How does downloading music effect the economy?
Please some help on this subject
Answer:
Music is a luxury good - or at least downloading music is a luxury good. As a previous writer said it helps some people in their work, while I am not agreeing or disagreeing with the statement, we know that unlike steel to build a bridge, it is not one of the essential inputs of production. That is why I call it a luxury. But just because it is a luxury good, does not mean that it is unimportant or has no impact on the economy. The impact upon the economy is similar, but not identical to the broadcasting of a radio signals
Now I see two impacts of downloading must - There is the employment side and the want satisfaction side. People have to digitize the music, manufacture the hardware and write the software used to downloading the music. This is quite similar to radio transmission of music. Persons have to manufacture radios and build radio stations such that the music could be broadcast and could be received. That is the supply side of the equation.
The demand side of the equation is that people want to listen to the music that is being downloaded (or broadcast in the radio situation). To do so they are willing to pay the price to purchase the equipment, send the time to learn how to use the equipment, and pay for the download. With radio, the price was paid by the advertisers, but that means the station had to play commercial to pay for their equipment. The listener had to pay by buying the radio receiver and not having uninterrupted music. All of this, whether it is music over the radio or from downloading is done to satisfy a desire for music. The desire for mobility and transportability is extremely important today so arises the iPod.
Downloading music is not unique to the economy it is only a way of meeting our wants and desires in a fairly new way. Similar to the production of other products there are persons that choose not to consume the product and others that choose to steal. it. So a whole new underground economy springs up.
it increases the productivity by making a wider range of music available to people, so they can concentrate better at work, and relax better at home.
Downloading music that has been paid for effects the economy by circulating new capital (the money you spend) through the recording industry. This money is then used to finance the production of new music (which is sold), to finance the selection and choice of new artists (which produce music which is sold), or to line the pockets of those who own the company (who then turn around and purchase things, starting the cycle over again).
Downloading music that has NOT been paid for slowly drains away capital from the music industry; they have less money to pay artists, produce new music, and hire new artists. Let's be honest; they're not going to line their pockets less... they're in the business to make money, not make music.
The music industry takes in and spends lots and lots of money. Anything that hurts their products distrubs their cashflow; this in turn makes them make more choices on where they spend the money. Gas is more expensive, you drive less. Same principle.
In short: Purchasing and downloading music helps the economy by spending money into an industry. Downloading music without paying for it takes a product from the industry (that they have to pay to create) without handing them back compensation. Eventually (should the balance of freeloaders overwhelm the buying power of paid customers), the music industry'll have to cut back on production, or come up with even more onerous DRM laws, to attempt to protect their "bottom line", which in either case means we'll have less selection of music to choose from.
There are a couple of different ways to look at music downloading. From an industry point of view, music sharing is a totally negative thing. The music industry would rather you purchase an entire album to get the song you want, and all distribution go through them. With downloading, the artists do not receive any tangile benefit from the use of their work, and this may discourage new artists from entering the field.
From an economic point of view, music downloading is a mixed blessing. The overall economy benefits from the additional purchases of devices that will play the downloaded songs, like an iPod or other product. There is a chance that releasing singles may encourage customers to buy the whole album or attends the concert. The record industry loses sales, but in total, the activity in the economy will probably increase.
There is also the theory of the long tail, which says that while a large number of people will be interested in a small number of very popular products, there is a "long tail" of people who are interested in a great many products. Each item may only sell a few copies, but in total, the sales of the "long tail" may equal or outweigh the the sales from the few popular products. The large number of small volume items can only be sold on-line, where there are no shelf space limitations, and by offering a large number of products, sellers will increase the total amount of record sales, and customers will reap the benefits of this increased choice and make purchases they would have otherwise not made.
The existence of downloading will change the music industry, moving it away from a few recording companies dictating what everyone listens to, but this is not necessarily a bad thing. Increased choice is beneficial to the consumer, and the ultimate producers of music, the artists, will come up with different strategies to extract value out of their works, through increased touring or other means.
The recording industry will lose revenue and profits as music distribution moves away from them, but musicians will continue selling their music through one channel or another, and the consumer will be better off. As a whole, I believe that the economy, as defined as the total amount of benefit generated in society, will increase as music downloading increases, and the economy will benefit.
Not as drastically as the recording studios would make you believe.
The difference between music piracy vs theft is that it doesn't actually cost the recording studio anything. If I take something out of Walmart, they loose money. However If I download a song illegally, they don't actually loose money.
However, if I download it rather than buy it, they've lost the opportunity to make money from me.
People will always pay for music in some way or another. Royalties, radio, subscriptions, purchases, concerts, etc. What downloading does is it changes the way (and often who) makes money from music.
Humans are resistant to change.especially the type of change that could cause them to make less money.
The other big difference is that people no longer need to purchase an album to get one song. This will promote artists to make quality songs rather than one song that sells for $16 dollars. More artists will create hits.
