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When it comes to costs all businesses try their best to keep them as low as possible, while balancing expenses, profits, and hitting the right price point for their market.
But recently, some art auction houses have sold masterpiece paintings at record breaking prices, which brings to mind many questions concerning the correct way to price the value of art.
At a time in our country's economy when unemployment is high and jobs are scarce, wealthy patrons still have the ability to purchase paintings for tens, and even hundreds of millions of dollars, art which when viewed carefully has extremely subjective value in terms of merit and emotional impact.
Meanwhile, in other areas of the economy the price of necessities remains low even though many reports show that some commodities prices are stealthily climbing higher due to inflation related to government money printing.
This trend has improved business for discount chains and grocery stores and increased demand for them, but it's crushing the small business owner and dramatically changing the retail landscape throughout America.
Juxtaposing these two scenes we begin to find a great discrepancy between the price of art vs. necessities and their relative value in terms of demand. Supply too is the other factor to take into account when judging the value of an item in terms of its price.
Supply is simply how much of something there is available and how easy is it to get more of it and bring it to market compared to its perceived scarcity. It's within the subject of perceived scarcity where the price of an object begins to skyrocket. Unfortunately, rarity is no measure of desirability, so the desire of the consumer has to be tied to the scarcity of an object before the price starts to climb.
Demand, on the other hand, is an interesting factor to unravel since it includes our wants and needs relative to supply. No one really needs a $100 million painting by an obscure artist, but someone may actually want it. Contrast this with the idea that everyone needs soap, toothpaste, fingernail clippers, deodorant, clothing, food, and various cleaning products constantly available throughout each and every day.
The need forces the demand which requires us to buy these types of items because we have to have them. Yet the prices of many of these items remains low relative to the items in the art world.
What's the value of great guacamole? What should it's price be? How much could Chipotle raise prices on their guacamole before people stopped buying? Would people continue eating at Chipotle, but avoid adding guacamole to their order? Currently, a 4 oz. container of guacamole at locations in California costs about $2, is that too little, fair, or too much? What is the experience of eating awesome guacamole worth to anyone?
Like gasoline, Q-tips, detergent, shoes, all of these items get consumed and must be replaced as part of basic maintenance. Designer clothes and fine cuisine may be creative work generating artistic products, but for the most part the items produced in these industries are consumable and must be replaced over time, but art is different.
Paintings, however, are preserved and change ownership over time. In general, they rise in value, form some part of a person's prestige, and represent an aspect of an art collector's wealth.
In contrast, music shares none of these qualities. Some of the most expensive music related items in the world consists of various types of memorabilia, such as signed albums or framed album covers, but not specifically highly priced music valued for its artistic qualities.
Presently, music seems to be stuck at $.99 per track download even though it too remains in a preserved state, stays with a single owner, and is not consumed. 45 records, cassette tapes, and Cd's were consumable forms of music media, but digital downloads are not. Digital downloads are a new form of music media that preserves its fidelity in a state of relative permanence compared to its analog cousins.
In the “old days” when we’d have to actually walk into a music store to buy a CD from somewhere between $9.99 – 16.99 we were lucky get 5 – 7 goods songs out of 10. But normally we would find ourselves bitter about the number of songs we actually liked on an album by an artist we admired. In fact, it was rare to find an album where every song was a near masterpiece. Some albums like “The Joshua Tree” and “Achtung Baby” by U2 among many others were in that rare category of incredible albums.
Would a buyer be opposed to $3 or 4 per track? In my previous example, if you bought an album in the “old days” and got 5 good tracks on a 10 song album, then you literally paid $2 a track, but you paid even more when you got less than 5 good songs, which means you might have been paying as high a price as $5 per track.
So then why is music not valued as highly as a painting?
To browse the entire Stereo Thesis music library now, go
to:
http://stereothesis.bandcamp.com/Related Articles:
The Music Galley: Can Music Ever Be Valued as Art?
A Living Album: Why Stereo Thesis Albums Grow and Change Over Time
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Marc
http://stereothesis.com/Remember to join our mailing list.
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