I have a lot of respect for Paul Krugman as an economist. Or I did, until I read his latest column in today’s Times. The gist: The Internet is killing the old economy, but new business models are replacing the old ones. I think we can all agree on the first part. But the part about the new business models… where does he get that? Answer: Rolling Stone!
Rolling Stone recently published an article titled “Rock’s New Economy: Making Money When CDs Don’t Sell.” Downloads are steadily undermining record sales — but today’s rock bands, the magazine reports, are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through “publishing, touring, merchandising and licensing.”
Memo to Paul: Publishing, touring, merchandising and licensing are not new revenue streams. Artists have always made money from these sources. The question is, are they seeing increased revenues from publishing, touring and merchandising — increases large enough to offset declining music sales? There is no evidence of it.
So for Krugman, an internationally noted economist, to suggest — based on a Rolling Stone article — that new revenue streams are effectively replacing the old ones is shameful. I don’t expect Krugman to publish a scholarly treatise in his Times colum. But I wouldn’t expect him to entirely abandon his standards either, particularly when he’s writing about economics.
If Maureen Dowd had written this, I wouldn’t be so exercised. But it’s disappointing to see Krugman depart the field of professional economics entirely.
See Also: Michael Arrington on Copyright: Wrong
SAI Contributor Hank Williams is a New York-based entrepreneur. He writes Why Does Everything Suck? Exploring the tech marketplace from 10,000 feet.