> In most cases, labels are in fact going to lose money from midlist acts.
This is almost certainly the case. The music business is the economics of superstars. see: Rosen, Sherwin. “The Economics of Superstars.” The American Economic Review 71, no. 5 (1981): 845–58.
Small personal difference translate into enormous differences in earnings. The income curve has only small area for middle incomes. Either you are below middle, or you quickly get into upper middle class or higher incomes. It's not a market failure but a predictable dynamics of this particular field.
Artists low pay is driven by two things:
First, an oversupply of talent willing to work below a living wage keeps incomes low.
Second, promotion and marketing are the primary drivers of an artist's financial outome, leading to uneven deals where labels handle the heavy lifting and deserve larger piece of the cake. Once an artist's career reaches a certain scale, their earnings can grow to outweigh their direct creative input.
This is almost certainly the case. The music business is the economics of superstars. see: Rosen, Sherwin. “The Economics of Superstars.” The American Economic Review 71, no. 5 (1981): 845–58.
Small personal difference translate into enormous differences in earnings. The income curve has only small area for middle incomes. Either you are below middle, or you quickly get into upper middle class or higher incomes. It's not a market failure but a predictable dynamics of this particular field.
Artists low pay is driven by two things:
First, an oversupply of talent willing to work below a living wage keeps incomes low.
Second, promotion and marketing are the primary drivers of an artist's financial outome, leading to uneven deals where labels handle the heavy lifting and deserve larger piece of the cake. Once an artist's career reaches a certain scale, their earnings can grow to outweigh their direct creative input.