Death of the Pop Music Industry and the decline of Popular Culture

The audience at the Sam Houston Racetrack during day three of the Willie Nelsen Picnic 2008 (July 5th).  this was the biggest crowd of the three shows we did and a significant proportion of the audience were in a much older demographic.

The audience at the Sam Houston Racetrack (Houston, TX) during day three of the Willie Nelsen Picnic 2008 (July 5th). This was the biggest crowd of the three shows I played with multi-Grammy Award winner, Ray Price.  A significant proportion of the audience was comprised of an older demographic than one would find at some Pop Concerts.

John Loken, a former record label marketing exec posted an intriguing blog last February (2011) titled “The Death of Pop Music?” where he talks about the decline of, well, Pop Music.  In particular, the industry “defined as the commercialization of short form songwriting, a historic aberration that lasted for the better part of the 20th century” is what he’s referring to here.  He gives a short run-down of that industry’s history that’s a counterpoint to the history of how the Cost Disease has shaped Pop Music that I outlined in a previous post.

The pop music era started with ragtime and the player piano roll, evolved with composers like Gilbert & Sullivan and George Gershwin, and flourished with the advent of broadcast radio which popularized recording artists during WWII. Pop music reached its creative zenith in the 60s through 80s (a completely subjective analysis, I’ll grant you), and hit its commercial peak in 2000 when the inflated returns from CDs masked the creative stagnation underneath. (Again, ‘stagnation’ may be too strong a term, but I think digital recording tools removed all barriers to entry, effectively diluting the market with mediocre artistry; a separate post, I suppose). Napster’s disintermediation and Apple’s unbundling of the album hastened the collapse of concentrated/controlled music distribution – the engine of economic rents for decades.

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How audiences can’t save the arts, or sports, or pop music, or…

George Cruikshank's "A London Audience" (1836) which may be a portrait during a lecture of Dr. Gall or Dr. Spurzheim

George Cruikshank’s “A London Audience” (1836) which may be a ‘portrait’ of an audience during a lecture by Dr. Gall or Dr. Spurzheim

Since the 60s live audiences haven’t really sustained much of anything.  The economic infrastructure that creates ‘sustainability’ for Classical Music, the Sports Industry, and the Pop Music Industry since the post WWII economic boom in the US has had much more to do with the growth of all three of these fields.

Foundations and donors make up the difference for ticket sales (i.e. audience contribution) for Classical Music; Broadcast Licensing makes up the lion’s share of the even more dismal proportion of gate revenue (i.e. audience contribution) for the Sports Industry; and the Recording Industry has done more for propping up pop Superstars than live touring (i.e. ticket paying audience contribution) has given the huge difference between total revenue earned by the former as opposed to the latter.

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The Pop Music Industry and the Cost Disease

U2 Cardiff

“[C]ost disease studies usually select opera, theater, and the symphony orchestra. Cost disease proponents display an unjustified bias towards ‘high culture.’ We also should consider today’s cultural winners, such as rock and roll, country music, and heavy metal.” (Cowen, 1996)

“In 1983 it took General Motors about 135 man hours to produce a car.  Twenty-five years later, that number had fallen to 32.29 hours per vehicle, marking fifteen consecutive years of improvement in productivity.  By contrast, it took the band Lynyrd Skynyrd 1.07 man hours to produce a performance of the song Freebird in 1977.  Today, a band duplicating the performance would still take 1.07 man hours.” (Schultz, 2009)

Lady Gaga performing “Speechless” on the UK arena of The Monster Ball Tour. This is what a $3 million dollar bankruptcy tour looks like.

Harvard trained economist, Tyler Cowen, takes exception to the cost disease especially as it applies in a biased manner towards ‘high culture.’  The quote above is from his piece, “Why I Do Not Believe in the Cost Disease: Comment on Baumol,” originally published the Journal of Cultural Economics (20: 207-214, 1996) and in my post, Arts revenue and the fallacy of the “savior demographic” (younger audiences), I took a look at how the Sports Industry which has an even smaller percentage of ticket revenue to total revenue than the classical music industry can actually be considered “profitable.”

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An alternative view of Orchestral Musician Compensation according to Flanagan

So we’re often told that orchestras run deficits.  Sure, ok–but how often do we hear that orchestras in countries with a higher level of subsidies actually run bigger performance deficits?  Here’s what Flanagan says:

Symphony orchestra bankruptcies, an unwelcome feature of the U.S. classical music scene, are essentially unheard of abroad, although foreign orchestras are no more likely to cover their expenses with earned income than U.S. orchestras.  In fact, most foreign orchestras report larger performance deficits. (Flanagan 2012, pg. 145)

And also this:

The evidence that U.S. orchestras generally report smaller performance deficits than orchestras in most foreign countries may surprise some readers.  At the least, it signals possible moral hazard in countries that subsidize the arts substantially. (Flanagan 2012, pg. 155)

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What if there’s really no “decline” in Classical Music audiences?

The BBC Proms

So a few weeks ago I was playing around with numbers, namely I was playing around with the numbers given by various surveys regarding arts participation as well as population.  Keep in mind that data are simply the raw numbers you work with while statistics (or statistical methods) is (are) the interpretation of the raw numbers.

The NEA (2009) released some figures from its Survery of Public Participation in the Arts for 2008 as well as the preceding 10 year intervals of the survey (which began in 1982).  Note that the sample is relatively large (18,000) so extrapolation from the sample size to the whole of the population isn’t especially problematic–at least in many ways but more on this later.  Given that, then for the four years with data we have:

  • 1982 – 13.0% = 21.3 million
  • 1992 – 12.5% = 23.2 million
  • 2002 – 11.6% = 23.8 million
  • 2008 – 9.3% = 20.9 million

where the percentage and following number is the adults attending at least one classical music concert during the previous year.

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