Right, and maybe wrong, on music
The fantastic Mr Cowen makes some comments on the decline of the music industry:
In the past most people didn't much like or listen to most of the music they bought, or in any case most of the value came from their very favorites. A relatively small percentage of our music purchases accounted for most of our listening pleasure. So if people can sample music in advance, and know in advance what they will like, music sales will plummet. This will be a sign of market efficiency, not market failure.
Admittedly copyright issues are being superimposed on this scenario at the same time, so the net assessment of current music trends is complex. But when there is uncertainty about consumer tastes, falling output can be a strong Pareto improvement. (It's just like how having lots of dates is not necessarily the sign of a happy love life.) Less music is being produced, but we're getting more of the stuff we want.
The first point clearly has a lot of truth in it, and also applies to an awful lot of packaged media (including newspapers). As we find it easier and easier to get hold of exactly what we want, and as it becomes available to us in individual, unpackaged form, we turn away from the packaged entities because, for us, they're economically inefficient: we have to buy a bunch of stuff we're not interested in in order to get what we want. But this destroys the economics of packaged media (including newspapers), since they relied on us subsidising the production of something we're not interested in in return for access to the stuff we do want (it's actually more complex than this, but this is an OK summary for now).
The second point - that less music is being produced is, I think, very wrong. My strong impression is that more music is being produced, of greater variety. Just like more words are being produced every day by bloggers and independent publishers. By giving people access to the tools of creation and distribution, we have unlocked a lot of new content. Whether there's more good stuff than before is a very interesting question, and one I'm not going to attempt on a Sunday morning.
