The music business, which has become something of a canary in the coal mine for worried media conglomerates, has been buffeted by value-of-product clashes for years. The entire record company economic model has crumbled after young music consumers decided, almost overnight, that they preferred sharing downloads on the Internet to buying CDs full of songs they didn't want.
Radiohead released its latest album only on the Internet, allowing fans to decide how much they wanted to pay for it. In a sign of just how little consensus there is today about the value of entertainment, a big chunk of fans downloaded the songs for free while, in the U.S., 40% of the fans paid an average of $8 for it. Even the band's own fans had very different ideas of how much the music was worth.
The concert business is especially full of value-inspired tumult. The top ticket to see Miley Cyrus (star of Disney's "Hannah Montana") this fall had a face value of $63, but a donnybrook broke out when parents discovered that most of the tickets were in the hands of scalpers selling them for up to $3,000. Older fans have been swamping message boards with complaints about sky-high ticket prices for everyone from Neil Young to Eric Clapton and Steve Winwood, whose upcoming tour tickets are going for $250.
No one can agree on a fair price for a concert ticket because market forces have upended the entire price structure. Thanks to the Internet, scalpers are making mass ticket buys through automated computer programs. This day-trader-style speculation has put pop artists, who worry about their images just as much as movie stars do, in a public-relations conundrum. If you keep fans happy with low ticket prices, you empower ticket scalpers, who make millions off your drawing power. If you raise prices to take the air out of the scalper's secondary market, your fans trash you as greedy.
The booming art market has been in a tizzy in recent weeks after a Hugh Grant-owned Andy Warhol portrait of Elizabeth Taylor, expected to sell for as much as $35 million, barely went for $23 million, inspiring commentators to fret about a market collapse. It turns out Grant bought the painting six years ago for $3.6 million, so while all those art insiders were wringing their hands, I was thinking about calling Hugh for tips. But in terms of value, everyone saw the sale in a different light.
