Abstract: The music distribution landscape is constantly changing as technology advances, which presents challenges for artists, producers, and consumers. Although Music Business textbooks are updated every year, industry changes happen before the semester ends. Hence, it is vital for the industry to stay informed about current trends and anticipate future directions in the music business.
The music industry is experiencing a major change, with consumers and artists embracing new technologies while developers struggle to keep up. Record companies are striving to maintain control by relying on traditional copyright policies. This paper investigates different revenue-generating strategies used by bands, analyzes the effects of digital music distribution, and questions whether record companies will succeed in their fight against file-sharing or be left behind.
The media is experiencing significant changes in this age of rapid technological advancements, commonly known as the ‘digital renaissance’. These changes extend beyond just its form and also impact our perception, interaction, and distribution of media due to the influence of modern technology.
While certain aspects of digital media are rapidly evolving, there is a significant lag in copyright laws within the music industry. Record executives cling to outdated regulations to preserve their control, hindering the progress of global peer-to-peer networking for digital distribution.
While it is crucial to monitor these distributions for artists to receive their necessary royalties, they seem to be coping well by utilizing alternative technologies like new advertising platforms and ringtone downloads. Furthermore, legal paid digital distribution is increasingly becoming popular and might become the industry’s primary focus. Adapting to this evolving world appears to be most challenging for record executives, and only time will disclose how they adapt to this greatly transformed landscape.
This paper examines the research conducted on the various factors influencing the industry at present and the implications for both stakeholders and participants. The primary focus of my current “Business of Music” class has been understanding the significant role record labels play in the industry. Moreover, copyright laws and the importance of safeguarding intellectual property for maintaining order in the business also form an integral part of the course.
When asked about P2P networks and digital downloading, my professor is unable to provide a response. We also discuss a technology called Sound Scan, which records every album sold in stores and sends this data to a supercomputer. The supercomputer informs record companies about the number of albums sold by their artists, and royalties are distributed accordingly. However, when asked how this process will be adapted in the digital age, where millions of consumers download music via unmediated networks, my professor has no answer.
When I inquired my music professor about copyright laws regarding remixes and samples, particularly in hip-hop where tracks are exchanged like playing cards among artists, he was unable to provide a definite answer. It is important to note that I highly respect the expertise of my music professor, who is a highly accomplished individual even nominated for the Rock ‘n Roll Hall of Fame. His knowledge of the industry is extensive. However, we are currently witnessing a cultural shift that is causing individuals like my professor to become less common. Soon, his teaching methods will need to adapt to the predominance of digital media in the industry. To truly understand our digital culture, we must first comprehend the current situation and then predict how our present actions will shape the future.
In terms of literature on this topic, studies have identified digital distribution as the primary driving force behind changes in music distribution. This transformation is revolutionizing the industry by providing “local” bands with an opportunity to reach a much larger audience than they could traditionally reach.
The article “Local musicians building global audiences: Social capital and the distribution of user-created content on- and off-line” focuses on the changing dynamics of local-level music production and distribution. It expands on previous research about interactive online content creation and explores how musicians utilize social capital to cultivate audiences both online and offline. Additionally, the article emphasizes the digital strategies employed by musicians to grow their audience.
The researcher has considered two local bands from two distinct college towns and analyzed the advantages and disadvantages of digitally distributing their music. It is discovered that digital distribution enables them to reach a broader audience, and it particularly aids in developing a robust social capital system. These networks allow the bands to maintain communication with their fans, thereby building and reinforcing strong bonds with their established fanbase. However, it does not necessarily assist them in expanding their fanbase as originally intended.
The article discusses the difficulty of integrating music into websites and streams to attract new listeners. It emphasizes that equal amounts of time, effort, and money are spent on advertising through peer-to-peer sites compared to traditional promotion methods. Another article called “Music in the Digital Age: Musicians and Fans Around the World ‘Come Together’ on the Net” further explores this aspect of digital downloading.
The article explores the profound transformations in the industry, specifically in production, consumption, and distribution, brought about by the virtual world. Artists now possess the ability to independently manage online distribution of their work, circumventing record companies and securing complete revenue and copyright ownership. Moreover, digital distribution has eradicated geographical and cultural obstacles for achieving global reach.
This development has also facilitated a more direct and accessible communication between fans and artists. It has also provided fans with enhanced options for customization and even editing of music. Certain bands are openly allowing consumers to create their own mixes of songs. It is worth noting that while such actions may have been previously deemed as copyright infringement, they are now handled with more leniency. The mentioned article suggests that this form of virtual interaction could align with Marshall McLuhan’s concept of a ‘global village’ on the internet.
