Knowing and Making

I've been listening to NPR's Planet Money podcast, and one of the recent episodes  [mp3 link] is about how much it costs to make - and promote - a hit single. Or more accurately: to attempt to make a hit single. A friend in the music industry asked me to write down their figures with so he doesn't have to listen to the whole podcast. So here they are. The record in question is Rihanna's "Man Down", which her record company Def Jam was hoping would be one of the anthems of the summer. The costs break down like this: Initial demos made at a "writing camp": $18,000 (it costs around $200,000 to hire 10 studios for a couple of weeks and make 50-100 demos for Rihanna to choose between; this cost is apportioned over the 11 tracks on the album) Fee to lyricist: $15,000 Fee to producer/composer: $20,000 Fee to vocal coach/producer: $10-15,000 Cost of other studios and recording costs: $10,000 Total production cost: around $78,000 And then the marke...

I plan to write a lot more about this in the coming weeks. But for now I want to respond to Andrew Gowers ' and Andy Burnham 's debate in the FT. Reading either article in isolation, you might be convinced. On the one hand by Gowers' assertion that extending copyright creates no economic incentive to create new work, and incurs administrative costs out of proportion with the benefit to the owners. On the other, by Burnham's sympathetic picture of retired vegan musicians losing their sole income and seeing their work abused in foie gras advertisements. Maybe I'm betraying my inclination in this argument. But despite broadly agreeing with Gowers on this, I do understand the political logic and compassionate aspect of Burnham's position. Economically it's a tricky issue, and Burnham is actually on the side of economic orthodoxy. Economists tend to consider that property rights are an incentive for people to create, husband and market their assets. They also ass...