measuring industry concentration, diversity, and innovation in popular music

7/28/2019 Measuring Industry Concentration, Diversity, And Innovation in Popular Music

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Measuring Industry Concentration, Diversity, and Innovation in Popular MusicAuthor(s): Richard A. Peterson and David G. BergerReviewed work(s):Source: American Sociological Review, Vol. 61, No. 1 (Feb., 1996), pp. 175-178Published by: American Sociological AssociationStable URL: http://www.jstor.org/stable/2096413 .

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COMMENTS AND REPLIES 175REPLY TO ALEXANDER

MEASURING INDUSTRYCONCENTRATION, DIVERSITY,AND INNOVATION INPOPULAR MUSIC*RichardA. PetersonVanderbiltUniversity

David G. BergerTempleUniversityXX.,Fe are delighted to have this opportu-VY nity to reflect on some important is-sues raised by researchers concerning ourASR article "Cycles in Symbol Production:The Case of Popular Music" (Peterson andBerger 1975). Contraryto the thinking thenprevalent in economics, that innovation ismost likely in oligopolistic industries(Schumpeter1950), we found that the greaterthe competition in the popular music indus-try in a giyen year, the greater the innovationin the music. Analyses by Alexander (1996,henceforwardAlexander) andotherresearch-ers promptus to comment on the measure ofconcentration/competition, the measure ofmusical diversity, the difference between di-versity and innovation, and the likely rangeof the positive relationshipbetween industrycompetition and productinnovation.MEASURINGCONCENTRATIONTo measure the degree of control of the mu-sic industryheld by a few firms we used theconventional four-firm concentration ratio,which gives the proportion of the marketcontrolled by the top four firms. The concen-tration ratios depicted in Alexander's Figure1 clearly show the over-time dynamic weprojected in 1975. Studies of concentrationin the music field continue to use either thismeasure, or a more sophisticated derivative

(Carroll 1985) that measures the averagemarketshare of all firms (Rothenbuhler andDimmick 1982; Burnett and Weber 1989;Burnett 1990; Dowd 1992; Lopes 1992;Schulze 1994; Christianen 1995; Alexander1996).These ratios are accurate measures of theconcentrationof musical productownership,but, as we and others show, they are nolonger good measures of the concentrationofcreative control (Lopes 1992; Anand andPeterson 1995; Dowd 1995). This is becausethe majorfirms, like Time/Warner,now haveautonomous competing divisions (Time/Warnercurrentlyhas three), which, in turn,release popular music on numerous labels(Time/ Warnercurrently has 62).1 Therefore,a more accurate index of creative controlshould be based not on the numberof finan-cially independent corporations but on thenumber of creatively independent divisionsor labels that successfully compete in themarket.MUSICAL DIVERSITYLike Dowd (1992, 1995), Alexander usesmusical characteristicsof hit songs to mea-sure diversity.Unlike Dowd, however,Alex-andertakes his five measuresfrom sheet mu-sic ratherthan from the hit record itself, ar-guing that sheet music is a blueprint forwhat is recorded. This may be an adequateassumption for the era up to 1955 (whichAlexander does not study). At that time,bands generally recorded songs, readingfrom printed music charts. In the rock era,however, pop music increasingly has beencomposed while being recorded.If sheet mu-sic is published at all, it is producedafter thesong has become a hit (Tagg 1982).Musicologists of popular music advisethat any written transcription is an in-adequate representation of a recording(Winkler forthcoming) and of the nuancesthat made it a hit (Keil and Feld 1994). Inany case, the commercially available sheetmusic of the sort used by Alexander does

* Direct all correspondence to Richard A.Peterson, Department of Sociology, Box 1635Station B, Vanderbilt University, Nashville, TN37235 (Internet:[email protected]).We are grateful for help and advice from Timo-thy Dowd, Eric Fine, LarryGriffin, Roger Kern,Barbara Kilbourne, Holly McCammon, ClairePeterson, David Sanjek, DarrenSherkat, and Pe-ter Winkler.

I Through the mid-1970s the correlation be-tween the number of firms with records in theTop 10 of the weekly Billboard chart and thenumber of labels reaching the Top 10 is nearlyperfect. See Peterson and Berger (1975).


