White House Chief Economist: Music’s Middle Class Under Attack By Forces It Can’t Control

middle class“The music industry is a microcosm of what is happening in the U.S. economy at large,” according to Alan Krueger, chairman of the White House Council of Economic Advisers. “We are increasingly becoming a ‘winner-take-all economy,’ a phenomenon that the music industry has long experienced." For example, the top 1% of performing artists earn 56% of all concert revenue, according to White House.  And things are getting worse. 

Since 1982, the top 1% of performers have gone from earning 26% of concert revenue to 56%.

White House
Who Or What Is To Blame?

"Over recent decades, technological change, globalization and an erosion of the institutions and practices that support shared prosperity in the U.S. have put the middle class under increasing stress," Krueger said in a recent speech. "The lucky and the talented – and it is often hard to tell the difference – have been doing better and better, while the vast majority has struggled to keep up.”

Fans Are Like Sheep…

Krueger also pointed to a study by sociologists Matt Salganik and Duncan Watts which showed that consumers were easily tricked into downloading a mediocre song if they were told that it was popular with others.


“In addition to talent, arbitrary factors can lead to success or failure, like whether another band happens to release a more popular song than your band at the same time,” said Krueger. “The difference between a Sugar Man, a Dylan and a Post Break Tragedy depends a lot more on luck than is commonly acknowledged.”

Read the full speech on the White House blog here.

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  1. Well maybe the US GOV might want to start standing up for USMADEMUSIC, There has not been one thing done by any agency or body of Gov to help those of us that continue to fight for an industry that America invented.

  2. Thank you Nelson. The fact that Krueger uses the music business as an economic “warning” in a speech is ironic in and of itself. I have been in this business for decades and the collapse came as a result of the same political malaise that’s enabled Big Banks to screw us- the failure to enforce laws– in our case, copyright laws– and the enactment of protections or defeat of bills against those breaking the law, pur and simple. The modern music business was built on copyright and the government failed to protect copyright or its economic underpinnings. The music business wasn’t “too big to fail” I guess.

  3. Thank you Nelson and John.The very point I was getting at in my posts regarding the last Upward Spiral pod cast (#25).Because the copyright laws seem toothless, “If we can-We will”.
    Yes everyone’s favorite champion for “we can-so we will!(steal)
    The queen of the entitled generation, Ms. Emily White. “We can all Take intellectual property and we won’t get sued.So it’s right!”
    You may notice that no one seemed to put up a good argument for stealing, though she did warn the film industry to get it together cause, people will just take it in countries where it’s not released yet!
    So various industries Get your distribution system together or we will just steal your works! Nice!
    Ron Fuller http://youtu.be/2nLGtBwn5R0

  4. Now having talked a number of people in our National Gov from the Import Export Bank, Start Up America and many members of Congress and most of them seem to think that US Music biz doesn’t even exist. So that is the biggest issue IMHO to get straighten out. BTW for those that look at trade data the US is on track to become a net importer of music by 2015 unless we start to stem the tide and get USMADEMUSIC back as priority.

  5. So, no one is addressing the elephant in the room: the monopolization of concert venues by enities that also control concert tickets and prices who also manage most of the artist they tend to book at said venues?

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