Welcome to Show Business, the Federal Reserve Bank of Boston’s learning activity on economics and the entertainment industry. Our goal is to provide an additional tool for teaching and learning about basic economic concepts. We’ve even managed to sneak in some economic history.

Why focus on entertainment?

No one ever said economics had to be “the dismal science.” If you can spark their interest, students often respond with enthusiasm and an intuitive grasp of economic reasoning.

The challenge, of course, is to spark their interest. And for better or worse, entertainment does the trick.

Not convinced? Walk into any classroom and try to engage the aforementioned students in a conversation about intellectual property rights. Then, after you recover from the disheartening lack of response, ask them their opinion on free music downloads. Odds are, you’ll meet with greater success, and with some skillful direction, they will learn a thing or two about intellectual property.

Four Stand-Alone Units

Show Business will have four stand-alone units. Each will include:
• a game component,
• narrative background materials,
• activities,
• discussion questions, and
• a resources section.

Completed Units

Unit 1: Climbing the Charts
focuses on how the market for music developed and evolved.

Upcoming Units
We plan to have three more Show Business units online by the end of 2008. Among the issues they will address are media consolidation, globalization, and the market for entertainment talent.

Visit Show Business: The Economic$ of Entertainment Website

Federal Reserve Bank of Boston presents.

Download A Guide for Users & Tips for Teachers

PDF format, 751KB, 11Pages.

Opportunities for Extended Learning

Key Words and Concepts

Here’s your big chance. Imagine that you are a writer for Rolling Stone magazine. Your assignment is to write an article on the music industry and use at least three of the following key words or concepts. The article doesn’t have to be based on real life events. You can use your creativity to make up names, songs, and events … as long as you use the words and concepts correctly, organize your thoughts well, and capture
the attention of your readers.

economies of scale: The average cost of an item will almost always drop as a producer makes a larger quantity of it.

Example: Let’s say a company spends $100 million to develop, manufacture, and market a new model MP3 player. If the company were to make just one unit, the cost per unit would be $100 million. But as the company becomes more efficient, it will be able to produce more units in a shorter period of time, and the average cost per unit will drop sharply.

entrepreneur: Someone who organizes, manages, and assumes the risks of a business or enterprise. In some ways, “entrepreneur” is a fancy way of saying “independent business person.”

Example: Sean “Diddy” Combs is an entertainer — a Grammy-winning rapper and an actor — but he is also an entrepreneur. He has taken the financial risk of producing and promoting music by other recording artists, and he has created his own fashion and fragrance lines.

incentive: A reward or encouragement for taking a particular action. We will often work harder and longer if we stand a chance of making more money or gaining greater recognition. And as consumers, we are sometimes more likely to buy something, if the seller “throws in something extra.”

Example: The manufacturer of a popular MP3 player offers an upgrade to it’s topof the-line headphones if you buy a player within the next 30 days.

intellectual property: Things — ideas, written works, songs, films, trademarks, logos — that we create by using our brains (our intellects) and talent. These things usually have commercial value, and the law usually protects our right to earn money from these creations.

Example: You apply to the governmentfor copyright protection of the new song you’ve written. The song is your intellectual property. If the government grants you the copyright, no one else can use the song without your permission (and you can charge users a fee for the rights to use your song).

Golden Oldies

Imagine that you are a reporter for radio or TV, and you are working on a documentary about the music industry. Your assignment is to:

1) Interview a few people who are at least a generation older than you — a parent, grandparent, aunt, uncle, family friend — to find out what “the music scene” was like when they were younger. or

2) Interview someone who is currently in a band — someone in your school or in a local band — to find out about their hopes and ambitions. Also ask them their thoughts on where they think the music industry is headed.

Make an audio or video recording of your interview, and report the story to your class. In fact, if you produce a piece you really like, contact us, and maybe we will be able to post it on our web site.

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