by DAVID NEWHOFF posted on JUNE 9, 2014
Yesterday’s New York Times offers a very well-articulated editorial by media writer David Carr on the larger economic cost of free media. Using an example of buying fresh fruit at a neighborhood stand, Carr questions his own instinct to undervalue the price of a bunch of grapes in context to the way in which so much access to “free stuff” has skewed his own perceived value of goods and services in general. In a market like ours, value is reflected as price and always traces back to labor, someone’s labor somewhere. So, I think Carr is right to ask whether or not the steady stream of free stuff in digital space corrupts our perception of value in other sectors of the economy, which can only have a cannibalizing effect on the value of our own labors whatever they may be.
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the perceived value of a song (and we’ll let song stand for all media) has unquestionably reduced prices (or rates) to unsustainable levels for supporting the production of music itself. So, the consequential question is whether or not we actually care. Quite simply, the perceived value of recorded music was first reduced to zero by piracy (which is neither economic nor technological progress), then it was briefly and only partly resuscitated by digital downloads, and then it was dropped back to effectively zero by streaming services. And one reason we know the perceived price is zero or near zero is that so many tech-utopians keep saying it is while they offer numbskull suggestions like more merchandise, more touring, and “adding value” to replace the inescapable loss of revenue from disappearing sales.
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champions of the “new models” are quick to say that producers of media will share smaller bits of a much bigger pie because the Internet makes the whole world a potential customer for no more than it costs to reach a local market. Sounds good except for the fact that ten million times almost zero is still…y’know. This argument always reminds me of the old joke about the guy selling cordwood for less than he buys it wholesale and figures the reason he’s losing money is that he needs a bigger truck.
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the initial and persistent, catalytic force of piracy normalized a black market, with which no legitimate industry in any sector can ever compete.
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Last week, songwriter/composer Van Dyke Parks wrote this editorial about the value of a song in the age of streaming, ... “Forty years ago, co-writing a song with Ringo Starr would have provided me a house and a pool. Now, estimating 100,000 plays on Spotify, we guessed we’d split about $80.”
http://www.thedailybeast.com/articles/2014/06/04/van-dyke-parks-on-how-songwriters-are-getting-screwed-in-the-digital-age.html#The myopic reaction to a quote is to think either that a song should not be worth a house and a pool or that Parks and Starr have enough money; but both reactions entirely miss the economic implications of Parks’s point. If technological change drops the trade value of a popular good from a house and a pool to, say, a really nice car, then we might be looking at a modified but still sustainable market. But if the trade value of a popular good drops from house and pool to less than a basket of groceries, sustainability has been eradicated, and I personally think anyone who views this as virtuous is the same kind of fool as the guy in the joke hauling cordwood.
When I got home, on closer study, I found out we were way too optimistic. Spotify (on par with other streamers) pays only .00065 cents per play. [That works out to $65 for 100,000 plays]
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We’re seeing a trend of popular artists take gigs to perform for sponsorships, corporate events, or private parties for wealthy individuals; and this move toward patronage by the elite is a direct response to the fact that we the people are no longer a source of revenue. This will probably have the unfortunate effect of turning executives at Walmart or Pfizer or Shell Oil into the new tastemakers, which just personally makes me miss even the sleaziest producer who ever worked for a record label.
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I find it interesting that as angry as we seem to be over ceding political power to corporate interests because they can buy influence, that we are unwittingly going to cede cultural power as well, simply by abdicating our ability to vote with our pocketbooks.
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