Citizen Kanye

December 1, 2010
Posted by Jay Livingston

I wish I knew more about the economics of the music business.

At first glance, it looks like Kanye West’s decision to sell his new album for $3.99* at Amazon is putting pride ahead of profit. Zach Baron at the Village Voice says that Kanye did it only because of the swift sales success of another album, “Speak Now,” by, oh, what was her name? You know, that one at the VMA.

There’s money, and there’s competitive, striving megalomania. (I can’t believe I am the first person to come up with the pun in the subject line of this post. But if someone else did put it out there, Google’s algorithm places it far down on the list.) In some areas, striving and ego go together like a horse and carriage. At the financial houses (Goldman Sachs, et. al.), they say that those multi-million dollar bonuses are not about the money and what it buys. The dollars are just a way of keeping score. You want a $20 million bonus because the guy at the next desk got $18 million.

But apparently, in the music business, at least for the top stars, what you keep score with is not dollars but sales, regardless of the economics.

the rush toward ever lower pricing . . . pushes the consumer cost of an album ever closer to that terrifying price point: free. Nobody in the industry wants that, let alone a guy poised to sell something in the neighborhood of a million records over the next week.

It’s like the old joke about the businessman who has cut his price so low that he’s losing $2 on every item he sells. When asked how he can do that, he says, “We’ll make it up in volume.”

I guess Kanye’s beautiful, dark, twisted response would be, “We’ll make it up in ego.”


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* Now, after the first week surge, the download price has gone up to $4.99.




HT: Tyler Cowen for the link to the Voice.

Searching for Consistency

November 30, 2010
Posted by Jay Livingston

Our department secretary flew to California last week. She said that the security lines at JFK zipped right along. Neither she nor her husband nor any of the other travelers minded the new search procedure, nor did it cause any delays. Why then did the media give so much coverage to the TSA and its antagonists during Thanksgiving week?

Pure politics. All the fuss is coming from the right. But as Ross Douthat said in his New YorkTimes column on Monday, if George W. Bush had been in office when the scanner policy came down, the same people who are whining about Big Government violating the Constitution and trampling on Privacy and Freedom would be draping the scanning machines in Old Glory.

Here’s an example of reaction on the right.

(Click on the image for a slightly larger view.)

Had Bush been President,* Drudge would have been saying that only terrorists and their allies would want to resist the TSA. And the photo would show not a nun but Osama bin Laden or the Shoe Bomber.

Douthat also guesses that liberals would have opposed the new scan and grope procedures if Bush were President. Possibly, but they certainly wouldn’t have made as much noise about it. Even now, lefty bloggers are not extolling the TSA as the thin line keeping Al Qaeda bombs from our planes. And Obama and Napolitano sound conciliatory (“Sorry, folks, but we have to do this”) rather than patriotic, pugnacious, or protective in the GOP style (“Which is worse, being patted down or blown up? Take your pick.”)

The right and left also divide over who should be searched. Conservatives favor racial profiling; liberals oppose it. But racial profiling too raises the problem of political consistency – not all by itself, but when it sits down next to Affirmative Action. As Elvin Lim wrote in Faster Times (the day before Douthat’s column in the slower Times),

It seems, then, that one can either be for race-based profiling and affirmative action, or against both. What is problematic is if one is for one but not the other.

But doctrinaire liberals and conservatives split their preferences – for one and against the other.

My guess is that most liberals are for race-based affirmative action but against racial profiling, and most conservatives are against race-based affirmative action but for racial profiling.

Lim also thinks that the consistency problem is thornier for conservatives.

For the conservative who is against race-based affirmative action but for profiling, the problem is stickier. Almost every anti-affirmative action argument I have come across turns on the principle of formal equality: that discrimination on the basis of race is wrong, no matter what the policy intentions may be. [Lim’s italics]

Greater equality and opportunity is a policy intention, so is air safety. If you’re a conservative and, like Steven Colbert, you don’t see color, if you’re for color-blind hiring and college admissions, then you should be for color-blind everything, including airport screening.

Another part of the conservative dilemma might be that conservatives have a lower tolerance for ambiguity. They prefer “moral clarity” – adherence to a simple principle. So while in practice they will hold tight to their inconsistent positions on racial profiling and affirmative action, they’ll have a harder time dealing with the cognitive dissonance.

* In fact, Bush was President when the photo Drudge used was taken. It’s from 2007. But it was of a nun being patted down, and I guess Drudge found it just too good to pass up. (See here.)

Cooler Than Other Majors

November 29, 2010
Posted by Jay Livingston

What can you do with a BA in sociology? Ask Mike Posner, whose album “Cooler Than Me” has been in the top 10 world wide and in the US.

(Click on the image for a larger, readable view.)

The money quote (the red underlining is my own addition): “According to Posner, his sociology study has helped with his music.”

The above is from Undercover, which also has a video interview. (and does not know how to spell Clive Davis’s name).


HT: Global Sociology via a Social Psych tweet.

Sunday Traffic

November 25, 2010
Posted by Jay Livingston

It’s Thanksgiving, and that means football on television.

The NFL games are probably not something the Pilgrims had in mind, but they have become part of the tradition. I don’t know if turkeys have gotten bigger, but the NFL line-up has expanded from one game to two and now three. The games span eleven hours of TV time, with a short break between the afternoon and evening games (assuming no overtime). No matter when the meal is served, there’s a football game on. So I wonder whether the television is complementing the family-and-food part of the holiday or competing with it. In economists’ terms, are these goods complementary or supplementary?

I did come across some research on one good that does compete with the NFL. The data-heads at Tube8.com looked at the number of visits to their site from various NFL media markets, especially on bye weeks, the one week in the 17-week season that each team gets to rest. What do the fans do on Sunday if the home team isn’t playing? Or maybe I should ask, What don’t they do if the team is playing?

The Tube8 statisticians looked at the numbers of visits they got from NFL cities on three types of Sundays:

• The average Sunday
• Sundays during football season
• Sundays during football season but when the home team had a bye

Here are the results for five cities. (There are 32 NFL teams. I couldn’t put them all on a graph that fit on one screen.)

(Click on the graph for a larger view.)

As the graphs shows, football takes a bite out of Tube8's traffic. What kind of traffic is that, you ask. I should have mentioned that Tube8 is a porn site – so NSFW that I’m not even hyperlinking it. (I check these things out so that you don’t have to.)

On average, an NFL game reduced Tube8's traffic by about 18%. When the home team had a bye, traffic was down, but only by 10%. Some guys will take pigskin over skin no matter who’s playing.*

All NFL cities showed this same pattern. For some teams (New York, Green Bay), the Sunday-to-Sunday differences were barely noticeable. In others (Kansas City, Seattle, San Diego), they were twice the average. (Deadspin has the numbers for all 32 franchises.)

In any case, whatever pleasures you’re indulging in today, Happy Thanksgiving.

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*I wouldn’t make too much out the raw numbers on visits or say that one city is more porn-minded than another since I don’t know the size of the area that Tube8 (or their source, Google Analytics) defines as “Seattle” or “Pittsburgh” or wherever.

HT: Victor Matheson at The Sports Economist.