November 16, 2018 / 7:34 PM / a month ago

Breakingviews - Review: New tech brings golden age of media

A commercial board for the Apple Computer Inc.'s iPod is seen inside a metro station in downtown Paris March 22, 2006. REUTERS/Charles Platiau

NEW YORK (Reuters Breakingviews) - The internet is both a blessing and curse. It has given consumers around the world access to an unimaginable trove of music, movies, television shows and books, all at the touch of a button. But it sometimes seems as if the deluge is watering down popular culture – and undermining the economics of the artists and companies we rely on to keep us entertained.

Joel Waldfogel begs to disagree. The University of Minnesota business professor believes technology is fostering a golden age of pop culture, not dumbing it down. In “Digital Renaissance,” he argues that we not only have more reading, viewing and listening material than ever before, but it’s better. And he’s got data to back that up.

Boy does he have data. Waldfogel surveys decades worth of music magazines like Rolling Stone to come up with a critic index, which effectively measures the growth of positive reviews of new albums. This metric shows a peak in the 1970s but remains broadly steady after the rise of Napster in 1999, indicating that good music didn’t suddenly dry up because college kids were sharing music instead of buying it. Better yet, he argues, this digital explosion didn’t destroy the industry’s economics. The top 10 albums released from 2000 to 2009, according to critics, sold at least half a million copies. These included albums like “Funeral” from Arcade Fire, which in 2006 didn’t make the Billboard chart of top artist by airplay on traditional radio.

Napster of course was shut down. Its successors, streaming services like Spotify, Pandora and Apple Music, were originally resisted by record companies and artists like Taylor Swift and Adele. Yet they now drive an industry that’s arguably as vibrant as ever.

Streaming helped boost U.S. music revenue to $8.7 billion in 2017, a 25 percent increase from 2013. And the technology’s lower production and distribution costs have also enabled new artists to emerge and thrive. Lorde posted her first album, “The Love Club,” on SoundCloud in 2013. The following year the New Zealand teenager’s album “Pure Heroine,” featuring the same songs from “Love Club,” sold more than 1 million copies.

Waldfogel adopts a similar approach to movies. He takes data from online review aggregator Rotten Tomatoes to show that the number of films scoring 84 or higher, on a scale of zero to 100, increased from 22 in 1998 to 100 in 2016. That’s a dubious measure of quality. Audiences, after all, can be dumbed down or lured into rating inflation by the very online services that purport to measure quality.

Media companies are practiced in the art of using cultural arguments to defend their turf. After all, artists need to be paid a fair wage so consumers can continue to enjoy a wide range of popular culture. But if it was just about the consumer, then companies would not have lobbied against net neutrality, which the administration of President Donald Trump overturned this year. This makes it easier for providers like Comcast to slow down internet speeds for, say, Netflix, while making it easier to stream from Hulu, the online video-streaming service owned by Disney, Comcast’s NBC Universal and AT&T. Constraints like these by internet providers could lead to a revival of gatekeepers – a set of companies and executives choosing what is good enough to be produced and released.

But Waldfogel’s narrative suggests such efforts are not likely to succeed. Pop culture changes as rapidly as technology. Both forces should continue to provide plenty of good movies, television shows and music to enjoy, even if the profits aren’t as lucrative or shared out by the same players.

Breakingviews

Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.


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