“Selling less of more?” The impact of digitization on record companies

In this paper, we use data from a survey of 151 French record companies to test the “long-tail” hypothesis at the level of the firm. More specifically, we test whether, following the “selling less of more” principle coined by Anderson (2006), record companies that have adapted to digitization (at various levels: artists’ scouting, distribution, and promotion) release more new albums without having higher overall sales. We construct a production function in which the output is produced from conventional inputs of labor and capital, as well as inputs that are more specific to the recorded music industry. We consider two types of output: a commercial output (albums sales) and a creative output (number of new albums released). We show that labels that have adapted to digitization are more efficient in respect of creative output, but that there is no effect of adaptation to digitization on the commercial output, which is consistent with the predictions of the long-tail hypothesis.     

The Supply of Arts Labour : Towards a Dynamic Approach

Earlier work on the supply of labour of artists has shown that, whenever workers derive satisfaction from the process of work, which is usually the case for artists, some traditional results are reversed. As their proponents make clear this analysis is essentially static, as it does not take into account the intertemporal dimension of the supply of labour. The paper argues that to provide such a dynamic analysis three routes are available: the human capital approach, the household production approach and the evolutionary approach. The paper, therefore, is aimed at discussing the adequacy of various theoretical approaches to the treatment of a specific question.     

Private or Public?

This paper concerns the consequences of subsidizing art production. Once a government offers grants and subsidies, artists can decide between public and private funding. A joint model of this choice-situation and the related earnings is derived. The model is tested for the case of visual artists in the Netherlands. The analyses show that subsidizing artists enhances a winner-takes-all tendency for the market at large. Financial success on both the private and the public market appears to be not particularly related to human capital, but to personal characteristics, government recognition and (unobserved) talents.     

Artistic education matters: survival in the arts occupations

The literature of cultural economics generally finds that an artistic education has no significant impact on artists’ income and careers in the arts. In artists’ labor markets, indefinable features such as talent and artistic creativity apparently contribute more to success or higher rates of payment than education and training. In this article, we will readdress this question by looking at the artists’ survival in the arts occupations. We find it reasonable to expect than an artistic education can have a significant impact on artists’ careers because of the importance of technical skills, networks and signaling effects. We analyze the question by using a unique longitudinal dataset for five different groups of artists in Denmark, using the Cox model to apply survival functions and semi-parametric analysis. The results show, among other things, that an artistic education has a significant impact on artists’ careers in the arts, and we find important industry differences.     

Impact of war on individual life-cycle creativity: tentative evidence in relation to composers

The relationship between conflict and individual life-cycle artistic output is ambiguous, both a priori and in terms of the evidence. To address this question in relation to composers, we employ a sample of 115 prominent classical composers born after 1800 and attempt to link their annual productivity with the incidence of wars. While the sample is small and the measure of creative productivity limited, we find evidence that the impact of wars on the timing of individual creative production is significant and negative, in keeping with the evidence on the impact of wars on overall societal creative output.     

Specificities of the artistic cultural labor market in Brazilian metropolitan regions between 2002 and 2010

This paper analyzes the singularity of artistic cultural sector workers in the Brazilian metropolitan labor market, considering the job satisfaction of artists that Throsby proposes in his work preference model of artist behavior (1994). We also examine the effect of public expenditures on the income of workers in the cultural sector. Using 2002 to 2010 data from the Monthly Employment Survey (PME) and administrative records from Finance of Brazil (FINBRA), we estimate a probit model and a wage equation. In our model, we estimate wages as a function of: (1) sociodemographic characteristics of workers, (2) a variable for informal jobs, (3) the number of working hours, (4) a variable for the worker having another job, (5) per capita expenditures on culture interacted with a dummy for artistic cultural workers, (6) interactive binary variables involving place of residence and artistic cultural workers and (7) the predicted probability obtained by the probit model. This probability is estimated based on the likelihood of working in a creative activity, considering both workers from the cultural sector and other workers, controlled by: (1) sociodemographic characteristics of workers, (2) characteristics of their jobs, (3) dummies for the metropolitan regions and (4) willingness of creative workers to work additional hours interacted with the number of hours worked. Our results show that workers in the cultural sector are likely to work longer hours when compared to workers in other sectors. For our wage equation, the results suggest that women earn relatively less than men and blacks earn less than whites. Furthermore, earnings increase with age and the level of education. Formal workers obtain higher earnings when compared to informal ones. Finally, an increase in the per capita public expenditure on the cultural sector raises the income of workers in artistic cultural occupations.     

Knows no weekend: the psychological contract of cultural work in precarious times

ABSTRACT

This article explores the expanded and transformed nature of the psychological work contract for forms of cultural and artistic labour in precarious conditions. The forms of passionate work found within cultural production are argued to form a new model for governing our subjective involvement in and attachment to work. This more expansive and demanding relationship with work has become generalized beyond the specific area of cultural production into employment relationships more generally. In doing so the expanded psychological contract of work comes to operate as a form of logistical media and infrastructural governance, connecting the micropolitics of governing labour with larger structural conditions of precarity and instability. Thus, while work today is less stable in what it offers, it demands even greater psychological investment despite increased uncertainty.     

