Streaming makes consumers happy. After all, what’s not to like? You can have the music you want, wherever and whenever you want it, and the hits just keep coming. Happy, happy, happy!
But wait. Are your favorite artists all grins and giggles about the “wonderful” technology that lets you take them with you 24-7? Maybe not. Like just about everything else in our lives, technological innovation has affected music – the way it’s composed, the way we hear it, and the way it’s sold.
As with technological change in every other industry, some people in the music business like it and some don’t. Nico & Vinz, and Lorde like it. Taylor Swift, Adele, Roseann Cash, Aloe Blac don’t. Economics is the study of how we make choices, identifying our alternatives, comparing the benefits, and – no matter how rich or famous we are – bearing the opportunity costs of our decisions.
The economic way of thinking provides insight into what makes musicians fans or opponents of digital streaming. Economic Reasoning Proposition #2 (cost/benefit analysis) and ERP #3 (identifying incentives) are the economic reasoning tools used in this Hot Topic to understand why artists’ stance on streaming is rational, whether they give it a thumbs up or thumbs down.
|The Streamin’ Blues (Students)
The Streamin’ Blues (Teacher Guide)
The FTE thanks Susanna Pierce, AP Macroeconomics and AP Government teacher at All Saints High School in Tyler, Texas, for the original draft of this Hot Topic and the attached handout. The lesson was edited, with permission, and any errors are the responsibility of FTE staff, not the author. (Questions or comments? Please contact firstname.lastname@example.org.)