Economics, Consumer Psychology, and Music
Given the current state of the music industry, there are a lot of people in all aspects of the business who want to learn as much as they can about how to remain successful in a rapidly changing business environment. In addition, even musicians themselves are embracing the notion that their music is a business that they need to understand and take control of.
When one takes a close look at the fields of economics and consumer psychology, it becomes clear that nerdy social scientists have plenty to say that is relevant to the music industry. It's entirely possible for musicians and music industry professionals to make the structure of the industry and the features of consumer psychology work for them rather than against them, but in order to do so they need to learn a little bit about how both economists and consumers think.
(for an overview on consumer psychology and music, see http://www.thembj.org/2012/05/starbucks-or-pennies-a-musicians-dilemma-2/)
Additional Supporting Materials
- What are the effects of various pricing strategies (free, subscription, pay what you want, tiered pricing, bundling, etc.) on consumers' purchasing behavior and perception of value both in the short run and in the long run?
- What effects do context and expectations have on consumers' valuations of music and related goods? How can context be designed to encourage and support upcoming artists?
- What impact does the proliferation of available choices have on music consumers? What steps can the industry take to keep this level of choice manageable for consumers?
- How can musicians and other industry professionals take the features of the music industry that are currently working against them (economies of scale, multiple revenue streams, secondary markets, file sharing, superstar effects, etc.) and use them to their advantage?
- How could contracts between artists and labels, managers, etc. be rewritten to create better incentives and increase efficiency for everyone involved?
- Jodi Beggs, Economist, Northeastern University
Jodi Beggs, Economist, Northeastern University
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