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.