Music industry

Abstract

The past two decades have been challenging times in the music industry. Unauthorized copying of recorded music has been commonplace online. Revenues from many important ways of marketing recorded music have substantially decreased, whereas the variety of new works supplied and the quality of supply is greater than ever. This chapter discusses fundamental economic characteristics of recorded music, and surveys the essential functions in the production and commercialization of recorded music, as well as the various types of organizations that often conduct these steps of production in the contemporary music industry. Paradoxically, the interest of economists in the music industry has increased as the industry experienced a decline in financial terms. As this chapter documents, the central theme in the related literature is technological change in the course of digitization, which has many different aspects. In some respects, the literature has gone full circle. It went from visions of more competitive and efficient markets online to concerns about the market power of digital retailers, as well as hardship for creators and traditional parts of the industry, and now new hopes concerning crowdfunding and in particular blockchain technology. The music industry continues to pose important and engaging challenges to cultural economists.