2-Apr-211 Pop Internationalism: Has A Half Century of World Music Trade Displaced Local Culture? Joel Waldfogel Carlson School University of Minnesota Introduction Globalization of popular music Does the US disproportionately dominate the world music market? How has its role changed over past 5 years? New technologies over past half century TV, radio, Internet, (MTV) other countries cultural goods more readily available Good news! But 1
2-Apr-211 The French Perspective Toubon: We must not let our souls be asphyxiated, our eyes blinded, our businesses enslaved. We want to breathe freely breathe the air that is ours, the air that has nourished the culture of the world, and that, tomorrow, is in danger of being lost to humanity... Let us mobilize for this battle of survival. And Mitterrand: Let us be on guard. If the spirit of Europe is no longer menaced by the great totalitarian machines that we have known how to resist, it may be more insidiously threatened by new masters economisme, mercantilism, the power of money, and to some extent, technology.... What is at issue is the cultural identity of nations, the right of each people to its own culture, the freedom to create and choose one's images.... A society that relinquishes to others its means of representation, is an enslaved society. But....trade is a two way street Are small (non-us) countries selling more or less over time? And it matters for policy GATT 1947, cultural exception under Uruguay Round of GATS European subsidies to audiovisual sector 26 UNESCO Convention on Cultural Diversity domestic airplay quotas (Protectionist barriers against a rare US export success story) 2
2-Apr-211 Questions Specifically, Who buys whose music? What roles do language and geography play in trade flows? What is the extent of home bias in consumption of music? And: how have all of these changed over time? As technological change has made trade more nearly frictionless? Generally, is the US disproportionate? Has it grown more so? Data Pop charts from 22 countries,,,,,, Chile,,,,, Italy,, the Netherlands, New Zealand,,,,, Switzerland, the UK, and the US 1,23,554 entries; 68,283 songs; 23,377 artists Major music markets Opportunistic sample, but try to get multiple countries for each language E.g. and, and (part) Laborious process of matching artists with nationalities 3
Trade Shares.1.2.4 2-Apr-211 Proportionality? How does each repertoire s share compare with its GDP share? E.g. Is the French share the same in and?..and is it equal to the French GDP share? Country Size and Repertoire Share of World Trade Figure 2. Music Trade Shares and GDP Shares, 23-27 US New Zealand Switzerland Netherlands United Kingdom Italy Positive relationship between size and trade share NZ,,,, UK, US disproportionate in trade Not GDP Shares.1.2.4 Notes: Each dot shows each country s average GDP share from 23-27 and the corresponding music trade share in the same period. Red line is the 45 degree line. Figure is plotted in log scale. despite widespread concern about large-country dominance of markets for cultural goods, country repertoires shares are roughly proportionate to their sizes, and the US has neither the most disproportionate share of total consumption nor trade Granted, the US is big 4
.1.2.3.4.5.1.15.1.2.3.1.2.3.1.2.3.4.5.1.1.2.3.1.2.3.4.1.2.3.4.5.1.15.2.25.1.2.3.4.2.4.6.8 2-Apr-211 Home Bias? Figure 3. Domestic Music Shares and GDP Shares, 23-27.1.2.4.7 1 United Kingdom Italy Netherlands Chile New Zealand Switzerland US Lots of home bias. Not unique to cultural context GDP Shares.1.2.4 Notes: Each dot shows each country s average GDP share from 23-27 and the corresponding consumption of domestic music share in the same period. Red line is the 45 degree line. Figure is plotted in log scale. Who Trades with Whom? Figure 4. Repertoire Shares of Imports, 23-27 Repertoire Shares of Imports New Zealand United Kingdom Port ugal United States Italy Netherlands Switzerland Chile Netherlands Switzerland United KingdomItaly United States Chile New Zealand United States Switzerland Netherlands United New Kingdom Zealand Italy Chile Switzerland Netherlands United KingdomItaly Chile United States New Zealand Italy Netherlands Switzerland Netherlands United States United Kingdom New Zealand Italy Chile Switzerland Netherlands United Kingdom Chile New United Zealand States Italy United Kingdom United Switzerland States New Netherlands Zealand Italy Chile United Kingdom Switzerland New Zealand United Netherlands States Italy Chile United Kingdom United States Chile Netherlands United Switzerland Kingdom New Zealand United States Italy Graphs by nationality United Kingdom New Zealand Netherlands Switzerland Chile Italy Port ugal United States Italy Netherlands United States Switzerland New Zealand Chile United Kingdom New Zealand United Kingdom Italy Netherlands Switzerland Chile United States Proximity and language. Not unlike physical goods. 5
