There is an interesting story doing the rounds today that the boy band One Direction, who came third a couple of years ago on the UK version of the X Factor TV show, have made £100 million between them in two years. Here is the NMEs take on the story. The combination of music with merchandising and live performances seems to be the source of the revenues. With the record company, which is apparently owned by Simon Cowell, said to have generated about double this amount. Although there does seem to be a bit of a lack of clarity about the boy bands money and whether this was their pay or the revenue that is yet to be spread across some of the costs. But it would seem that given the bands apparent success these sums of money seem feasible.
A coupe of things struck me about this story. First, it is interesting how much attention this story has generated across media sources (it was on breakfast TV this morning for example). This shows how the music industry has fallen, with it now becoming newsworthy that pop stars are making any serious money. It suggests that the general perception is that artists are not able to extract much value today. Of course, it is the case that only very few megastars make this kind of money. But it is hard to imagine a story like this getting very much attention historically. It seemed obvious in the past that popstars were making serious money, especially globally famous ones. So these stories would have been no great surprise and probably wouldn’t have circulated back then.
Second, it shows that the broadcast model still works. This is where mainstream and centralised media outlets broadcast from the few to the many. We hear a lot now about the fragmentation of culture with music downloading and streaming and the like. Here we have an example of how a mainstream TV show brought the band to mass public attention and how a record company, and it’s marketing departments, took advantage of this to generate large revenues. So, the culture industry still works in some cases and is still able to shape cultural interests and to create value. This example demonstrates how new business models are being developed to create value and to respond to changing forms of cultural consumption.