Tuesday, March 29, 2011

University of Minnesota publishes study on effect of P2P on music industry: the "Post Napster" world

The Carlson School and Department of Economics at the University of Minnesota has published a study by Joel Waldfogel on the relevance of P2P file sharing and weakened copyright protections in the release of new music and new artists.  The title is “Bye, Bye Miss American Pie: The Supply of New Recorded Music Since Napster”, link here. Electronic Frontier Foundation recommended this paper in a tweet recently. 

The author gives a comparison to the effect of radio on the market for records in the 1940s and 1950s, when record companies paid radio stations to promote their releases, a practice called payola that would be outlawed in 1960.  This all happened very much during my own coming of age.

The profitability of releasing new music may well be an issue for record companies today, as so many releases sell relatively few CD’s or MP3 downloads.  But the cost of creation and production is less because of technology, and innovative young composers report that they can work alone much more quickly than could artists in the past and produce work of professional quality.

Furthermore, P2P and other Internet mechanisms may help new artists distribute their work legitimately, without the need for an “establishment”, and I wonder if this is the real existential threat: low cost competition to an industry used to finite supply and huge compensation for stars.

The analysis may not carry over well to motion pictures, where industry considers piracy such a big threat, since movies inherently cost a lot more to make and distribute. Nevertheless, some influential films have been produced in recent years for very low budgets, and the old studio system (and festivals that support them) have faced serious competition.   Columbia professor Tim Wu has analyzed the trend for media and communications monopolies and hegemonies to reinvent themselves in his book “The Master Switch”, reviewed on my Books blog Jan. 30, 2011.

I got to know "The U" campus pretty well in my six years in Minneapolis from 1997-2003. 

Also, here's a link to a distantly related article by the American Music Center.

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