Input-output and demographic accounting: A tool for educational planning

Conclusion In this paper I have tried to bring together various forms of input-output accounting and analysis suited to dynamic problems. In the usual, static accounting system, the entries all relate to a single time-period and the set of accounts is completely closed. In the alternative, dynamic system suggested here, the inputs for a given period come, either in whole or in part, from the preceding period and the outputs go, either in whole or in part, to the succeeding period.Two types of model can be built within the framework of this dynamic accounting structure: the conventional input-output model, in which the input coefficients are fixed; and an allocation model, in which the output co-efficients are fixed. The conventional model is appropriate to the analysis of production flows; the allocation model to that of demographic flows. These two models provide us with the main building blocks for an educational model, since as far as the human inputs are concerned the educational system is simply a partition of the demographic system, and as far as the economic inputs are concerned it is a partition of the productive system. A first attempt at combining the two was described in my earlier article.     

Confronting Precarity in the Warhol Economy

Normative cultural economy discourse on New York City embraces the creative industries as engines of job creation but neglects the quality of employment within them. This article sets out to both illuminate the precarious conditions of nonstandard workers in New York's vaunted creative sectors and identify emerging collective responses to precarity in this city. Three areas of labour activity are focused upon: fashion industry frictions, art world agitations, and independent worker initiatives. Under each of these headings, the article profiles two organizations that are variously exposing, resisting, and mitigating precarity among flexible labour forces in the arts, the media, cultural industries, and beyond. The discussion of these organizations is informed by interviews with some of their protagonists, by documents produced by the organizations, and/or by media coverage of them. Challenging the assumption that getting by in informal cultural labour markets obliges individual coping strategies, this article reveals scenes from a metropolitan laboratory of precarious labour politics. These initiatives are inklings of a recomposition of labour politics in which flexible workforces in creative industries are important participants.     

An economic model of artistic behavior

Conclusion What we have accomplished is to provide a framework in which artists are seen as economic individuals who base decisions on the same set of factors as nonartists. We are uncomfortable with the notion that artists are a special breed who are not responsive to economic incentives. We are also uncomfortable with the notion that nonartists could never be artists. However, the model as presented does allow for the possibility that an artist will incorrectly estimate the worth of his or her works, and continue to pursue an artistic career. It also allows for the possibility that some nonartists may also make the wrong choice and pursue a nonartistic career instead of an artistic one.     

Evaluating the effects of direct support on the economic situation of artists

The paper deals with the relationship between direct public support for artists and the economic situation of artists. The empirical findings stem from a research project on the situation of artists in Finland. Some problems connected with obtaining relevant data on artists' economic situation are presented. The effects of direct financial support granted to individual artists on their income level and income discrepancies are illustrated with different patterns of impact. A brief presentation of the goals and measures of public policy towards artists in Finland is given, and the relationship with policy objectives and income effects of direct artists support is discussed. Two issues relevant for evaluating artist policy are raised: the need to account for the fundamental differences between art fields and artistic occupations, and the need to study the actual functions grant income has for the artists.     

The happy artist: an empirical application of the work-preference model

The artistic labor market is marked by several adversities, such as low wages, above-average unemployment, and constrained underemployment. Nevertheless, it attracts many young people. The number of students exceeds the available jobs by far. A potential explanation for this puzzle is that artistic work might result in exceptionally high job satisfaction, a conjecture that has been mentioned at various times in the literature. We conduct the first direct empirical investigation into artists’ job satisfaction. The analysis is based on panel data from the German Socio-Economic Panel Survey. Artists on average are found to be considerably more satisfied with their work than non-artists, a finding that corroborates the conjectures in the literature. Differences in income, working hours, and personality cannot account for the observed difference in job satisfaction. Partially, but not fully, the higher job satisfaction can be attributed to the higher self-employment rate among artists. Suggestive evidence is found that superior “procedural” characteristics of artistic work, such as increased variety and on-the-job learning, contribute to the difference in job satisfaction.     

Generalised Cost Functions for Producers of Performing Arts – Allocative Inefficiencies and Scale Economies in Theatres

This paper examines the structure of the production of cultural services by using a generalised cost function and a panel data set of theatres. The main points of interest are: first, whether the production of theatrical performances is allocatively efficient, second, whether underlying production technology exhibits homotheticity with respect to output, and third, whether there exist economic gains from large scale production. The results of the analysis suggest that inputs are not combined in optimal proportions in light of prevailing market prices, that relative shares of input utilisation vary when output expands, and that there are scale economies in the production of theatrical performances.     

What Has the Visual Artist's Rights Act of 1990 Accomplished?

This paper presents an economic analysis of the Visual Artist's Rights Act of 1990 (VARA) which provides attribution and integrity rights, commonly called moral rights, for defined types of artistic works. The paper shows that these laws may actually harm artists by adding contracting and transaction costs in the art market. For most works, these costs will be trivial because collectors have a strong self-interest in preserving works in good condition. These costs are more likely to be significant, however, for works subject to destruction or alteration in the future, such as site-specific works and works installed in buildings, because purchasers will require waivers rather than risk violating the Act. The paper also examines the few cases that have been litigated under VARA. Consistent with the economic model, these cases involve large-scale works by relatively unknown artists that have been destroyed by building projects. Finally, the paper presents an empirical analysis of state moral rights laws. Nine states enacted these laws prior to VARA. These laws had no significant effect on artist earnings but a positive and significant effect on the number of artists living and working in the state.     