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176 AMERICAN SOCIOLOGICAL REVIEWnot faithfully represent what is recorded.His claiming that it represents the hit re-cording is analogous to saying that theMona Lisa printed on a T-shirt accuratelyrepresents the painting on display in theLouvre. Sheet music is a simplified versionof the hit, made to be sold to amateur pian-ists or guitarists and to club-date profes-sionals who are expected to play the latestpop hits at weddings and bar mitzvahs. Con-sider for example, time and meter, the mostobjective of Alexander's five diversity vari-ables. From the sheet music, he codes eachsong as 4/4 or 2/2 versus anything else, butthis poorly represents the hit record. Dowd(personal communication) reportsthat in hissample of number-one songs of the 1955-1988 period, fully 20 percent of the 105songs shift meter and do so for an averageof 11 percent of the durationof the record-ing. Thus, measures of the characteristics ofmusic must be generated directly from thehit recording, as Dowd (1992) has done.Moreover, an index of diversity should alsoinclude measures for song lyrics becauselyrics are vital in making a record into a hit(Frith 1987).A SUMMARY MEASURE OFDIVERSITYWe applaud Alexander for combining theseveral measures of songs in a single indexof diversity.2The particularmeasure that hecalls entropydoes not, however,take into ac-count the degree of difference betweensongs. Thus, for example, if half the songsfit in one cell and are like the other half ofthe sample except for a single characteristic,the same difference score is obtained aswhen the two homogeneous halves are dif-ferent from each other in every single char-acteristic! Since Alexander neither providesannualplots of the distributionof songs, norcomputes a measure of the distances of thesongs from each other, it is not possible toestimate the actual diversity of songs fromwhathe calls entropy.Network analysts havedeveloped just such measures, and so hasDowd (1995).

DIVERSITY DOESN'T EQUALINNOVATIONSAlexander faults us for using the number ofrecords that in a year reach the Top 10 of theweekly pop Billboard chart, ignoring com-pletely the numerous independent lines ofevidence we developed to show that thissimple measure of diversity did in fact fairlyrepresent innovation in the period we exam-ined. This measure, Peterson (1994) argues,cannot be used uncritically now because arapid turnoverof songs "may no longer indi-cate aesthetic innovation but ratheraestheticexhaustion, as trivially different songsquickly reach the top of the charts-and asquickly fade because they are derivative"(Peterson 1994:176).There must be diversity if there is innova-tion, but the opposite is not true, becausethere can be great diversity with no innova-tion. For example Christianen (1995) de-scribes a numberof streams of music in theDutch music market that have maintainedtheir distinctiveness over decades. This is asituation of considerable diversity in whichthe innovativeness may be slight. Nontrivialinnovation in music is generally signaled bythe wide use of a new name for a style ofmusic and an associated group of perform-ers. Possible examples of innovation includerave, techno, acid jazz, grunge, rap, house,New Age, disco, funk, punk, acid rock,Motown, big beat, folk-rock, soul, rocka-billy, do-wop, bop, torch, swing, etc. In fo-cusing on diversity alone, Alexander, amongothers,has forgottenthat the masterquestionderivingfrom Schumpeter (1950) is the rela-tionship between industryconcentrationandinnovation.LINKING CONCENTRATION ANDINNOVATIONGiven our concerns about Alexander's mea-sures of concentration and diversity, we willnot comment on his testing of their relation-ship. Suffice it to say that we are heartenedthat he finds that there is still a strong linearrelationship between our measure of diver-sity-as-innovation and music industry con-centration as seen in Alexander (1996) col-umn 5 of Table 1. The failure of the nonlin-ear model shown in column 6 adds weight to

2 It would be useful to know the degree towhich the individual items are correlated and howmuch each contributes to the diversity index.


