Video Killed the Radio Star
When MTV launched in the early 1980s, it was a television channel dedicated solely to playing music videos. Many of the most popular acts of the era were unable to transition to the new visual media, or as the Buggles put it, “Video Killed the Radio Star.” It is interesting that this song, which laments the end of the radio era, was the first music video to play on MTV, in 1981.
Watch the lyric video and, in groups of two or three, answer the following questions.
1. In the 1980s, the public’s preferences changed from radio consumption to video. What impact did this have on the market for radios?
Answer: Demand for radios fell, leading to fewer radios being sold at a lower equilibrium price.
2. Many of the most popular acts of the radio era were unable to transition to the new media. What type of unemployment is this?
A) Structural
B) Cyclical
C) Frictional
D) Seasonal
Answer: Structural. These jobs disappeared because of industrial reorganisation, due to technological changes, rather than fluctuations in demand and supply (cyclical), movement between jobs (frictional) or variations across the year (seasonal).
3. How does “Video Killed the Radio Star” illustrate the concept of creative destruction?
Answer: Joseph Schumpeter defined creative destruction as a “process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying old ones, incessantly creating new ones.” The video star replaced the radio star in the 1980s; now the internet has killed the video star. The latest media transition involves the internet, music streaming, file sharing and YouTube fame. At some point in future, the internet star will also be replaced.
4. How have games, phones and other technological innovations changed the labor force?
Answer:
Labor demand: Technological advances have contributed to a sharp decline in manufacturing output in most Western economies. Manufacturers have switched from labor-intensive production to capital-intensive production As a result, the employment rate for low-skilled men and women has fallen in recent decades.
Labor Supply: Technology has also changed the value of leisure. Video games, social media and the internet have all increased the value of leisure. This serves to increase one’s reservation wage (the minimum wage one requires to work). For low-skilled workers with low market wages, staying home to play video games is more attractive. Many drop out of the labor force and still live with their parents. For high-skilled workers, even though the value of leisure has risen, their wages are still high enough for them to continue working, but the opportunity cost of working is now higher.
“Video Killed the Radio Star”
I heard you on the wireless back in fifty two
Lying awake intent at tuning in on you
If I was young it didn't stop you coming through
Oh, a, oh
They took the credit for your second symphony
Rewritten by machine on new technology
And now I understand the problems you can see
Oh, a, oh
I met your children
Oh a oh
What did you tell them?
Video killed the radio star
Video killed the radio star
Pictures came and broke your heart
Oh, a, a, a, oh
And now we meet in an abandoned studio (ohh)
We hear the playback and it seems so long ago
And you remember the jingles used to go (ahh)
Oh, a, oh
You were the first one
Oh, a, oh
You were the last one
Video killed the radio star
Video killed the radio star
In my mind and in my car
We can't rewind we've gone too far
Oh, a, a, a, oh
Oh, a, a, a, oh
Video killed the radio star
Video killed the radio star
In my mind and in my car
We can't rewind we've gone too far
Pictures came and broke your heart
Put the blame on VCR
You are a radio star
You are a radio star
Video killed the radio star
Video killed the radio star
Video killed the radio star
Video killed the radio star
video killed the radio star
Video killed the radio star
(You are a radio star) video killed the radio star
Video killed the radio star
(You are a radio star) video killed the radio star
Video killed the radio star