Essay
Investment in Musical Acts
Signing new music acts can be highly speculative.Record producers at music studios have to get budget approval before they sign a new act to a recording deal.Most acts perform a tried and true form of popular music in which record sales can be pretty well predicted.However,once they get approval for their budgets,why do producers sometimes sign riskier acts who either flop or "break-out" into the next sensation?
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This is a moral hazard issue.Record prod...View Answer
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