Is the price of recorded music heading towards zero? – Will Page (2006)
Author(s): Will Page (PRS for Music)
Organisation/Affiliation/Publisher: Transmission Conference, London
Date: 02/12/2006
The paper offers a framework to help understand the economics behind the commonly held observation that the price of recorded music is ‘heading towards zero’. This economic approach helps show us how recorded music has long lost any notion of being a ‘pure private good’ and now risks becoming a ‘pure public good’. Music has become ‘non-rivalrous’ (If I consume an mp3 file, that doesn’t prevent you, and vice versa) and ‘non-excludable’ (it’s increasingly hard to deny others access). The theory is supported by evidence: P2P networks creating non-excludability and the unlimited ‘long tail’ supply of digital content is non-rival in its consumption. Both supermarkets and Spiral Frog are shown as ‘Tipping Points’ which risk pushing recorded music into a public good status – where the market could fail. So, given that digital music will never be ‘rivalrous’ in its consumption; the challenge is to force some measure of ‘excludability’ back upon the consumer, again.