Rockonomics is a backstage tour of what the music industry can teach us about economics and life.  The book is an expansion on a speech the author gave at the rock and roll hall of fame.  There are dozens of interviews included with musicians and executives which allowed for some great insight on what goes on behind the scenes with music and when it comes to money - which is something I don't generally think about.  "To truly understand and appreciate music, you need to understand economics" (These were my worst courses in college, so, yikes!)  Something I found interesting is that if a song has a collaboration with a big star - they are usually within the first 30 seconds of the song because you are only paid if your song is played for over 30 seconds.  So if a fan is expecting to hear Justin Bieber, he better show up in 30 seconds or they will turn the song off and you get no  streaming credit!   I also found it interesting that most income comes from touring and merchandising and that some rappers release their "Mixtapes" for free and recoup all costs from touring and merchandising alone.  And while a great business sense is helpful - sometimes it is just LUCK!  Elton John got Bernie's envelope from a stacks and stacks of envelopes that were at the office.  Meant to be, I guess! Could you imagine a world without Elton and Bernie's songs? I can't! 

I received a free e-copy of this book in order to write this review, I was not otherwise compensated.

The author's painstaking research and attention to detail is obvious in the writing of this book. There were many facts that I only discovered after reading this!

ROCKONOMICS by Alan B. Krueger will be of special interest to those who are curious about the music business. A former chairman of the Council of Economic Advisers, Krueger provides "A Backstage Tour of What the Music Industry Can Teach Us about Economics and Life." In chapters with titles like "The Supply of Musicians," "The Economics of Superstars," or "Streaming is Changing Everything," he looks at this evolving industry from a variety of perspectives. In terms of economics, he notes its size (employing about 0.2% of the workforce), income inequality that is more severe than the larger society, and implications of copyright laws and royalty arrangements. He also writes about the increased reliance on performance revenue as well as alternative ticketing options. Krueger provides charts and graphs to illustrate his points, plus extensive notes and an index. Student researchers will definitely find information and value here, including from the last chapter on "Music and Well-Being" in which Krueger quotes Oliver Sacks and others, noting "part of the reason for the durable power of music appears to be that listening to music engages many parts of the brain, triggering connections and creating associations." ROCKONOMICS offers a unique reading experience and received a starred review from Booklist.

Popular economics books like Freakonomics tackle interesting sides of unglamorous issues (e.g. why are drug dealers poor? or are sumo matches fixed?), examine the evidence from a skeptical perspective, and reveal fascinating, nonobvious answers.
Standard textbooks that students only read to pass courses--and often not even then--start with didactic principles and make up unrealistic examples to demonstrate what the author believed all along, often with clunky attempts to jazz them up with popular culture examples.
This book falls squarely into the latter camp. The author is not interested in taking an unbiased look at the music industry to learn lessons, he's interested in using it as camouflage to teach his preset views. Like most authors who take this road, he boasts about how much research he did, but hours of interviews do not always equal hours of listening, much less actual understanding of the topic. The writing style is all textbook.
If you're looking for an entertaining book that will teach you some fascinating non-obvious stuff about either the music industry or economics, look elsewhere. This book is not much fun to read. It does have quite a bit of technical detail about the music business, and it does teach some basic microeconomics theory.
About equal energy is devoted to Obama-era Democratic political economics. This was always muddled as it tried to incorporate progressive ideas on top of center-right Clintonian policies, and it's now irrelevant as both parties have moved solidly away from it. However if you are nostalgic for it you might enjoy this lonely voice of praise.

Princeton economics professor Alan Krueger examines the music industry, hoping to demonstrate the study of economics through the prism of popular music, and hoping to draw parallels to the economy at large. The result is more of a book about the music business than about economics, but I wager that most readers are more interested in the business than in economics, so consider that a success.

I may be an exception to the rule, having come close to getting a doctorate in economics myself -- Will Baumol, who is cited in this book several times, was supposed to be my committee chair until I decided not to proceed with my dissertation. But that was forty years ago, an interval in which my career had nothing whatsoever to do with economics (or music).

