Analysis: Are Musicians Losing the Incentive to Create? July 26, 2010
By Glenn Peoples
The last decade’s drop in music sales is correlated to a drop in the number of professional musicians in the U.S., according to some number crunching by the RIAA, possibly meaning that musicians are motivated by expected earnings from recorded music.
The trade group took issue with a recent study that concluded that file-sharing has not reduced artists’ incentive to create. In their latest paper, researchers Felix Oberholzer-Gee (Harvard Business School) and Koleman Strumpf (University of Kansas) concluded that an increase in new musical works has benefited society in the time that recorded music sales have fallen.
“Data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers,” they wrote. “Since the advent of file sharing, the production of music, books, and movies has increased sharply.”
The RIAA’s Joshua P. Friedlander and Jonathan Lamy took a very interesting look at how the value of recorded music shipments have changed in relation to the number of musical groups and artists in the U.S. As the below graph shows, over the last decade the drop in the number of Americans who identified as professional musicians (according to Bureau of Labor Statistics data) has closely followed the drop in recorded music shipments.
The RIAA concludes the correlation shows that “selling music is an important motivator to creating music, and that the decline in sales has correlated with fewer people making a living in music.” But does this mean professional musicians are seeking other professions in response to lower expected earnings from selling music? That’s one possibility, although correlation is not necessarily an indication of causation.
Another plausible reason for the correlation is fewer studio musicians due to fewer major label releases and lower recording budgets – both the result of lower record industry revenues.
Of course, not all people who release music can call music their primary occupation or primary source of income. Cheap digital tools and services have brought hobbyists to the marketplace. The Bureau of Labor Statistics would not capture this sizable segment of the population.
The basis for researchers' conclusion is flawed to begin with. As Friedlander and Lamy point out, SoundScan’s number for new releases in any given year represents new commercial titles, not necessarily new creative works.Each year there are many reissues, new compilations and new digital-only versions of old titles. “What Oberholzer (sic) and Strumpf found was better ability to track new album releases, not greater incentive to create them,” they wrote.
In my post on this latest Oberholzer-Gee and Strumpf paper, I similarly took issue with the fact that the researchers used annual new releases as a substitute for new creative works. In reality, the number of albums released in any given years is the product of many factors. One of the most obvious reasons for the recent increase in new releases is a temporary increase in releases due to the addition of foreign aggregators to U.S. retail catalogs. In other words, not all of the albums released in the U.S. are by U.S.-based artists. As there are fewer foreign catalogs to add over time, these titles' impact should be noticeable. That reversal may already be happening. There were 98,000 new releases in 2009, down from 105,000 in 2008.