People listen to music for a variety of reasons. Some listen to music to relax in which it serves as a sort of escape from everyday life, some because they are a fan and follow a certain artist, and others because they can relate the lyrics to their own personal experiences. Whichever the case may be, music has and continues to serve an important role in people’s lives. Music has been circulating the air across many cultures for centuries; however, in the last 50 years, the music industry has become an important global industry and an vital area for economic activity on many geographic scales (comp.45).
Over the years, music consumption has grown and spread across many areas. Music consumption has become “more of less. ” This contradictory idea alludes to the fact that individuals are listening to music of many different artists rather than to an entire album by a singular artist. This causes people’s music collection to become more diversified. Likewise, more people are listening to music because it has become so accessible. Technology has undoubtedly changed the music industry and is perhaps the main reason why individuals no longer consume an entire album.
Previously, people were required to buy an entire album or CD even if they only wanted a few specific songs. With new technological advancements, music consumption has become more fragmented. Individuals can instead purchase their favorite song by each artist while eliminating all others from their collection. Due to technological advancements such as the Internet, there is now a wider variety of music because a greater diversity is more accessible. An individual no longer has to leave his house and drive down the street to a store to purchase music.
Instead, he can sit at home or in his office and download his favorite tune with a few clicks of his computer or mobile device. The consumer also has the ability to listen to music without purchasing it. Today, individuals can do this by using online host sites such as Pandora and YouTube. Ultimately, technology is linked to the long tail theory. While this is a heavily debated topic of whether the long tail is in fact truly favored or not, one thing is for certain; the long tail definitely exists. Online sharing and purchasing has become a whole new economic model for the media.
The long tail theory allows for not only the hits, but rather all music, to be used, followed and appreciated through digital media. An article by Chris Anderson states that people are willing to go deep, well past the long list of popular titles available at such record stores. He adds, the more they find the more they like (comp. 360). These online sources are allowing people to discover that their interest in music may not be as mainstream as they once thought. This theory demonstrates that popular culture is not all about the hits. Alternatively, it is about the long tail.
It is the want and need for everything else. Anderson reiterates, “As fast as Rhapsody adds tracks to its library, those songs find an audience, even if it’s just a few people a month, somewhere in the country” (comp. 361). Kevin Laws, a former music industry consultant quotes, “The biggest money is in the smallest sales” (comp 362). These are just a few brief examples of how the long tail theory is upheld. Technology has not only changed the consumption of music, but also the production. Today, there are four major labels: Warner Music, Song BMG, Universal, and EMI (??).
These major record labels control 80 percent of the U. S. market and 70 percent of the world market (powerpoint 10/27). In the past, it took many different companies to complete all the steps to produce an album or song. The major problem with this method was that it was very costly. Since then, technological advancements have facilitated labels to take on the process themselves. Today, labels are now integrating themselves in the majority of the process including the production, marketing, and even the retailing of the label (powerpoint 10/27).
This new approach seems to be increasingly beneficial and cost effective. Intellectual property rights (IPR) are invaluable assets to the music industry. IPR offers protection of various tangible and intangible forms of legal property to creations with tools including copyrights, trademarks, patents, and trade secrets. Intellectual property rights give exclusive rights and protection to authors or producers of assorted works including, but not limited to, audiovisual, literary, motion pictures, graphic, and sound recordings (comp 95).
The IPR most commonly used by the music industry is the copyright, which gives the owner control rights over works through the lifetime of the author plus seventy years. IPR and copyright laws are important to the music industry because they provide protection to all parties involved in the creation product of music; the value of the copyright is insurmountable to the creators of the music based on work put into the creative process, yet tangible in the sense of providing protection for the music industry by protecting against piracy and unlawful gains from outside parties.
Without IPR, the industry would have little incentive to develop; copyright laws allow musicians and the music industry to create and promote music without fear of replication, distribution, or adaptation by outside parties (comp 95). The music industry as a whole can be viewed as a business; the goal of any business is to turn a profit by providing a product or service. The product, music, generates income for those involved in the creative process.
With the invention of streaming sites and digital downloads on the Internet, a need for IPR in the music industry has increased. Today, anyone with a computer is capable of illegally downloading music streamed from the Internet. To download music without monetary compensation is comparable to stealing an album from a music store. Both actions are considered theft by the artist and result in lost opportunity for profit by the artist and possible jail time for the party charged with theft.
One example of why IPR is essential to the music industry is in the comparison of the Stockholm, Sweden and Kingston, Jamaica, both of which are predominant hubs of music creation and production globally. Though the 1994 figures as published by Power and Hallencruentz are dated, the export figures of US $ from the music industry in Kingston was $291,000, with less being earned as royalties (compend #). When compared to the Stockholm industry, which has employed strict IPR for decades, in 2000 had a commercial music market worth $322.
