Chapter 4, Problem 10P

To determine

Streaming music services have changed the way we listen to music. Spotify, Pandora, Tidal and Google Play are some of more popular services. These companies offer free access to music. For a small monthly fee users can purchase premium access and listen to millions of songs on demand and free. But not all artists are fans of free streaming music. In 2016, Taylor Swift’s move to prevent Spotify from playing her new release, 1989, for free, made national headlines. When Spotify refused to restrict access to only paying customers, Swift would not allow the company to paly her music for free. Sheis not alone. Adele, Dr, Dre, Garth Books, and Coldplay have all had run-ins with free streaming services.

1. The impact of free music and video content through free music streaming services on the record companies’ producer surplus from music sales. The record companies’ incentives to produce music in future.
2. If artists are not allowed to prevent their music from free streaming services, the impact that it will have on mutually beneficial transactions in the future.

Concept Introduction:

Producer Surplus:

The difference between the price that the producer gets while selling a product and the minimum price at which the producer is willing to sell the product.