What Ails the Music Industry?
Tyler Cowen recycles some insights from his highly recommended Good and Plenty:
In the past most people didn't much like or listen to most of the music they bought, or in any case most of the value came from their very favorites. A relatively small percentage of our music purchases accounted for most of our listening pleasure. So if people can sample music in advance, and know in advance what they will like, music sales will plummet. This will be a sign of market efficiency, not market failure.
Right. Obviously, from the point of view of a record company executive, a "healthy music business" is one which maximizes his profits. From a more reasonable point of view, the relevant metric is consumption of music. On the one hand, you have declining sales. On the other hand, you have the basic truth that people now have easier access to a wider array of music than ever before, along with better devices on which to listen to it, and much more convenient ways to store it.