Still, I was hoping to see the application of economic theory to music -- I pictured a model of monopolistic competition where product differentiation in the form of signing and promoting unique artists and genres allowed suppliers to force consumers onto the inelastic portion of their demand curves, given the high utility consumers place on live and recorded music once they become fans of particular artists and styles.

If that last paragraph made your eyes and minds glaze over, perhaps that explains why Krueger made the wise choice not to go there -- except that he does talk about how artists are positioned as unique, as imperfect substitutes for each other, a key element of product differentiation.

Unfortunately, despite devoting an entire chapter to the gratification music gives us, Krueger doesn't place that within the context of consumer demand -- the concept of utility is in fact what underlies demand, even more so in the context of a experiential rather than tangible good like music. The various factors that shape utility in music makes demand potentially inelastic (inelastic demand allows suppliers to charge higher prices without dampening demand all that much) -- to me, that's a big part of how technology has affected pricing for live and recorded music.

Much is made of the music business being superstar driven, and that's a shame, because it really isn't. I live in New York, where there are three arenas in the area and half a dozen large concert halls, so there's maybe an average of one superstar event a day plus one or two next-level events. And then there are dozens of small theaters and hundreds of clubs that operate Every. Single. Night. Of the year.

In terms of the number of people performing, watching, and working, and the amount of business activity generated if you include food and drink, transportation, etc., I bet the superstar and next-level events are a drop in the bucket. In Nashville, performers have to pay clubs to play. People go to Chicago and New Orleans as well as Nashville and Brooklyn just to go club hopping. LA, Seattle, Boston, San Francisco, Atlanta, Philly, Portland -- just go down the list, the everyday music scene swamps the superstar events in sheer magnitude.

Similarly, one hundred miles west of NYC, in Bethlehem PA, there is probably an average of one star event a month (if that), but there is a vibrant music scene at lower levels that translates into dozens of events each day within an easily drive-able radius. As an amateur musician who spends time in that area, even the bottom-most-level open-mic business that allows me to pretend to be a musician is a bigger deal than superstar concerts.

The City Winery model is spreading all over the country. PACs are everywhere. Old theaters in relatively small cities and towns are being renovated into community theaters that mix concerts with other cultural events. There are so many of these venues in my area that I can't keep track of them all. Meanwhile, I almost never go to an arena concert, and never ever go to a stadium, not with all the other choices I have -- not worth the hassle or cost. This is a golden age for concert-goers, and that has nothing at all to do with superstar performers.

Krueger discusses literally none of this. He devotes just about a whole chapter to music in China, but says absolutely nothing about the grass-roots live music scene that is ubiquitous in America, still the largest market in the world. Put together a Leontief input-output model (hardcore economics again -- I got to study and work a little with Nobel winner Leontief back in the day) of the club scene, showing how music radiates out into various areas of the economy via tourism, food service, transportation, fashion, etc., and this is a huge, possibly dominant segment of the industry that gets no attention in this book.

I have one other problem with the superstar model. My older daughter was in youth theater, went to college for drama, and my younger daughter was an elite youth soccer player, now playing in college. Their dreams were winning Oscars and Olympic gold. But the more realistic goal was easier to envision -- all their teachers, coaches, trainers, choreographers, etc., their dream was Oscar and gold too, but they found productive lives within the economy in their areas of greatest passion at other levels. There is more to the music industry than U2, Springsteen, and Taylor Swift. So much more that the superstar model actually fails, except at the tabloid level where a high school drama teacher and club soccer coach aren't going to compete with Bruno Mars.

Nevertheless, there is much to like about Rockonomics. I especially like the sidebar interviews with industry players. And I like that much of the analysis was backed up by empirical evidence and not just anecdotal evidence -- although the anecdotes are a lot fun anyway. There is a high probability that my critique is unique to me -- and yet, none of my critiques diminish what is here, I only wish there was more. Hopefully there are economists out there ready to build on what Krueger has started.