RS7 The Economics of the Music Industry

In their news show on October 16^th, 2012, Zoey Chase and Robert Smith from National Public Radio did a piece on the hit Korean pop song, “Gangnam Style”, and the singer Psy. They did a great job of assessing the video from a business standpoint. She commented on its unbelievably fast success in America and described how Korea plans to utilize their, now viral, song. In Korea, exports range from cars to computers, and “Gangnam Style” is just another export to them. Psy, the singer, has created a song that competes in the charts worldwide, going up against larger pop culture names like Rihanna and becoming most requested songs on popular radio stations like 92.3 NOW in the Tri-State area even though people may not even understand all the words they are singing along to. This song is an export of K-pop, as they call it in Korea, and they continue to grow K-pop worldwide in a few major ways. Korea chooses to industrialize their music, they find the raw singers, bring them to a factory, teach them how they need to sing to be popular, cut the record, and sell it off to other countries. Korea labels are transforming the ways music is released. Instead of utilizing the radio, they are creating viral music videos for YouTube in the United States and airing the music videos on Korean television. NPR representative Zoey Chase even mentioned that people are considering “Gangnam Style” the K-pop version of Thriller.

America still produces one thing best, American pop music. Anywhere in the world, you can hear the essence of America. Taylor Swift is an American product. She is an American export, and just like any export, there are other countries who want our market share. Everybody is fighting to create their own Taylor Swift. That’s exactly what Korea has done with Psy, singer of “Gangnam Style.” They hope that Psy can compete with American artists and take over all the charts.

It isn’t weird in America to drive a foreign car while on a Samsung phone, but it is slightly weird to listen to 92.3 NOW and listed to Psy, a foreign, excuse, of a singer.

How do record labels make money? Robert Smith and Zoey Chase did a piece on Katy Perry a few days later. Did Katy do as well as it seems? Her songs hit the tops of the charts and she came out with a movie that seemed successful. But, did she make any money or even breakeven?  Musc should be about entertaining people, and not about the money! I understand it is an important “product” but the music industry has become was too commercialized for my liking.

Katy Perry had tied record label success with Michael Jackson. Her record label industry spokesperson was hesitant in straight out saying that Katy Perry did well financially this year. Katy Perry sold 2 million albums and 24 million individual songs downloaded on iTunes. That comes out to 44 million dollars. Apple takes a 30% cut of the 99 cent sale of a download. A percentage also goes to the song writers, costume designers, and all sorts of overhead. All in all, when the numbers are crunched, the work and finances that go into Katy Perry’s music do not breakeven with the success they receive.

Five of Katy Perry’s songs were in the top spot last year which means they played 19 times per day on any given radio station.

So what’s the point of pop culture then? Would people know that they like K-Pop if they had never heard it before? Probably not. I would never openly pick out a song called “Gangnam Style” from a list of songs to listen to, and I definitely wouldn’t enjoy the song the first 10 times I heard it. If a song was truthfully a great song that anybody could enjoy, their marketing expenses would be more than unnecessary. The fact that a song or an artist turns into a line of toothbrushes, t-shirts, and perfume is absolutely heinous to me. I’m not a hippie or a music junkie, but I truthfully believe the music industry in America is on a downhill slope.