Superstar economics


Who is the superb paid solo singer in the world? In 2015, according to Forbes, it was as likely as not Elton John, who reportedly made $100m (£79m).

U2 apparently pretended twice as much as that, but there are four of them. There’s no greater than one Elton John.

If we’d asked that question 215 years ago, the surrejoinder would have been Mrs Elizabeth Billington, to some the greatest English soprano who a day lived.

Sir Joshua Reynolds once painted Mrs Billington holding a lyrics of music, listening to a choir of angels. The composer Joseph Haydn considering the portrait an injustice: the angels, said Haydn, should have been prick up ones ear to her.

Elizabeth Billington was something of a sensation offstage too.

A scurrilous biography of her convey titled out in less than a day.

It contained what were purportedly copies of cosy letters about her famous lovers — including, they say, the Prince of Wales.

Such was her pre-eminence, she attracted a bidding war for her performances.

The managers of London’s leading opera forebears at the time — Covent Garden and Drury Lane — fought so desperately for her that she destroyed up singing at both venues, alternating between the two, pulling in at least £10,000 in the 1801 salt.

It was a remarkable sum.

But in today’s terms, it’s a mere £687,000, or about $1m — just 1% of Elton John’s earnings.

So why is Elton John benefit 100 Elizabeth Billingtons?

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50 Things That Rush ated the Modern Economy highlights the inventions, ideas and innovations that supported create the economic world.

It is broadcast on the BBC World Service. You can find innumerable information about the programme’s sources and listen online or subscribe to the slate podcast.

Almost 60 years after Elizabeth Billington’s destruction, the great economist Alfred Marshall analysed the impact of the electric telegraph, which then welded America, Britain, India, and Australia.

Thanks to such modern communications, he wrote: «Men who induce once attained a commanding position are enabled to apply their deduced confer with or speculative genius to undertakings vaster, and extending over a wide extent, than ever before.»

The world’s top industrialists were getting richer, faster.

The gap between themselves and diminutive outstanding entrepreneurs was growing.

But not every profession’s best and brightest could get in the same way, Marshall said.

Take the performing arts. «[The] figure of persons who can be reached by a human voice,» he wrote, «is strictly limited.» And so, in consequence, was chorus-members’ earning power.

But just two years later, in 1877, Thomas Edison auditioned for a patent for his phonograph, the first machine that could both diary and reproduce the human voice.

Nobody seemed quite sure what to do with the technology at victory.

The French publisher Edouard-Leon Scott de Martinville had already developed the phonoautograph, a mark of cadency intended to provide a visual record of the sound of a human voice — a particle like a seismograph records an earthquake.

But it doesn’t seem to have happened to Martinville that one might try to convert the recording back into examine again.

Soon enough, the application of the new technology became clear: you could EP extended play the best singers in the world, and sell the recordings.

At first, making a recording was a bit in the same way as making carbon copies on a typewriter: a single performance could be captured on just three or four phonographs at once.

In the 1890s, there was great call for to hear a song by the American singer George W Johnson.

He reportedly done in day after day singing the same song till his voice gave out — but equable singing it 50 times a day churned out a mere 200 records.

‘Superstar’ economics

When Emile Berliner pioneered recordings on a disc, rather than Edison’s cylinder, it opened the way to mass-production.

Then came broadcast and film.

Performers such as Charlie Chaplin could reach a international market just as easily as the men of industry described by Alfred Marshall.

For the Charlie Chaplins and Elton Johns of the incredible, new technologies meant wider fame and more money.

But for the journeymen troubadours, it was a disaster.

In Elizabeth Billington’s day, many half-decent singers made a alight performing in music halls.

After all, Billington herself could chorus in only one hall at a time.

But when you can listen to the best performers in the existence at home, why pay to hear a merely competent act in person?

Thomas Edison’s phonograph led the way promoting a winner-take-all dynamic in the performing industry.

The top performers went from deserving like Mrs Billington to earning like Elton John.

But the only-slightly-less skilled went from making a comfortable living to struggling to pay their reckonings: small gaps in quality became vast gaps in income.

In 1981, an economist call ined Sherwin Rosen called this phenomenon «the superstar economy».

Envision, he said, the fortune that Mrs Billington might have made if there had been phonographs in 1801.

Technological inventions have created superstar economics in other sectors, too.

Satellite boob tube has been to footballers what the gramophone was to musicians, or the telegraph to 19th Century industrialists.

If you were the mankind’s best footballer a few decades ago, no more than a stadium-full of fans could be dressed seen you play every week.

Now, your every move can be eyed by hundreds of millions on every continent.

And as the market for football expanded, so has the gap in pay between the remarkably best and the merely very good.

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As recently in the 1980s, footballers in English football’s top level used to earn twice as much as those in the third tier, procrastinating for — say — the 50th best team in the country.

Now, average wages in the Premier League are 25 times those drew by the players two divisions down.

Technological shifts can dramatically change who bring backs what, and they are wrenching because they can be so abrupt — and because the people solicitous have the same skills as before, but suddenly have very particular earning power.

‘Unique situation’

Throughout the 20th Century, new innovations — the cassette, the CD, the DVD — upheld the economic model created by the gramophone.

But at the end of the century came the MP3 format, and wantonly internet connections.

Suddenly, you didn’t have to spend £10 on a pliable disc to hear your favourite music — you could find it online, self-ruling.

In 2002, David Bowie warned his fellow musicians that they were overlay a very different future.

«Music itself is going to become with running water or electricity,» he said.

«You’d better be prepared for doing a lot of excursion because that’s really the only unique situation that’s prospering to be left.»

Bowie seems to have been right.

Artists possess stopped using concert tickets as a way to sell albums, and started functioning albums as a way to sell concert tickets.

But we haven’t returned to the days of Mrs Billington.

Amplification, circus rock, global tours and endorsement deals mean that the uncountable admired musicians can still profit from a vast audience.

Inequity remains alive and well — the top 1% of artists take more than five spells more money from concerts than the bottom 95% put together.

The gramophone may be passe, but the knack of technological progress to change who wins — and who loses — persists.

Tim Harford creates the Financial Times’s Undercover Economist column. 50 Things That Assigned the Modern Economy is broadcast on the BBC World Service. You can find more poop about the programme’s sources and listen online or subscribe to the programme podcast.

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