The Economics of the Popular Music Industry : Modelling From Microeconomic Theory and Industrial Organization

This book uses economic theory to explain how consumers and producers have responded to major changes in the music industry. Byun examines the important role of technology in changing its structure, particularly as new methods of creating and accessing music prove to be a double-edged sword for creators and producers. This second edition includes new information about concert attendance and live performance in the COVID era and what followed, as well as the resultant economic impacts on the industry. Throughout the book, Byun questions how the business of music affects creativity and the extent to which this impacts the creative output of the individual artist. Chapters also address copyright enforcement and online piracy. This is an approachable resource for economists interested in the music industry as well as business and music majors studying the ways in which technology can impact a creative process. Contents List of Figures List of Tables 1 Introduction: A Short Overview of Music Consumption and Production References 2 Consuming Music 2.1 The Supply and Demand Model 2.2 The Utility Function, Budget Constraints, and Indifference Curves 2.3 Experiential Goods and Consumer Optimization 2.4 Consuming Music: Perfect Substitutes 2.5 Intellectual Property Rights and Music Piracy 2.6 Music Streaming: The Newest Mode in Consumption and Production 2.7 Streaming and Music Piracy as Substitutes 2.8 Consuming Music: Perfect Complements 2.9 Perfect Complements and the Bowie Theory of Concert Touring Perfect Complements and Bundling Collectors and a Vinyl Resurgence? References 3 Producing Music 3.1 Cost Functions 3.2 The Firm’s Supply Curve: The Shutdown Rule 3.3 Perfect Competition vs. Oligopoly: The Demand Curve and Marginal Revenue Curve 3.4 The Profit Maximizing Decision Rule 3.5 The Oligopoly Market Structure: Barriers to Entry 3.6 Ownership of Intellectual Property Rights and Music Licensing 3.7 Games of Strategy: The Prisoner’s Dilemma and ASCAP vs. BMI 3.8 The Cournot Model and Oligopolies 3.9 Recording Contracts and the New 360 Deals 3.10 Barriers to Entry: The Ownership of Intellectual Property 3.11 Barriers to Entry: Startup Costs and the Cost of Investing in New Talent 3.12 Barriers to Entry: Economies of Scale 3.13 Streaming as the New Production Model 3.14 Market Power and Collusion 3.15 Technology Erodes Market Power 3.16 The New Business Models References 4 The Music Industry Disrupted: The COVID Era 4.1 Adapting to the Economic Shock of the Pandemic 4.2 Property Rights Revisited: Selling Master Recordings and Publishing Rights References 5 The Global Marketplace for Music 5.1 Music Market Trends Worldwide 5.2 The Global K-Pop Phenomena References 6 Conclusion References References Index