shares.2.4.6.8 2-Apr-211 A Half Century of Trade How have repertoires market shares evolved over time? Repertoire Shares of Trade Figure 7. Music Export Shares by Country, 196-27 UK was absolutely largest, now US UK US 196 197 198 199 2 21 year Notes: Gray lines show data for all countries that have small market shares. Export shares calculated according to equation (3) in the text, but omitting consumption of domestic music. 6
shares.4.5.6.7.8 1 2 4 6 2-Apr-211 Repertoire Shares of Trade Rel to GDP Figure 8. Music Export Shares Divided by GDP Shares by Country, 196-27 UK US smaller relative to GDP because of home bias in consumption (a lot of world consumption of US music occurs at home) US 196 197 198 199 2 21 year Notes: Gray lines show data for all countries that have small normalized market shares. Export shares calculated according to equation (3) in the text (but omitting consumption of domestic music), averaged over three years, and then divided by average GDP shares over the same three years. Horizontal line of 1 represents proportionality in music export shares. Home Bias over Time Figure 9. Overall Domestic Shares, 196-27 Rebound since mid-198s 196 197 198 199 2 21 year Notes: Overall domestic shares calculated as the total consumption of domestic music in all countries in a given year, divided by the total consumption of music in that year. 7
1 15 2 5 2-Apr-211 Why is Home Bias Rising? MTV Monolithic? the Internet Complement or substitute for agglomeration? Quotas MTV Splinters Figure 12. Local MTV Evolution NZ,AU SW,NO,DE,FI,,, Italy, UK United States Netherlands 198 1985 199 1995 2 25 21 year Notes: Each dot shows the first year of local MTV activities for the assigned country. Source: Wikipedia. 8
2 4 6 8.2.4.6.2.4.6 2-Apr-211 Range of Internet Penetration in Sample Countries Figure 13. Internet Penetration, 199-28 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 Notes: Graph shows box plots by year of internet users per 1 people for the countries in our sample. Figure 14. Domestic Shares and Radio Quotas New Zealand 196 197 198 199 2 21 196 197 198 199 2 21 year Domestic Share Domestic Content on Radio Graphs by country Notes: The green line in each panel shows the percentage of consumption of domestic music in the respective country. Red lines indicate the minimum percentage of radio air play devoted to domestic music according to each country s legislation. 9
2-Apr-211 Home Market Share All three factors MTV arrival Internet domestic airplay quotas are positively related to the home share Conclusions Repertoire shares roughly proportional to GDP, but Home bias. And geography and language matter, as in physical goods Despite technological change promoting frictionless trade Effects of distance and language constant, And home bias increasing Technological demons not exacerbating largecountry dominance (movie comparison interesting) 1
.2.4.6.8 2-Apr-211 Additional slides Globalization of movies vs music Country Size and World Consumption Share Movie Consumption Shares and GDP Shares, 22-27 United States United Kingdom New Zealand Italy Hong Kong Russia India Thailand Mexico Czech Republic Netherlands Poland Greece Philippines Turkey Romania Egypt Positive slope US big Iceland Lebanon Chile Serbia Taiwan Estonia Lithuania Hungary South Africa Singapore Peru Ukraine Uruguay Bulgaria Malaysia Latvia GDP Share Movie Share GDP Share.1.2.3 11
Domestic Shares.2.4.6.8.2.4.6.8 2-Apr-211 Country Size and World Trade Share Movie Trade Shares and GDP Shares, 22-27 United States Iceland Estonia Serbia Uruguay Latvia New Zealand Movie Share Hong Kong Czech Republic Italy Romania Thailand Mexico Russia Turkey Netherlands Taiwan Greece Poland Chile Hungary South Africa Singapore Egypt Peru Malaysia Ukraine GDP Share GDP Share United Kingdom India.1.2.3 Positive slope US big, as are UK,, NZ Home Bias in Movies Domestic Share and GDP Egypt India United States Lebanon Lithuania Hong Kong Thailand Czech Republic Turkey Russia Philippines Italy Poland United Kingdom Netherlands Greece Chile New Zealand Mexico Romania Bulgaria Ukraine Domestic Shares GDP Shares GDP Shares.1.2.3 12
