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Klosterman: Anyone Seen My $4.2 Billion?

Klosterman: Anyone Seen My $4.2 Billion?

Chuck Klosterman’s recent column in Esquire is finally online and worth checking out. In it, he offers an interesting reason for where all the money that people used to spend on albums, may have gone. According to estimates, annual record sales have dipped $4.2 billion between 1999 and 2006. While it’s clear that people aren’t purchasing albums like they used to it, Klosterman asks where all that money is being spent. His theory (besides DVDs, video games, and ringtones)? Paying down personal debt. From his column:

Video-game revenue has more than doubled since 2000, and DVD sales grew from $2.5 billion in 2000 to $23.4 billion last year. The only problem is while CDs, DVDs, and video games are physically similar, and they’re sold in the same outlet, the experiences they offer aren’t logically connected. I don’t see why not having to pay for a Band of Horses album would make a person any more likely to buy a copy of Knocked Up, as opposed to buying four gallons of gas or a pair of sunglasses or a turtle. I don’t think young people swap out items in their “leisure” budget that explicitly.

What seems more likely is that this extra $4.2 billion — unequally distributed among all the music fans who didn’t pay for music in 2006 — entered the overall economy in lots of disparate ways. And while we’ll never know exactly where all those bones disappeared, my specific theory is this: A lot of the money not spent on music in the twenty-first century is being used to pay off credit-card debt that was incurred during the nineties. In other words, not paying for In Rainbows today is helping people eliminate the balance they still owe for buying Mellon Collie and the Infinite Sadness when they were broke in 1995.

During the early eighties, it was difficult for college kids to get credit cards; at the time, parents still needed to be cosigners. But when that policy changed in the early nineties, it instantly became effortless for any slack-jawed student to get a credit card. Subsequently, the percentage of young adults (ages eighteen to thirty-four) with credit-card debt increased 5.6 percent from 1989 through 1998. But after 1998, it started to decrease; by 2004, it was lower than it was in 1989.

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