Rock and Roll, Economics and Rebuilding the Middle Class

By Simone Pathe

Alan Krueger, outgoing chair of President Barack Obama's Council of Economic Advisers"

[blockquote]The music industry is a microcosm of what is happening in the U.S. economy at large. 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.

These same forces are affecting the music industry. Indeed, the music industry is an extreme example of a "superstar economy," in which a small number of artists take home the lion's share of income.

The music industry has undergone a profound shift over the last 30 years. The price of the average concert ticket increased by nearly 400 percent from 1981 to 2012, much faster than the 150 percent rise in overall consumer price inflation.

And prices for the best seats for the best performers have increased even faster.

At the same time, the share of concert revenue taken home by the top 1 percent of performers has more than doubled, rising from 26 percent in 1982 to 56 percent in 2003.

The top 5 percent take home almost 90 percent of all concert revenues.

This is an extreme version of what has happened to the U.S. income distribution as a whole. The top 1 percent of families doubled their share of income from 1979 to 2011.[/blockquote]

Excerpt from:

http://www.pbs.org/newshour/businessdesk/2013/07/rock-and-roll-economics-and-rebuilding-the-middle-class.html