1 2 3 ratio 1 2 3 1 2 3.5.1.15.1.2.3.4.5.2.4.6.8.5.1.15.2.4.6.1.2.3.4.2.4.6.5.1.15.5.1.15 2-Apr-211 Movie Trade Patterns Uruguay Mexico Iceland Lithuania United Kingdom Latvia Poland New Zealand Bolivia Venezuela Italy Czech Republic Netherlands Turkey Singapore Peru Greece Chile Hong Russia Taiwan Kong United South Korea Ukraine States South Thailand Slovenia Africa Slovakia Romania Serbia Philippines Malaysia Nigeria Lebanon Hungary India Estonia East Egypt Croatia Africa Bulgaria China United Lebanon States Czech Republic Russia Ukraine Uruguay Slovakia Lithuania Serbia Italy Bulgaria Poland Latvia Turkey Romania Greece South Korea New Zealand Chile Hungary Croatia Netherlands Venezuela United East Kingdom Thailand Africa Slovenia Peru Hong Taiwan Nigeria Kong Mexico Bolivia Iceland Philippines China South Malaysia Africa Estonia Egypt Singapore India United States Greece Turkey Russia Slovakia Thailand Netherlands Bulgaria United Kingdom Italy Poland Czech Republic New Zealand Hong Mexico Kong Serbia Chile Romania South Croatia Korea Peru Egypt Lebanon China Venezuela Ukraine Uruguay Taiwan Malaysia Bolivia Iceland Philippines Lithuania Singapore Hungary Slovenia South India Nigeria Africa Latvia East Estonia Africa Italy Turkey Slovakia Uruguay Slovenia Latvia Netherlands Greece Lebanon Russia Singapore Ukraine Bulgaria Serbia Lithuania Romania Taiwan Hungary Chile United Kingdom Mexico Czech Republic Poland Venezuela Thailand Bolivia New Philippines Zealand South Hong Korea Kong United Egypt South States Africa Nigeria Peru Malaysia Italy Iceland India East Estonia Croatia Africa China Hong Turkey Kong South Singapore Korea Thailand Taiwan Malaysia China United Bolivia Venezuela States Latvia Croatia Chile Peru Egypt Uruguay Lithuania Estonia South Philippines Africa Russia Romania Mexico Slovakia United Greece Kingdom Italy Czech Republic Slovenia Lebanon Netherlands Bulgaria New Poland Zealand Serbia Hungary India Ukraine Nigeria Iceland East Africa Serbia Croatia Greece Latvia Italy United Mexico States Slovenia Bolivia Turkey Poland Uruguay Bulgaria Lithuania Netherlands Peru Hungary Czech Republic Chile Venezuela New Hong Zealand Singapore Kong United Kingdom Russia Romania Taiwan Lebanon South Slovakia Philippines Korea Thailand Ukraine China South Nigeria Africa Malaysia Iceland India Estonia East Egypt Africa United Kingdom United States New Zealand South Netherlands Korea Chile Mexico Egypt Hong Peru Kong Greece Russia Bulgaria Italy United Kingdom Taiwan Hungary Venezuela United Uruguay Ukraine States Thailand Turkey South Slovenia Africa Singapore Slovakia Romania Serbia Philippines Poland Malaysia Nigeria Lithuania Lebanon Latvia Iceland India East Estonia Czech Republic Africa Croatia China Bolivia United States Hungary India Slovenia Czech Republic Iceland New Nigeria Zealand Serbia Estonia Poland South Slovakia Africa Netherlands East Lebanon Africa Greece Thailand China Romania South Bulgaria Korea Ukraine Croatia Latvia Russia Hong Kong Italy Philippines Chile Lithuania Egypt Malaysia Turkey Taiwan Singapore Uruguay Bolivia Mexico Peru United Venezuela Kingdom United Venezuela Philippines Kingdom Bolivia Peru Mexico Egypt East Africa Romania Chile South Nigeria Africa Iceland Croatia Estonia Uruguay Bulgaria Hungary South Russia New Zealand Korea Greece Lithuania Latvia Italy Thailand Serbia Slovenia Taiwan Lebanon Poland Singapore Netherlands Turkey Czech Republic Slovakia India Hong Malaysia Kong Ukraine United China States Graphs by from US rep popular everywhere UK and export OK too Movie Repertoire Consumption Shares Rel to GDP Movie Consumption rel to GDP DE ES FR IT JP NL 198 199 2 21 UK US 198 199 2 21198 199 2 21 year Graphs by from 13
1 2 3 4 ratio 1 2 3 4 1 2 3 4 2-Apr-211 Movie Repertoire Trade Shares Rel to GDP Trade Shares rel to GDP DE ES FR IT JP NL 198 199 2 21 UK US 198 199 2 21198 199 2 21 year Graphs by from Movies vs Music Movies: US more dominant than in music Quality produced with fixed costs Endogenous fixed costs much larger in movies 14