Apocalypse Now: The Superstar Economy

The ongoing collapse of the music industry has led to the extinction of many bands, solo artists, and music styles, primarily due to the shift towards free or near-free music. The devaluation of music recordings has resulted in entire generations of listeners who have never paid for music and will continue to resist any requirements to pay for it. This degradation of the music industry has led to the disappearance of bands on their second or third record, unable to evolve alongside industry parameters.

The decline in recording revenues has dismantled the label system, once the most reliable form of artist financing. The music industry failed to create its own platforms to distribute music or partner with others to harness the power to create antifragile forward-looking lines of revenue. Instead, the industry blamed everyone but themselves for their problems, while streaming services like iTunes and Spotify have given rise to another hardware-based, proprietary, walled-garden, non-music-centric, de-facto monopoly.

Web 2.0’s exaggerated perceptions of the evils of the old models of intellectual property have focused on controlling distribution, scale, and domination, and achieving hit-driven, repeatable mass-market success. Audiences have been a “captive audience,” and for many, sharing files is an act of civil disobedience that puts them in the company of Gandhi and Martin Luther King.

The dinosaurs of the old order were given fair notice of the digital revolution to come, but they couldn’t adapt due to their own stubbornness, rigidity, or stupidity. However, blaming them for their fate is not constructive. The damage to our cultural capital from the ongoing collapse of the music industry is hard to overstate. It has led to the extinction of many artists, and the industry’s failures have contributed to the paralysis of the United States in the face of serious challenges at home and abroad.


Jaron Lanier made the case that we had a baseline in the form of the musical middle class that was being put out of business by the net.

We ought to at least have found support in the new economy for them. Could 26,000 musicians each find 1,000 true fans? Or could 130,000 each find between 200 and 600 true fans? Furthermore, how long would be too long to wait for this to come about? Thirty years? Three hundred years? Was there anything wrong with enduring a few lost generations of musicians while we wait for the new solution to emerge?

Jaron Lanier

He produced the answer as follows; One would expect is an S curve: there would be only a small number of early adaptors, but a noticeable trend of increase in their numbers. It was common on the net to see incredibly fast adoption of new behaviors — only a few pioneer bloggers for a little while , then, suddenly, millions of them — . The same could happen for musicians.

So twenty plus years after the widespread adoption of music file sharing, how many examples of musicians living by new rules should we expect to find? It would be nice if there were 3,000 by now. Then maybe in a few years there would be 30,000. Then the S curve would manifest in full, and there would be 300,000 thundering onto the scene. There must be tens of thousands already!


we always heard that more opportunities will be created than destroyed. Isn’t twenty plus years long enough to wait before we take a more scientific approach? Are we building the information highway for people or who exactly for? If it’s for people, someone is asleep at the wheel. Something like “We may not know where we’re going anymore, but we’re going to get there a whole lot faster.

Consider Mp3s. A purchase of an Mp3 is not as substantive for the buyer as was a Vinyl purchase in physicality. An Mp3 buyer is no longer a first-class citizen in a marketplace.

When you buy a Vinyl, you can resell it at will, or continue to enjoy it no matter where you decide to buy other books. It might become a collectible book and go up in value, so you might make a profit on your original purchase.

Every purchase of an old-fashioned vinyl opens an opportunity to earn money by enhancing provenance. You can get the author to sign it, to make it more meaningful to you, and to increase its value.

With an Mp3, however, you are not a first-class commercial citizen. Instead, you have only purchased tenuous rights within someone else’s company store. You cannot resell, nor can you do anything else to treat your purchase as an investment. Your decision space is reduced. If you want to use a different reading device, or connect over a different cloud, you will in most cases lose access to the book you “purchased.” It wasn’t really a purchase, but a contract entered into, even though neither you nor anyone else ever reads such contracts.


A decision was made to prevent or inhibit the negative consequences at the financial and economic layer by actually spending resources, or burning resources at the cultural level and occupying all available niches destroying the available ecosystems with all manner of tools more reminiscent of mining or oil extraction that have devalued music in a more pernicious way than the problems of hyper-supply and inter-industry jockeying.

The environmental impact of mining includes erosion, formation of sinkholes, loss of biodiversity, and contamination of soil, groundwater, and surface water by chemicals from mining processes. Besides creating environmental damage, the contamination resulting from leakage of chemicals also affects the health of the local population.

