{"id":1715,"date":"2014-12-01T17:07:41","date_gmt":"2014-12-02T01:07:41","guid":{"rendered":"http:\/\/www.artsjournal.com\/worth\/?p=1715"},"modified":"2014-12-01T17:07:41","modified_gmt":"2014-12-02T01:07:41","slug":"are-bands-on-tour-winner-take-all","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/worth\/2014\/12\/are-bands-on-tour-winner-take-all\/","title":{"rendered":"Are bands on tour winner-take-all?"},"content":{"rendered":"

\"not<\/a>Well, Pomplamoose might not have made any money on tour, but band member Jack Conte’s accounting of revenues and costs<\/a> has sure generated a lot of discussion, and hopefully more people who know about the band. My last post<\/a> was about the fact that it has always been a tough way to make a living, but here I want to address an issue that has surfaced: is the fate of Pomplamoose, doing everything right (maybe) and still not generating net earnings a microcosm of the middle-class in America, increased inequality, and a winner-take-all economy?<\/p>\n

At New York<\/em> magazine, Annie Lowrey<\/a> directs us to remarks made in 2013 by economist Alan Krueger<\/a>, at the time the Chairman of the President’s Council of Economic Advisors. I have had my students read Krueger’s economic analysis of rock music (and he is a renowned economist in many fields, not just this one), and it is safe to say he is universally admired in the profession. He notes that the share of tour earnings taken by the top 1% of artists has been rising (as has the share taken by the top 2-5%), while the rest of the pack takes an ever smaller share. I don’t question the data – I’m wondering why<\/em> this would occur.<\/p>\n

Is it the superstar effect, where the majority of consumers all choose the same artists to buy, even if others can be enjoyed at a lower price? A dollar or two discount on a boring book or record does not turn us from paying full price for authors and musicians we know we enjoy. And since books and records and all sorts of broadcast or digital distribution is cheap and widely available, the more popular authors, musicians, and professional sports take the lion’s share of the revenues. Well, I can see it for those examples, but I’m not sure it translates into live performance. A million people can purchase the album 1989<\/em> in one week, but a million people can’t all go hear Ms Taylor in live performance in the same week – concert venues have finite capacity. I can buy any albums or books I want, from bands and authors from around the world, but here in Bloomington I can’t see live<\/em> anyone I want, and so I take in the best that happens to come through town, even if they are not on my bucket list.<\/p>\n

Krueger cites economist Alfred Marshall, who wrote, back at the end of the nineteenth century, about what sectors might generate what we now call superstars. Marshall included titans of industry, but not<\/em> singers:<\/p>\n

The idea of a \u201csuper star economy\u201d is very old. It goes back to Alfred Marshall, the father of modern microeconomics. In the late 1800s, Marshall was trying to explain why some exceptional businessmen amassed great fortunes while the incomes of ordinary artisans and others fell. He concluded that changes in communications technology allowed \u201ca man exceptionally favored by genius and good luck\u201d to command \u201cundertakings vaster, and extending over a wider area, than ever before.\u201d<\/p>\n

Ironically, his example of a profession where the best performers were unable to achieve such super star status was music. Marshall wrote, \u201cso long as the number of persons who can be reached by a human voice is strictly limited, it is not very likely that any singer will make an advance on the \u00a310,000 said to have been earned in a season by Mrs. Billington at the beginning of the last century, nearly as great [an increase] as that which the business leaders of the present generation have made on those of the last.\u201d<\/p>\n

Elizabeth Billington reputedly was a great soprano with a strong voice, but she did not have access to a microphone or amplifier in 1798, let alone to MTV, CDs, iTunes, and Pandora. She could only reach a small audience. This limited her ability to dominate the market.<\/p><\/blockquote>\n

In any profession requiring ‘live’ performance, the earnings of the very top of the class are limited because the scale of their market is limited – the very best plumbers, dentists, dancers, can make very, very good earnings, but it won’t be in the multi-millions per year, unlike those whose work can be read, listened to, or watched at a distance, like authors, recording musicians, and premier-league athletes. Plumbers, dentists and dancers can only perform for so many people at a time.<\/p>\n

So what’s going on? Krueger also suggests that there are now fewer social sanctions against bands who adopt profit-maximizing pricing, and so that could drive up the top ticket prices of the most popular acts; i.e. the share of the top 1% is rising because they no longer feel a need to price below market.<\/p>\n

But … I can’t find anywhere in the analysis, or in Lowrey’s, why they think there is a ‘middle-class squeeze’ in touring income. I don’t see it. Pomplamoose didn’t lose money because people were saving up to pay $200 to see U2 – their ticket sales were not bad, after all. Their revenues<\/em> were pretty good. What got them was costs – buses and roadies and insurance and agents and parking and cheap hotels. Going on the road costs a lot, and you can’t cover high expenses playing small venues, except at very high ticket prices.<\/p>\n

And these costs are nothing new – transport costs have fallen somewhat over the years, labor costs per person have risen although less labor over all might now be required – but it has always been a costly venture to take an act on the road. Krueger’s figures are concerned with the share of revenues<\/em> going to the top bands, and, fair enough, stadium-filling bands can take in a lot of millions. But that doesn’t explain why small bands can’t make net profit on touring. There is no grand theory of winner-take-all that generates this result. So let’s not read too<\/em> much into the story of a band on the road.<\/p>\n","protected":false},"excerpt":{"rendered":"

