Sunday, May 03, 2015

How to make a lot of money as an artist

An artist friend asked me, "How can I make a lot of money?"

"Make something people will give you money for," I said.

"It can't be that easy," my friend snorted.

"Who said it was easy?" I snorted back.

My friend is a musician, who follows his heart, without much regard for what other people want. He's an artist. Almost by definition that makes him an independent individual, unmoved by the suggestions of friends and family to follow a more lucrative career. Like many artists I have come to know he is rebellious, self-centered, stubborn, and driven by a vision other people cannot see. It's what makes his contribution potentially so valuable.

As a businessman and economist, what I find most fascinating about the profession of an artist is that she makes a career out of communicating her vision. Like an inventor, who tries to make money from an idea, artists try to make money from a perspective. And if the perspective is valuable and easy to reproduce, the supply will outstrip the demand, lowering the price towards zero, moving most of the benefit away from the artist and to the consumer. So, just as in the case of inventors in a competitive economy, the number of artists is only limited by the lower profits (poverty) the artists will tolerate. Those that want to make more money will have to find other occupations to supplement their income.

Now, just as with any other business, if one can create monopoly power, making a product so unique that it is not reproduced, and one's product is something that consumers are willing to pay for, then the sky is the limit. However, in order to be such an artist may require two compromises: (1) sharing the wealth with others who can help create monopoly power (such as distributors who control access to sales channels), and (2) producing art that consumers are willing to pay for, perhaps compromising the artist's original vision.

With the increasing role of the internet, it will be interesting to see what happens to the companies that have traditionally controlled the distribution channels. They are struggling at defining their value to consumers in the face of a plethora of talent flooding the market through internet channels such as YouTube. Will artists benefit from the more open marketplace? It's not clear. What is clearer to me is that the number of artists reaching consumers is likely to increase, swelling the ranks of "starving" artists, probably bad news for the artists, perhaps good news for the art consumer.

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