How Many Creative Products Earn Back Their Cost?

Joel Waldfogel says maybe 5 or 10 percent of creative products that get substantial investments earn out their advances and make more money than they cost to make. Commercial success in music, books, movies, and television is unpredictable.

Waldfogel is a professor at the University of Minnesota Carlson School of Management and also spends time in the economics department and the law school. He has studied the economics of creative industries for a few decades. Copyright used to be a sleepy topic, and now it is exciting. He focuses on products that can be digitized, stored as ones and zeros, and distributed in digital form. Recording, promoting, and distributing used to be very expensive, so an artist needed an investor willing to bet money on the chance the work might become popular. Even for the wisest investors, the bet was a long shot.