CULTURAL WORK AND TRANSFORMATIVE ARTS

The model of cultural work undertaken by the Amber Film and Photography Collective represents a radical challenge to the insecure and de-politicised world of cultural work that has long been the norm within the arts. Our paper, which explores the collective's diverse forms of cultural work, including paid labour, collective labour, gift labour and creative labour, argues that cultural work can be imbued with moral commitments and egalitarian ideals. The Amber collective functioned as much like a social movement organisation or a social economy enterprise as a cultural group: it was dedicated to creating alternative cultural networks and a new material foundation for cultural work. We emphasise how these shifting forms and strategies of cultural work underpinned substantial transformations within the Amber group itself.     

CREATIVITY,CAPITAL AND TACIT KNOWLEDGE

This article discusses the role of creativity, graphic design innovations and tacit knowledge within advertising agency competition processes during the first half of the twentieth century. This period witnessed the arrival of the ‘advertising creative’: the artist-designer, whose output and tacit understanding of consumer tastes became key for the competitive advantage of agencies. Adapting Bourdieu's concept of the social field within which actors create and trade various forms of capital, I show how and why William Crawford's advertising agency in London became a pioneer in promoting the social, cultural and economic role of this new group of agency workers. I argue that Crawford's became the first advertising agency that carved out a unique position within a highly competitive market by defining its visual production and organisational identity entirely through notions of creativity. This places Crawford's at the heart of the emergence of a cultural economy for which creative skills are a paramount source of value creation.     

Investment in early American art: the impact of transaction costs and no-sales on returns

Art, along with other “treasure assets,” has become a central object for investment opportunities. Investment return studies using hedonic and resale price regressions on different artistic periods and styles produce estimates of varying rates of return, predominately low rates with high standard deviations. The present study employs a new sample of American art sold at auction between 1987 and 2011—art created before 1950 by 33 artists born prior to 1900. Our study, unlike those that preceded it, considers works that are no-sales (those “bought-in” for failing to sell at auction at or above a predetermined and negotiated minimum price), in addition to full transaction costs—buyers and sellers premia on hammer prices. We conclude that investment return calculations are biased upward and may be negative when these factors are considered and that the “consumption utility” of art may be higher than previously thought. However, using a variant of the capital asset pricing model, we find that investment in early American art may still be desirable in a diversified portfolio of assets for when the price of stock assets falls, the price of art does not fall in the same proportion.     

Intellectual property and optimal copyright protection

Copyright protection, or more generally, intellectual property rights, can be regarded as a means for the stimulation of production of information goods. This paper analyses the basic problem of production and dissemination of information and the role of copyright protection as an incentive for the producers of creative works. Using a simple model, it is shown that not only a cause for limiting the extent of copyright protection does exist, but that also an argument for a minimum level of protection can be found. Even optimal copyright protection, given the restriction that production and dissemination of information goods has to be co-ordinated by a market mechanism, however, does not lead to a first-best (allocatively efficient) solution. Hence, the judgment that copyright protection is the best solution to the basic problem can be grounded only on a comparative institutional approach.Indeed, one has ample reason to despair of finding a legal tenet that governs the rights of authors and artists. There exists no legal principle by which the state is forced to grant to authors a right in their creation. They cannot claim any right thereupon. This is not to say that the state shall not award such a right. On the contrary, there is every reason to treat them like the most favoured workers, as they deliver a work that is more robust than ashlar, and bring food that does not decay...     

Growth,accessibility and the distribution of arts activity in the United States: 1980 to 1990

Using data on the location of artists by state as a proxy for the location of artistic activity, this paper shows that from 1980 to 1990 the arts grew rapidly and became more dispersed, reversing a trend toward greater concentration during the 1970s. Accessibility increased as the ratio of artists to population rose in most states. Nevertheless, enormous inter-state variation in that ratio remains. The second part of the paper examines the determinants of artist location at the state level. The equations estimated for both years prove to have a high degree of explanatory power.This paper was presented at the 9th international conference of the Association for Cultural Economics, held in Boston, May 8–11, 1996.     

The political economy of cultural spending: evidence from Italian cities

We investigate the relationship between Italian municipalities’ spending on culture in the 1990s and 2000s and a number of political variables—such as a left/right dummy, an election-year dummy and a term-limit indicator—controlling, among other things, for economic and socio-demographic characteristics of the population, the level of human capital and instruction, proxies of social capital, the extent of private financing of cultural provisions and touristic and artistic relevance. We use a panel-data regression analysis and find that, indeed, some determinants of public expenditures on culture are political. In particular, we identify an electoral cycle in which the incumbent spends less on culture in an election year. This result is robust for variations in the empirical model accounting for both the persistence and spatial interdependence of cultural expenditures by municipalities.