Art/discovery stories are subordinate to celebrity news at a systemic level. Industry metrics (chart position and concert ticket sales) becomes a staple of music “news.” In the age of measured clicks the always-on focus grouping has institutionalized the echo chamber stultifying and discouraging meaningful engagement with music.

As of today 10% of artist take 99% of streaming or 1% recent of artist takes 77% of market

The superstar economy is a term used to describe the phenomenon where a small group of high-performing individuals or companies earn a disproportionate share of the rewards in a given market or industry. The term “superstar” refers to those individuals or companies who have achieved an exceptional level of success and fame, often due to their unique skills or talents, network effects, or a combination of both.

The superstar economy is often associated with industries such as entertainment, sports, technology, and finance, where the top performers can earn salaries or profits that are orders of magnitude higher than the average worker or company. For example, in the music industry, a few top-selling artists can earn millions of dollars in revenue, while the majority of musicians struggle to make a living.

The superstar economy is driven by several factors, including increasing globalization, technological advancements, and changing consumer preferences. In the digital age, it’s easier than ever for superstars to reach a global audience and build a dedicated fanbase. Additionally, network effects can reinforce the superstar’s dominance, as their success can attract more followers or customers, further cementing their position as the top performer.

However, the superstar economy can have a number of negative consequences, particularly when it comes to income inequality and access to opportunities. Some of the key negative consequences of the superstar economy include:

  1. Concentration of wealth: The concentration of rewards in the hands of a few top performers can lead to extreme wealth inequality. In industries where the superstar effect is most pronounced, such as sports, entertainment, and technology, a small group of individuals or companies can earn a disproportionate share of the profits, leaving the rest of the industry struggling to make ends meet.
  2. Lack of diversity: The superstar economy can also create a lack of diversity, as new entrants may struggle to gain traction in the face of established superstars. This can lead to a homogenization of the industry, with a limited number of voices and perspectives being represented.
  3. Reduced innovation: The concentration of rewards can also reduce innovation, as new ideas and products may struggle to gain a foothold in the market. This can be particularly problematic in industries that are dominated by a few large players, as these players may be more focused on maintaining their dominance than on innovating.
  4. Increased risk: The superstar economy can also increase risk for those who do not achieve superstar status. For example, in the sports industry, a player who does not achieve superstar status may struggle to earn a living, despite having the same skills and talents as a superstar player. This can make it difficult for individuals to plan for their futures, and can increase the risk of financial instability.
  5. Reduced social mobility: Finally, the superstar economy can reduce social mobility, as those who are born into less affluent backgrounds may struggle to access the same opportunities as those who come from more affluent backgrounds. This can perpetuate existing inequalities, and make it difficult for individuals to move up the economic ladder.

Overall, while the superstar economy can provide opportunities for exceptional performers to achieve great success, it can also create significant challenges for those who do not achieve superstar status, leading to inequality, reduced innovation, and increased risk.


The clamor for online attention only turns into money for a token minority of ordinary people, but there is another new, tiny class of people who always benefit. Those who keep the new ledgers, the giant computing services that model you, spy on you, and predict your actions, turn your life activities into the greatest fortunes in history. Those are concrete fortunes made of money.

The largest streaming platform in the world, Google-owned YouTube, doesn’t think that music devaluation is even possible. “It’s amazing how often people invoke that word ‘devalue’ as if it means something,” Google executive Tim Quirk said in 2014. “It doesn’t. You know why? Because you can’t devalue music. It’s impossible. Songs are not worth exactly 99 cents and albums are not worth precisely $9.99.”

Worsening the situation is a circular ‘blame game’ between streaming giants and labels, with artists ultimately shorted. Spotify says they pay the labels, though this is often with huge, multi-million dollar advances and/or equity positions attached. But labels frequently don’t pay their artists, either for legitimate (ie, the artist is unrecouped) or illegitimate (ie, they’re screwing an artist) reasons.

The concept of the long tail seemed like a useful way of understanding how consumers interact with content in digital contexts, and for a while looked like the roadmap for an exciting era of digital content. In fact digital music services have actually intensified the Superstar concentration, not lessened it . The top 1% account for 75% of CD revenues but 79% of subscription revenue. This counter intuitive trend is driven by two key factors: a) smaller amount of ‘front end’ display for digital services — especially on mobile devices — and b) by consumers being overwhelmed by a Tyranny of Choice in which excessive choice actual hinders discovery.

The long tail does not increase sales, but it does create competition and squeezes prices. Unless artists become a large aggregator of other artists’ works, the long tail offers no path out of minuscule sales.

