Bakker, Gerben (2012) Adopting the rights-based model: music multinationals and local music industries since 1945. Economic History Working Papers, 170/12. Department of Economic History, London School of Economics and Political Science, London, UK.
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This paper identifies four economic tendencies that shaped the development of the international recorded music industry since 1945: the importance of endogenous sunk costs led to a quality race; the fact that marginal revenue equalled marginal profit led to extreme vertical integration; the quasi-public good character of musicits non-diminishability but partial excludabilityled to a sharply unequal income distribution among stars and the pioneering of new business models to transform consumer into producer surplus; and finally, the project-based character of music production led to decentralised agglomeration. What can be characterised as rights-based multinationals emerged as a response to these forces. They married extreme vertical integration and a portfolio of A&R labels having limited economies of scale and scope, with a global distribution and marketing machine. This paper tries to explain how they emerged and how they can explain increasing industrial concentration in the face of sharp growth of the market and of musical diversity.
|Item Type:||Monograph (Working Paper)|
|Additional Information:||© 2012 The Author|
|Library of Congress subject classification:||H Social Sciences > HC Economic History and Conditions
M Music and Books on Music > M Music
|Journal of Economic Literature Classification System:||L - Industrial Organization > L8 - Industry Studies: Services > L82 - Entertainment; Media (Performing Arts, Visual Arts, Broadcasting, Publishing, etc.)
N - Economic History > N0 - General > N00 - General
|Sets:||Departments > Accounting
Departments > Economic History
Collections > Economists Online
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