Source: http://wyliecenter.com
BLOG POST #2
The economic principle I’m exploring is “Institutions are the “rules of the game” that influence choices”
My research question to help me study the economic principle is “How are music producers and bands affected by apps like Spotify?”
The article/video/etc published in The New Economy titled “How does the music industry make money?” demonstrates this economic principle because it shows how people have come to expect to get music for free or little to nothing and when given the option people will always choose the cheapest option to get their music even if it is illegal.
First, musicians are now finding that working by performing live concerts is not as profitable due to their songs being played constantly on the radio. This means less money for the music industry every time their song is played on the radio because then people don't have to go out and buy their music in order to hear it.
Second, Spotify and other streaming services are working to shift people away from owning their own music and to instead rent it through the use of advertisements and subscriptions. If people rent their music instead of actually owning it then the music industry is able to bring in a more steady income and make more money over time.
Third, Streaming services have played a role in dramatically reducing the amount of music that gets pirated, but as a result consumers are restricted to what they can do with the content they are provided. When streaming services like Spotify provide free music, then there is not need for people to go out and obtain their music by other illegal means.
In my next blog post I will research: How Spotify makes money
This is a cool idea, it is interesting to think about how music producers are affected by streaming services such as Spotify. How do institutions such as Spotify influence the choices that music producers make?
ReplyDeleteI believe this is a very important topic, due to the shift away from music CDs and towards streaming apps. Even though it is easily accessible, there may be some drawbacks for the music artists themselves. I heard that artists get paid less through streaming apps.
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