Was the Introduction of Napster Really the Day the Music Died?

The crash of a plane carrying rockers Buddy Holly, Richie Valens, and “The Big Bopper” in 1959 has long been referred to as “the day the music died.” But was the real deathblow to the supply of important recorded music the introduction of Napster and file-sharing technology?

“Since 1999 when Napster appeared, revenue from recorded music to the record labels has fallen from a third to almost a half depending on which country you look at,” says Professor Joel Waldfogel, the Carlson School’s Frederick R. Kappel Chair in Applied Economics.

Economic theory would dictate that if the recording industry can’t make money from the sale of recorded music, it won’t be able to afford to bring new artists and new music to market. Using a novel dataset that allowed him to quantify the amount of good music coming to market over time, Waldfogel set out to assess whether Napster had such an effect on the creation of new music.

“The kind of whacky idea that I came up with was to look at critical retrospective best-of lists,” says Waldfogel of the approach that produced the paper, “Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster,” which was presented at the National Bureau of Economic Research, Inc.’s Digitization Workshop in July.

Converting critics’ lists that reflected the best albums or songs of a 10-, 20-, or 50-year period to indices, Waldfogel was able to produce a long-run time series of the quantity of music that meets an importance threshold over time. His findings validated the musical importance of the 1960s, noted a decline in the quantity of music we cared about in the 1970s (disco, anyone?), observed a pickup in the 1990s, and then found another drop in the late-1990s.

However, much to his surprise the quantity of good new music didn’t continue to decline or even plunge after Napster’s introduction.

“Compared to the tales of woe and legitimate-sounding concerns that maybe we wouldn’t get any good new music after Napster, there’s no evidence of this at all,” says Waldfogel. “Relative to historical trends and standards, we’re at a pretty high level.”

Waldfogel speculates that the same technological changes that cut into sales revenues have made it easier to bring music to market. And while recorded music isn’t selling like it used to, artists are able to use their music as an advertisement for the other product they have—live performances.

“Even in a world where it’s harder to make money selling recorded music, I would expect us to continue to see lots of new recorded music,” he adds. Words that are music to any fan’s ears.