9 million (comp. 49). Industry in Jamaica has been unable to yield such high profits as Stockholm due to the lax IPR enforced. Jamaica as a culture has a large global commercial appeal with its innovative and unique sounds; in theory with such a wealth of talent the industry has the potential to earn equal worth as the Stockholm industry. Effective copyright and IPR was not developed in Jamaica until 1993, which can account for the low income earned by the nation in contrast to the high volume of creative output the industry produces.
The industry in Jamaica has experienced problems with high levels of piracy due to the lack of copyright and IPR enforcement. It can be argued then that the best way to stop illegal procurement of music through downloading would be to make it free. Some artists have opted to allow download of their music through a “pay what you want” system where fans can choose to pay some, none, or more of, the regular album cost. Radiohead pioneered this trend in 2007 with the album “In Rainbows” after being released from their record industry contract. Donations went right to
the artists rather than filtering through the pockets of industry executives and revenue demonstrated that consumers appreciated the groundbreaking attempt. The average amount spent for all downloads of the album was $2. 26 compared with the between three and five dollars Radiohead normally receives from the sale of a single album. Seeing as a majority of the price of an album doesn’t normally go to the artists, the future of music downloading could see a lot of artists leaving labels behind and releasing downloads in the Radiohead fashion.
It should be taken into account however that Radiohead had years of industry support in the form of production and marketing before releasing “In Rainbows” and without that they’d likely just be another no-name struggling artist giving away their music hoping someone in power will hear. Short of censoring the internet there is little that can be done to stop mass file sharing so if bands can find ways to become credible without the aid of record labels the possibility exists for the “pay what you want” system to become viral.
The music industry is not the only creative industry under siege by the Internet era. While there are many notable examples such as film and fashion, television is the most prominent example of this. In this day and age, just about anything can be found on the Internet, and that includes streaming any television show one could ever want to watch. With all of these free options on the Internet, it is much more common for people not to have cable at all. Even those households who pay for cable need not be tied down by a set schedule in order to enjoy their favorite television shows.
It does not make sense for a consumer on a tight budget to pay for cable when his or her shows are so easily accessible on the Internet. Additionally, it is illogical for one on a tight schedule to plan his or her evening around a show when it will be on the Internet hours after the original air time. The biggest difference between the music and television industries is that music is legal to stream, thanks to wonderful providers such as YouTube. Most of the time, people do not download episodes of TV shows. Instead they just stream them as it is less common to go back and re-watch episodes repeatedly.
This makes it harder to track and regulate. One creative invention the television industry has come up with to try and combat this issue is Hulu. Hulu is a website where users can pay a monthly fee and watch unlimited episodes of whatever shows they want. It is cheaper than cable and allows individuals to watch on your own time. This does not negate the streaming problem, but rather mitigates it. In order for the music industry to keep growing both financially and artistically, it is becoming increasingly important to evolve and adapt.
The Internet revolution was a huge disruption to the industry, but as described in “Re-Tuning the Music Industry” (compendium pg. 368), innovation is a feasible method to combat the problem. The main issue with this is that the Internet seems to always be one step ahead of the music industry, so it is more often playing catch up than taking preventative measures. For example, downloading music illegally from the Internet came before downloading legally did. Once there was a way to monitor illegal downloading, torrents came around. And once there was a way for torrents to be monitored, the file sharing revolution came into play.
In order for the music industry to continue progressing, the innovation must pick up. Likewise, it seems like it is doing just that. A recent invention called Spotify was released not too long ago, and while it is still sort of niche at this point, it is picking up steam. For an affordable price each month, users are granted unlimited access to an unlimited number of songs from their computer. It seems to be a Hulu of the music industry. Innovation is an important component for the music industry, but a bigger shift in the general business model might be required.
As discussed on our field study at VEGA, income may need to begin relying more on concerts than album sales. The Internet grants the ability to have an album on your MP3 device in only minutes. Fans take listening to music for granted and need something more. This is evident through a rise in concert attendance and prices. The prices of a tickets have increased dramatically over the past decade and fans continue to pay the cost of admission. Listening to an album no longer is the experience it once was, but fans crave the concerts which fill that void.
As a CEO in charge of a record label, I would mainly focus my attention on concert promotion and production, as well as innovation. With the rapid development of technology, it is difficult to see too far into the future of the music industry. It seems that the best option is to focus on what works in the present, but being ever aware of change in the industry. It is impossible to tell what is far down the road, but taking advantage of the present while constantly adapting to changing times is what it takes to survive in such a tumultuous industry.