economics.qmd

# Economic models

A very straightforward overview of the valuation of recorded music can be found in [@pwc_valuing_2008]. It is a non-scientific and very practical consulting overview, and it is a great start. Also, do not re-invent the word, here is where we [paused](https://music.dataobservatory.eu/documents/open_music_europe/economy/report/report_music_europe_data_collection.html) the work in mid-2023.

## Music business

A reader on what is the music economy, how it is structured, how money is flowing between its parts.

-   *The music business and recording industry delivering music in the 21st century* [@hull_music_2011]; the standard description of the recorded side of the music industry.
-   *Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries. The Music Industry* [@leurdijk_statistical_music_2012]; the adoptation of the previous model for Europe.
-   *Investing in Music. How music companies discover, nurture and promote talent* [@ifpi_investing_2012]; how IP assets are financed, how those investments are recovered.

- _Správa o slovenskom hudobnom priemysle [Slovak Music Industry Report]_ [@antal_slovenskom_hudobnom_2019_en]

## Econometric methods

- We used these models in several cases, for example, in Slovakia in 2018. They maybe useful for review, but they require rather sensitive data.

## Hedonic price models

We are particularly interested in using hedonic price models in Slovakia.

## Experimental methods

- We used experimental models in Hungary for establishing the value of the rigth in restaurants and retail outlet stores.

## Discounted cash flow models

DCF models are usually very hard to use in music, because we do not have consistently the data. But by now perhaps we would have sufficient data; for this, we would need to estimate the risk of the revenue, which is an empirical economics task (i.e., the calculation of the appropriate discount rate.)

## Market comparator methods

This is the most used model in our work.

-   A Market Comparator Model for Valuing the Use of Music [@antal_market_comparator]

-   We used this model in the _Private Copying in Croatia_ [@antal_pcr_croatia_2019] report essential in the same format as we used it in Hungary and Slovakia. In Hungary we used a far more elaborate survey and we identified a lot more uses.

## Zero price (when the user does not pay)

-   *Online platforms and digital advertising* [@cma_online_platforms_advertising_2020]

## Total value or external value models

In Slovakia we developed such models, and we have developed an R package that calculates such values; this is compatible with the Live music Census methodology. This is not relevant directly for the needs of SOZA and Artisjus, but if there are researchers interested in this, we could assist them to write a separate publication, and provide the data analysis.

## Shadow prices

-   Online platforms and digital advertising [@cma_online_platforms_advertising_2020]