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COMMENTS AND REPLIES 177our assertion that the relationship betweenconcentrationand innovation is linear.Future studies that use regression modelsto test the relationshipbetween concentrationand innovation (or diversity) will need to besensitive to the assumptions underlying themethods of time-ordered analysis of histori-cal processes. Burnett and Weber (1989),Peterson (1990), Lopes (1992), and Anandand Peterson (1995) show that the structureof the music industry has changed severaltimes since 1948, and as Isaac and Griffin(1989) suggest, such change necessitates thehistoricization of quantitative methodology.PROBABLE LIMITS OF THEGENERALIZATIONLooking beyond popular music, a positive re-lationship between competition and innova-tion has been found in a wide rangeof fields,but this does not mean that the relationshipshould apply universally. We believe it ismost likely to hold in regulation-freemarketsituations where demand is elastic, barriersto entry are low, and research and develop-ment costs are not high.Richard A. Peterson is Professor of Sociology atVanderbilt University. WithNarasimhan Anand,he is researching the role of new forms ofinformation in restructuringthe commercial mu-sic field. WithRoger Kern and others, he is ex-ploring the changing stratification of taste withthe emergence of omnivores and lower statusunivore taste groups. Thenext installment in thisset (forthcomingin ASR)deals with the displace-ment of highbrow snobs by omnivores. In addi-tion, he is completing a monograph on thefabri-cation of authentic country music in the secondquarter of the twentiethcentury.David G. Berger is Associate Professor of Soci-ology at Temple University. He is currently re-searching and shooting a film documentary onthe life and works of Jazz bassist and photogra-pher, Milt Hinton.REFERENCESAlexander, Peter J. 1996. "Entropy and PopularCulture: Product Diversity in the Popular Mu-sic Recording Industry." American Sociologi-cal Review 61:171 -74.Anand, Narasimhan and Richard A. Peterson.1995. "When Market Information ConstitutesFields: The Music Industry Case." OwenGraduate School of Management, Vanderbilt

University, Nashville, TN. Unpublished manu-script.Burnett, Robert. 1990. "Concentrationand Diver-sity in the InternationalPhonogram Industry."Ph.D. dissertation, Department of Journalismand Mass Communication, University ofGothenburg, Sweden.Burnett, Robert and Robert Philip Weber. 1989."Concentration and Diversity in the PopularMusic Industry: 1948-1986." Paper presentedat the annual meeting of the American Socio-logical Association, August, San Francisco,CA.Carroll, Glenn R. 1985. "Concentrationand Spe-cialization: Dynamics of Niche Width in Popu-lations of Organizations."American Journal ofSociology 90:1262-83.Christianen, Michael. 1995. "Cycles in SymbolProduction? A New Model to Explain Concen-tration,Diversity, and Innovation in the MusicIndustry."Popular Music 14:55-93.Dowd, Timothy J. 1992. "The Musical Structureand Social Context of Number One Songs: AnExploratoryAnalysis." Pp. 130-57 in Vocabu-laries of Public Life, edited by R. Wuthnow.London, England: Routledge.. 1995. "TheSong Remains the Same? TheMusical Diversity and Industry Context ofNumber One Songs: 1955-1990." Departmentof Sociology, Emory University: Atlanta, GA.Unpublishedmanuscript.Frith, Simon. 1987. "Why Do Songs HaveWords?"Pp. 77-106 in Lost in the Music: Cul-ture,Style, and the Musical Event, SociologicalReview Monograph34. London, England.Isaac, Larry and Larry Griffin. 1989."Ahistoricismin Time-Series Analysis of His-torical Process." American Sociological Re-view 54:873-90.Keil, Charles and Steven Feld. 1994. MusicGrooves. Chicago, IL: University of ChicagoPress.Lopes, Paul D. 1992. "Innovationand Diversityin the Popular Music Industry:1969 to 1990."AmericanSociological Review 57:46-71.Peterson,Richard A. 1990. "Why 1955? Explain-ing the Advent of Rock Music." Popular Mu-sic 9:97-116.. 1994. "CulturalStudies Throughthe Pro-duction Perspective." Pp. 163-89 in The Soci-ology of Culture, edited by D. Crane. Oxford,England:Blackwell.Peterson, Richard A. and David G. Berger. 1975."Cycles in Symbol Production: The Case ofPopularMusic." AmericanSociological Review40:158-73.Rothenbuhler, Eric and John Dimmick. 1982."Popular Music: Concentration and Diversityin the Industry, 1974-1980." Journal ofCommunication 32:143-49.Schulze, Rolf. 1994. "Hit Record Trends on theGerman Music Market for Popular Music


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178 AMERICAN SOCIOLOGICAL REVIEW1975-1993" Paper presented at the 8th Inter-national Congress on CulturalEconomics, Au-gust 24-27, Witten, Germany.Schumpeter, Joseph A. 1950. Capitalism, Social-ism, and Democracy. New York: Harper andRow.Tagg, Philip. 1982. "Analyzing Popular Music:

Theory, Method, and Practice."Popular Music2:37-68.Winkler, Peter. Forthcoming. "Writing GhostNotes: The Poetics and Politics of Transcrip-tion." In State of the Art: Refiguring MusicStudies edited by D. Scharz and A. Hassabian.Richmond,VA: University of Virginia Press.

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