150 years ago.  The first Korean pop song came out in 1992, only 20 years ago.  The second lesson leaned was that music can be distributed.  The jukebox era is what saved American music.  People paid to listen to the songs that they wanted to hear, and there was no limit as to how many times they could listen to it.  This was a way to keep track of what was in demand and most listened too.  The Koreans learned distribution through image.  When releasing a song, Koreans would hear the new song on television rather than a radio. The final lesson was that music had to be packaged and sold to the consumers.  Americans did this by using compact discs, better known as CDs.  CDs were small and light weight, and could be sent anywhere around the world.  This also provided for the global industry to expand.  The Koreans picked up on this by producing videos to go along with the music.  When a song came out, you would watch the corresponding music video.  This too also helped expand the market because anyone in the world could watch these videos being that they were provided on the Internet. 

Jukebox Era

            Music is more than just something that we listen too.  It is a product.  Lots of costs go into making a song, putting an album on a CD, packaging the CD, marketing the music, and getting it out to radios.  Selling music takes intelligence, especially in times where it is so easy just to download the music at no cost off.  When iTunes was first created, it cost only 99 cents to purchase a song.  Today the prices can range from 99 cents to $1.29.  Even the prices of CDs have slightly increased.  This could be a result of the diminishing music industry because people purchase music illegally.  I do not think that people understand how much money goes into producing music.  I know I didn’t until I listened to the Katy Perry podcast.  This is definitely going to make me think twice before I download some music for free, but at the price of $1.29 per song I do not think I would be willing to pay that much for music.  I think that something needs to be done in order to change the way music is sold to people so it would benefit the buyer just as much as it would benefit the company selling the product.

R6 Planet Money Podcast: An Economist Gets Stoned

R6 Planet Money Podcast: An Economist Gets Stoned

            This podcast presented information that would appeal to several college students or those who like to “fly high”.  The podcast was about legalizing marijuana and whether or not it would actually boost the economy.  By legalizing marijuana, it is said that the prices will go down incredibly.  They mentioned that if it were originally a thousand dollars per ounce it could go all the way down to a dollar per ounce.  A doctor from Harvard University compares the price of marijuana to the prices of other legalized products.  As an example he compares it to a chocolate bar.  He says the supplies that go into a chocolate bar are not expensive but the other expenses such as taxes, transportation, insurance, packaging, advertising, and other expenses all drive up the costs of the chocolate bar.  The same goes for the marijuana.  People have raised the price of the marijuana because of all of the costs it takes to smuggle it into the country.  He says that if it were legal those prices would not exist and therefore they would be lowered. 

            Another thing mentioned in this podcast was how legalizing marijuana would boost the suffering economy.  They mentioned the Alcohol Probation that occurred in the United Stated from 1920 to the early 1930s.  While it was banned, people went to speakeasy bars to illegally purchase and consume alcohol.  Even though money was still being made, there was no tax on the alcohol so the government was making no money on it.  However once they ended the probation, the government placed a tax on alcohol and ended up making money off of it.  Although the process would be similar by legalizing marijuana, I think there would be some differences.  The podcast even said that the main time people smoke marijuana is in their teenage years when they are experimenting with risky behavior.  Therefore the main consumers would be teenagers who purchase it, except for the few outliers.  Although these consumers may purchase more marijuana, the lower prices will not affect the people who have no interest in getting high.  Whereas for alcohol, once you are twenty-one you can legally purchase alcohol from any age on.  The age group of alcohol consumers is much larger than that of marijuana consumers.  Although I do think that legalizing marijuana would have some impact on the US economy, I do not think it is as large as some people would expect it to be.

            Legalizing marijuana is a very debatable topic.  Many people against it say that it will lower the price and increase the amount of people that smoke it.  Those for it would say that it will lower the price, more people will use it, and it will help the economy.  Although it has been seen in the past how legalizing an illegal substance has benefited the economy through the Alcohol Probation in the 1920s, I feel the effects on legalizing marijuana would not be the same.  By lowering prices, more people will purchase marijuana, however it may not attract more people to start using marijuana.  The only way that legalizing marijuana would benefit the economy to the level that we need it too would be by attracting new users to purchase the marijuana at the lower prices with the taxes.  In my opinion the best thing to do would be to leave marijuana only legal for medical purposes and find a different way to boost our economy.

Because I Got High

RS5: School Kills Creativity

School Kills Creativity

Sir Ken Robinson is a well-known leader in the development of education.  His belief is that education is interfering with creativity of young children.  He believes that from a young age, education teaches kids that they cannot go anywhere in life by doing something that they love to do.  For example, a child who likes music is told that they cannot become a musician.  Robinson talks about the hierarchy of education, explaining that the most useful subjects for jobs are on top where the least important are on the bottom.  The hierarchy places mathematics and English on top, followed by humanities, and then the arts.  The arts are then broken up into art and music, and dance and drama.  Robinson believes that dance is just as important as math because it allows for thinking in a different way.  Overall he believes that the idea and purpose of education needs to change and become more centered on the talents of the students rather than just excelling in certain subjects. 

After watching this video, I agree with Robinson in that education does interfere with the creative minds of children.  Ever since I was young I was taught that to have more money makes you better and smarter.  This meant that you had to do really well in school and get a high paying job in order to be considered successful.  I was never taught that being a low paying artist, or doing what you really love was successful.  I remember my second grade teacher went around the class one day asking each student what they wanted to be in the future.  When it was my turn to answer, I told her that I wanted to be a fashion designer in New York City.  Her immediate answer was that it was not a successful job because you need to know someone in the industry or be famous in order to succeed.  She told me I was better off being a doctor or a lawyer.  From that moment on I told myself that I was going to be a lawyer just so I could be “successful”.  Once I got to the age where I knew that I should do something I wanted to do, I changed my mind and said that I was going to go into fashion but the business end of it because it was a little more stable and gave me the ability to be in the industry I love.

The first thing that came to mind when I was listening to this video was Steve Jobs.  I know it is a little far fetched, but it made me think of the Apple mastermind.  Steve Jobs did not continue his education past his first six months of his first year at college.  However, he still managed to become the genius behind an extremely successful and popular computer company.  This made me think that maybe if he furthered his education whether he would have been able to create Apple, or would have been turned away from the idea.  It is situations like these that prove education does not necessarily make you successful but rather your intuition and creation that can take you wherever you want to go.

Sir Ken Robinson is a firm believer in the idea that education is tarnishing the creative minds of our youth.  He believes that it is imperative that we change education to focus more on the arts, so the purpose of education is centered on educating the whole person, not just a part of it.  Robinson tells the story of his young son who starred in a Nativity Scene play at the age of four.  One of the Sheppard’s messes up saying, “Frank sent this”, rather than, “I bring frankincense”.  Robinson says that it is amazing how as a child we are not afraid to make errors, but as adults we become more afraid.  Robinson says, “If you’re not prepared to be wrong, you’ll never come up with anything original.”  Maybe if I take the risk of going into the fashion industry I will be unsuccessful, but I won’t know until I try.  Or if Steve Jobs did not drop out of college, maybe we would not be using the Apple products we all know and love today.  It is taking chances and being creative that makes living life worthwhile.