The Golden Age of Media Production

A fascinating paper from David Blackburn, a Harvard PhD student, on the economics of P2P file-sharing concludes that it does indeed depress music sales overall. But the effect is not felt evenly. The hits at the top of the charts lose sales, but the niche artists further down the popularity curve actually benefit from file-trading.

The Long Tail: The effect of P2P file-sharing depends on popularity

"The Long Tail" is an argument about the future of media; essentially, it argues that the bottom half of the market for anything at all (book, music, movie, etc) represents a larger potential market than the upper half. I'm afraid that I cannot very well present the argument here... please read Wired: The Long Tail if you haven't done so before.

This paper from David Blackburn argues that file sharing is reducing music sales, but only for the top quarter of musicians! The rest of musicians are actually helped by the exposure. What this means for the future remains to be seen.

I have a theory: I think we live right now in a golden age of media production. Right now, there is a tremendous amount of money available for producing films and CDs. The cost to publish media has dropped to nothing as there are now free publishing sites on the net (OurMedia). Independent film and music makers can publish vast quantities of material as a free download, earning money (if necessary) through advertising. While it's unlikely that these free media can compete one-on-one with major films, it is likely that they will be interesting to someone ("The Long Tail"). It is becoming much easier to find material (DTV, FireAnt, Creative Commons Search). I believe that when this independent media becomes easy to find, it will consume a significant portion of the market. This competition for consumer's time will make major media productions less lucrative. Ultimately, competition from a wide array of sources will hurt major media productions.