Artonomics: Why Books and Music Prices Will Go Down
I have been thinking a bit about the music business lately and today came across a great post, The Economics of a $9.99 ebook, on a new blog that I’ve been following Aaron Chua’s Wild Illusions. In this post Aaron argues that a $9.99 price point for an ebook is just not sustainable and the publishers that embrace that reality will be the ones who benefit at the hands of those who hold on the old paradigm. I couldn’t agree more.
When certain types of art such as music and literature/books become digital, the cost to produce such a work rests mostly on the artist. In addition, the Internet has made it easier to discover new artists and for artists themselves to market their work. The result is that the economics of the publishing is dead and the economics of art takes over. To the dismay of the publisher, the economics of art is much different.
The one argument you keep hearing is, “If the artists don’t get paid, how do you expect them to produce the art?”. Art is something that is timeless and will be produced for the sake of art itself. The artist effectively bootstraps him/herself in order to produce it the same way a web publisher with an art for programming can cheaply and quickly make a website or application. Thus the supply of art is much larger than the demand will ever be. An artist just wants to be heard, not bought. Heck, some of the greatest artists that ever existed produced art in their lifetime that they unfortunately never got to “cash out” on. Art will always be mass produced by the masses who wish to express themselves artistically. People find art entertaining and are willing to pay a market price for that. When the production costs rest solely on the artist, the market should clear at a much lower price, and there is nothing to say that this price isn’t “free”.
Historically, publishers (and artists), through marketing and very narrow distribution channels, have received perceived economic rent on art, rent that no longer exists in this digital age. When you restrict the supply of art to key artists, you give the illusion that a particular artist should extract a much larger perceived economic rent on their artistic ability. Any real audiophile will tell you that this is not the case. Sure when it is difficult to find new artists, there is a premium that most people will pay not to have to do it, but these days I feel that we’re inundated with new art and artists that the perceived rent no longer exists.
For the artist, the reality of artonomics will be a double edged sword. For years, the lucky artists were paid outsized rewards for being lucky, for being “found”. Artonomics won’t pay nearly as large of a lucky premium, simply because there will be more lucky artists and competition will be greater and the demand for art/entertainment should stay relatively constant . On the other side of things, there will be greater opportunity for artists to be heard and for artists to get lucky, or found. In addition, more artists being found brings about the concept of “fame” and the ancillary benefits, industries, and opportunities that come with that reality.
So in summary, artonomics should dictate that any digital medium of art should decrease in price as the economics of the artist begins to take over the industry, and the internet should be the facilitator for the reserve army of the starving artist to execute the revolution.