In the years before Academy Fellow Alan Krueger’s death this March, the Princeton economist immersed himself in the financial workings of the music business. How does a song become popular? How does a new artist break out? How can musicians earn a living in the digital economy? Krueger’s research on these and other music-related questions led to a just-published book that dissects the industry, examines the possibilities for its future, and provides a jumping-off point for broader illustrations of the economic forces affecting our everyday lives.
In Rockonomics: A Backstage Tour of What the Music Industry Can Teach Us About Economics and Life, Krueger writes about his “seven keys to Rockonomics,” which, “like notes in a scale,” give the book its structure: supply and demand; scale and non-substitutability; the power of luck; the “Bowie theory,” regarding complementarities; price discrimination; cost management; and emotion’s impact on decision-making. And interviews with musicians such as Gloria Estefan and Steve Ferrone, the former drummer for Tom Petty’s Heartbreakers, give backstage views of the industry.
Rockonomics ties in with Krueger’s previous research on the “gig economy,” a concept with strong roots in the music industry. As Krueger shows, working more than one job or angle can be key to a successful career in music. Like the other economic ideas he showcases in his book, the gig economy concept has a wide application, even for those who can only carry a tune in a CD case.
Click here for a September 2018 podcast in which Alan Krueger discusses his research on the economics of the music industry.
