'Rockonomics'
Alan Krueger, Currency, 336 pages, $28. What can music tickets tell you about supply and demand, and the working of secondary markets? How do operas in early 19th-century Italy provide a natural experiment in the impact of copyright law on creativity? These are the sorts of questions that the late Alan Krueger, a chairman of the Council of Economic Advisers under Barack Obama, answers in "Rockonomics," which, as its title hints, sets out to emulate "Freakonomics." The economics of the music industry matter for several reasons, Krueger argues. For a start, they illuminate how the business works, which is widely misunderstood, despite the role of music in many people's lives. They also provide an early and informative example of an industry coping with digital disruption. Krueger's love of music shines through as he analyzes the industry's finances and its increasingly "winner takes all" nature. Today, the top 5% of performers claim 85% of concert revenue, for example. He looks at how recording and touring revenue has changed, the business model of streaming, how contracts work and whether political activism makes business sense for artists. He analyses why tickets are usually underpriced — and how Taylor Swift, Jay-Z and others have pioneered "slow ticketing," whereby tickets are released gradually, so shows do not sell out straight away. He also provides much wonkish detail on radio royalties and the evolution of copyright law. For anyone thinking of entering the music industry, or working in it already, "Rockonomics" is an eye-opening and entertaining read.
ECONOMIST