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Answer:
Music is a luxury good - or at least downloading music is a luxury good. As a previous writer said it helps some people in their work, while I am not agreeing or disagreeing with the statement, we know that unlike steel to build a bridge, it is not one of the essential inputs of production. That is why I call it a luxury. But just because it is a luxury good, does not mean that it is unimportant or has no impact on the economy. The impact upon the economy is similar, but not identical to the broadcasting of a radio signals
Now I see two impacts of downloading must - There is the employment side and the want satisfaction side. People have to digitize the music, manufacture the hardware and write the software used to downloading the music. This is quite similar to radio transmission of music. Persons have to manufacture radios and build radio stations such that the music could be broadcast and could be received. That is the supply side of the equation.
The demand side of the equation is that people want to listen to the music that is being downloaded (or broadcast in the radio situation). To do so they are willing to pay the price to purchase the equipment, send the time to learn how to use the equipment, and pay for the download. With radio, the price was paid by the advertisers, but that means the station had to play commercial to pay for their equipment. The listener had to pay by buying the radio receiver and not having uninterrupted music. All of this, whether it is music over the radio or from downloading is done to satisfy a desire for music. The desire for mobility and transportability is extremely important today so arises the iPod.
Downloading music is not unique to the economy it is only a way of meeting our wants and desires in a fairly new way. Similar to the production of other products there are persons that choose not to consume the product and others that choose to steal. it. So a whole new underground economy springs up.
it increases the productivity by making a wider range of music available to people, so they can concentrate better at work, and relax better at home.
Downloading music that has been paid for effects the economy by circulating new capital (the money you spend) through the recording industry. This money is then used to finance the production of new music (which is sold), to finance the selection and choice of new artists (which produce music which is sold), or to line the pockets of those who own the company (who then turn around and purchase things, starting the cycle over again).
Downloading music that has NOT been paid for slowly drains away capital from the music industry; they have less money to pay artists, produce new music, and hire new artists. Let's be honest; they're not going to line their pockets less... they're in the business to make money, not make music.
The music industry takes in and spends lots and lots of money. Anything that hurts their products distrubs their cashflow; this in turn makes them make more choices on where they spend the money. Gas is more expensive, you drive less. Same principle.
In short: Purchasing and downloading music helps the economy by spending money into an industry. Downloading music without paying for it takes a product from the industry (that they have to pay to create) without handing them back compensation. Eventually (should the balance of freeloaders overwhelm the buying power of paid customers), the music industry'll have to cut back on production, or come up with even more onerous DRM laws, to attempt to protect their "bottom line", which in either case means we'll have less selection of music to choose from.
There are a couple of different ways to look at music downloading. From an industry point of view, music sharing is a totally negative thing. The music industry would rather you purchase an entire album to get the song you want, and all distribution go through them. With downloading, the artists do not receive any tangile benefit from the use of their work, and this may discourage new artists from entering the field.
From an economic point of view, music downloading is a mixed blessing. The overall economy benefits from the additional purchases of devices that will play the downloaded songs, like an iPod or other product. There is a chance that releasing singles may encourage customers to buy the whole album or attends the concert. The record industry loses sales, but in total, the activity in the economy will probably increase.
There is also the theory of the long tail, which says that while a large number of people will be interested in a small number of very popular products, there is a "long tail" of people who are interested in a great many products. Each item may only sell a few copies, but in total, the sales of the "long tail" may equal or outweigh the the sales from the few popular products. The large number of small volume items can only be sold on-line, where there are no shelf space limitations, and by offering a large number of products, sellers will increase the total amount of record sales, and customers will reap the benefits of this increased choice and make purchases they would have otherwise not made.
The existence of downloading will change the music industry, moving it away from a few recording companies dictating what everyone listens to, but this is not necessarily a bad thing. Increased choice is beneficial to the consumer, and the ultimate producers of music, the artists, will come up with different strategies to extract value out of their works, through increased touring or other means.
The recording industry will lose revenue and profits as music distribution moves away from them, but musicians will continue selling their music through one channel or another, and the consumer will be better off. As a whole, I believe that the economy, as defined as the total amount of benefit generated in society, will increase as music downloading increases, and the economy will benefit.
Not as drastically as the recording studios would make you believe.
The difference between music piracy vs theft is that it doesn't actually cost the recording studio anything. If I take something out of Walmart, they loose money. However If I download a song illegally, they don't actually loose money.
However, if I download it rather than buy it, they've lost the opportunity to make money from me.
People will always pay for music in some way or another. Royalties, radio, subscriptions, purchases, concerts, etc. What downloading does is it changes the way (and often who) makes money from music.
Humans are resistant to change.especially the type of change that could cause them to make less money.
The other big difference is that people no longer need to purchase an album to get one song. This will promote artists to make quality songs rather than one song that sells for $16 dollars. More artists will create hits.
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