Not my problem, you say? You could derive value from ubiquity. The solution wasn’t to somehow try to become obscure, to get your song off the (digital) radio. The solution was to change your business. You used to sell plastic and vinyl. Now, you could sell interactivity and souvenirs.” Interactivity couldn’t be copied. Don’t try to sell what was abundant — sell what is scarce.

But after ten years of seeing many, many people try, I fear that it’s just not working. We are all starving because of our failed digital idealism.

Often we talk about mining, oil extraction and fraking like the most damaging activities relating to the environment.


There’s now a downward technological progression, with vinyl only slightly breaking the chain. With every subsequent format, monetization deteriorates: streaming pays less than downloads; downloads paid less than CDs

In fact, former member of Cracker and current artist activist David Lowery feels that artists are worse off now than they were in the analog era. And, he points to lower payments, less control, a shift in revenue towards tech companies, and less secure copyright protections to prove his case.

Most artists are overwhelmed with tasks that go far beyond making music. That includes everything from Tweeting fans, updating Facebook pages, managing metadata, uploading content, interpreting data, managing Kickstarter campaigns, figuring out online sales strategies, and fixing broken-down vans.

Paid downloads are plunging, with massive declines surfacing this year. That is bad news for artists and labels, given that the payouts on downloads are far higher than streaming (thanks to an upfront payment and more predictable revenue cut.


Songwriters are often paid pennies for successful tracks, even top-charting songs on major streaming and internet radio platforms make just $5,679 for 178 million streams. Lower royalties are killing an entire generation of writers: Nashville has lost more than 80 percent of its songwriters since 2000.


Touring is fun, but it can also be extremely demanding and exhausting, especially when its the core revenue generator. Many artists are experiencing difficulties making a sustainable living out of touring, merchandising, or other non-recording activities like ‘experiences’

If you used to make all of your money selling music but now they have to tour the crucial difference there is if you’re making your money selling your your intellectual property well then then that is money that you can continue to make even when you stop working whereas if you were making your money touring you know that there’s a linear relationship between you know every gig and every dollar and once you stop touring you stop making money and that’s that looks very different in your old age as a rock star yeah

Of course if you’re young what you think about is it’s in my interest to not have to pay for this file oh you know right but then you will not stay young forever no matter what weird rhetoric comes out of Google spin-offs you know you will also grow old you will also have a biological body and you will have needs and you will not always have perfect days and this whole idea of intellectual property kind of like a lot of things in our society it you can think of it as something that only benefits elites but actually it was fought for by unions trying to support people who are not elites at all the musicians union battled long and hard to get these rights to create dignity for people who produce information in their lives and to have it lost by people who thought they were doing the right thing is just one of the great tragedies of our era.

Older, arena-filling artists are starting to die. And Many others are touring just to pay the bills, including medical bills. That includes Dick Dale, who remains on the road despite his advanced age to pay for treatment for rectal cancer, renal failure, and massive vertebrae damage.

When this music wants to be free things started happening we just started having weekly fundraisers for people like famous musicians who’d gotten sick in old age and had like no support me more and it was just so tragic recently John Perry Barlow passed away and he had been a songwriter for the Grateful Dead one of the most successful bands which had actually pioneered a lot of this idea by encouraging tapers at their concerts from a very pure feeling from a very generous feeling but then you know at the end even though he’d penned you know these songs and these huge selling records he just basically didn’t have income.

It’s like what I call it a singing for your supper for every single meal you never get to build up any life you know you can’t build up any reserve so that you can have a sick day or grow old or have a kid who needs to go to college you know it’s it’s a everybody goes into this geekycon a you’re basically this disposable element and somebody else’s fortune and that’s what that’s what making music free actually did.

Live Music

A large percentage of live music fans are frustrated with high ticket prices at concerts, not to mention wildly overpriced, in-venue items like beer. And, the secondary ticketing market is often fed before the actual market, thanks to bots, aggressive scalpers, or the artists and ticketing providers themselves.

All of which means that fans now regard live concerts as a one-off, infrequent ‘event,’ instead of a regular outing. In fact, the average consumer goes to just 1.5 shows a year (per Live Nation Entertainment). Meanwhile, service fees continue to outrage fans, even though artist guarantees and advances are often a culprit (then again, Stubhub recently found that ‘all in pricing’ led to fewer sales.)

Ric Amurrio

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