Neil Irwin recaps an “exceedingly rare” speech on music by White House chief economist Alan Krueger:
“The music industry is a microcosm of what is happening in the U.S. economy at large,” Krueger, chairman of the White House Council of Economic Advisers, says. “We are increasingly becoming a ‘winner-take-all economy,’ a phenomenon that the music industry has long experienced. Over recent decades, technological change, globalization and an erosion of the institutions and practices that support shared prosperity in the U.S. have put the middle class under increasing stress. The lucky and the talented – and it is often hard to tell the difference – have been doing better and better, while the vast majority has struggled to keep up.” …
A century ago, a musical performer could only reach as many people as his or her vocal range and travel schedule would allow. Now, high-quality recordings can be distributed to billions with the flip of a switch. The result: Everybody has access to the very best music, or at least the music that most precisely suits their tastes.
Which would be great if the music industry were a meritocracy. Unfortunately, it isn’t:
Luck plays a shockingly important role in which songs and artists become mega-successes, Krueger shows. He points to research by sociologists Matt Salganik and Duncan Watts. Participants in their study were able to log in to listen to songs and download those that they liked. The researchers played a little trick on them: Some of the participants saw an actual ranking of which songs had been downloaded the most previously. Others saw a random ranking. It turns out that just the appearance that something was popular drove more people to download the song. Rather than a pure meritocracy where the best songs rise to the top, music seems to have strange effects in which popularity breeds greater popularity.