Well, Pomplamoose might not have made any money on tour, but band member Jack Conte’s accounting of revenues and costs has sure generated a lot of discussion, and hopefully more people who know about the band. My last post was about the fact that it has always been a tough way to make a living, […]<\/p>\n","protected":false},"author":3,"featured_media":1717,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[26],"tags":[],"class_list":{"0":"post-1715","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-issues","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/12\/Almost-Famous-tour.jpg","jetpack_shortlink":"https:\/\/wp.me\/p3dIW5-rF","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1711,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/11\/no-promises\/","url_meta":{"origin":1715,"position":0},"title":"No promises","author":"Michael Rushton","date":"November 26, 2014","format":false,"excerpt":"A few folks now have linked to the fascinating piece by Jack Conte of the band Pomplamoose (the high-school French student in me smiles) on an accounting of the costs and revenues, to the dollar, of mounting a month-long tour. Spoiler alert: even with good crowds, they lost money (just\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"just a singer in a rock and roll band","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/11\/photo-35-224x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1063,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/02\/today-in-tax-advice-the-winner-takes-it-all\/","url_meta":{"origin":1715,"position":1},"title":"Today in tax advice: the winner takes it all","author":"Michael Rushton","date":"February 17, 2014","format":false,"excerpt":"The Guardian reports on Swedish tax incentives: The glittering hotpants, sequined jumpsuits and platform heels that\u00a0Abba\u00a0wore at the peak of their fame were designed not just for the four band members to stand out \u2013 but also for tax efficiency, according to claims over the weekend. Reflecting on the group's\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"you can dance, you can jive","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/02\/abba.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/02\/abba.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/02\/abba.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":2902,"url":"https:\/\/www.artsjournal.com\/worth\/2023\/06\/what-classic-movie-best-captures-the-usa-right-now-breaking-away-obvs\/","url_meta":{"origin":1715,"position":2},"title":"What classic movie best captures the USA right now? Breaking Away, obvs…","author":"Michael Rushton","date":"June 21, 2023","format":false,"excerpt":"The New York Times asked 17 columnists to choose a single work. Maureen Dowd chose Invasion of the Body Snatchers, David French chose Arrival (great film, though I'm not entirely convinced as an answer to this question. But, and truly this is not hometown bias, the winner is a 1979\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/06\/image-2.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/06\/image-2.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2023\/06\/image-2.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":1833,"url":"https:\/\/www.artsjournal.com\/worth\/2015\/02\/superstars-have-always-been-with-us\/","url_meta":{"origin":1715,"position":3},"title":"Superstars have always been with us","author":"Michael Rushton","date":"February 24, 2015","format":false,"excerpt":"Paul Krugman takes a look at top earnings amongst musicians, and the 'superstar' effect - the idea that the vast share of consumer spending on music will go to a very small number of performers, since they can reach very large audiences through recordings and broadcasts (see my previous post\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"not actually Taylor Swift","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2015\/02\/Jenny_Lind_in_La_Sonnambula-227x300.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":1601,"url":"https:\/\/www.artsjournal.com\/worth\/2014\/10\/jean-tirole-theory-and-application\/","url_meta":{"origin":1715,"position":4},"title":"Jean Tirole, theory and application","author":"Michael Rushton","date":"October 13, 2014","format":false,"excerpt":"Jean Tirole has won the 2014 Nobel Prize in Economics. Because he works in microeconomic theory that is not easy going for those without advanced training in mathematics or economics, his is not a well-known name outside the discipline (even econ undergrad students may not have heard of him, though\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"not an easy read, but a great book","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2014\/10\/tirole-199x300.jpeg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":2738,"url":"https:\/\/www.artsjournal.com\/worth\/2022\/05\/book-diary-may-9-how-did-i-get-here-some-biography-econ-101ism\/","url_meta":{"origin":1715,"position":5},"title":"Book Diary – May 9 – How did I get here? Some biography, Econ 101ism…","author":"Michael Rushton","date":"May 9, 2022","format":false,"excerpt":"I am writing a book about The Moral Foundations of Public Funding for the Arts. My first diary entries are here and here. How did I come to be writing on this topic? Let's go way back... In high school I was one of the band room kids: French horn\u2026","rel":"","context":"In "issues"","block_context":{"text":"issues","link":"https:\/\/www.artsjournal.com\/worth\/category\/issues\/"},"img":{"alt_text":"just a singer in a rock and roll band","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/worth\/wp-content\/uploads\/2022\/05\/Elygra-rotated.jpg?resize=350%2C200&ssl=1","width":350,"height":200},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1715","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/comments?post=1715"}],"version-history":[{"count":5,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1715\/revisions"}],"predecessor-version":[{"id":1721,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/posts\/1715\/revisions\/1721"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media\/1717"}],"wp:attachment":[{"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/media?parent=1715"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/categories?post=1715"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.artsjournal.com\/worth\/wp-json\/wp\/v2\/tags?post=1715"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}