The next article, titled “The new radio’: Music licensing as a response to industry woe”, takes a brief break from discussing digital networking to explore the growing role of commercial advertising in promoting music. In an era where the music industry is becoming more concentrated and popular culture dominates the airwaves, struggling bands are finding opportunities for wide exposure and significant financial gain through advertising agencies. An example of this is Moby, an artist who was relatively unknown until the year 2000 when his album, Play, received extensive radio airplay and sold millions of copies worldwide.
The global presence of all 18 tracks from the album has enabled these achievements. Currently, artists like Arcade Fire and Vampire Weekend have achieved mainstream success primarily because their songs are featured in various television commercials. Similarly, certain bands are utilizing video games as an additional platform for increased exposure. Games such as Grand Theft Auto, Saints Row, and especially sports games like Madden and NHL have all played a role in boosting the popularity of lesser-known bands by including their songs.
Due to advancements in technology and the decline of radio, as well as the issue of illegal downloading, music can now be distributed through mobile devices. “Mobile music, customer value, and changing market needs” article suggests that certain user segments now consider phones as a source of entertainment. Furthermore, there is an increase in personalized services and various payment models for digital music. This shift is a response to the limitations of radio and the prevalence of illegal file sharing.
Hence, music companies are exploring alternative distribution channels like phones and other mobile devices, which have proven successful. However, illegal downloading poses a significant problem since it violates U.S. copyright laws.
There is a contention that advocates for the updating of antiquated copyright laws, which have been in place for centuries. The advent of modern technologies has greatly revolutionized the music industry, necessitating a corresponding evolution in copyright laws. In “Musical Copyright Law: Past, present and future of online music distribution,” R. J. Delchin investigates how copyright laws consistently lag behind in adjusting to shifting circumstances, like the current file-sharing situation.
The development of this new technology has revolutionized the industry, providing consumers with greater convenience in accessing music. It is evident that there is no going back from this point, necessitating agencies like DMCA to adjust their strategies in order to stay relevant. The paper contends that the methods employed by these agencies to impede file sharing and online webcasting not only negatively impact the industry (by hindering independent bands from gaining exposure while favoring established mainstream bands), but also prove ineffective in preventing such distributions.
Consumers no longer view these actions as immoral, although they remain illegal. Thus, copyright agencies like these must ease their copyright laws rather than tightening them, as has happened recently. Another article titled “When creators, corporations and consumers collide: Napster and the development of online music distribution” explores the origins of this situation. At the outset, it was Napster against “The Big Five,” comprising the major record companies EMI, Universal, Sony, Time Warner, and BMG.
The article discusses the lawsuit between The Big Five and Napster, which initiated a larger ongoing conflict between the “New Economy” and the “Old Economy”. The New Economy emerged with the belief in the Nirvana Theory of the internet, stating that it allows unrestricted exchange of intellectual property for both creators and consumers. On the other hand, The Big Five sought control over these transactions through tracking, litigation, and anti-copying technologies. Following their victory in the Napster lawsuit, The Big Five now aim to expand their dominance over the music industry by incorporating online and digital transactions. According to the article’s prediction, this will be achieved by implementing monthly flat-rate subscriptions that grant consumers unlimited access to a regulated online music library.
The article titled “Plenty to learn from Apple’s ‘near-perfect’ iTunes store” discusses the functionalities and success of the iTunes Store, which is considered the first and only legitimate digital replacement for traditional music outlets. It acknowledges that record companies used to have control over what music we would like by monopolizing airwaves and predicting success or failure. However, with digital distribution, consumers now have the freedom to choose and enjoy music based on their preferences.
Although services like Napster and Limewire brought joy to consumers, they significantly reduced artists’ royalties. However, I recently discovered that record companies actually own and operate services like Rhapsody. Amidst efforts to address the evolving music distribution landscape, Steve Jobs successfully created a network that benefits both artists and consumers, while also securing a portion for himself as the middleman.
The iTunes store is an excellent example of how to bundle and distribute music at an affordable price while ensuring that the creators are properly compensated. It offers 99cent songs and $10 albums as part of its package. The interface of the store is user-friendly, taking inspiration from platforms like Amazon and chains like Starbucks. Currently, the iTunes store appears to be the only successful solution that benefits both consumers and artists. Undoubtedly, Mr. Jobbs is also thriving from this venture.
The article “Managing Pirate Culture: Corporate Responses to Peer-to-Peer Networking” investigates the contradictory responses of major record companies towards peer-to-peer (P2P) music sharing and highlights their hypocritical approach in the digital downloading age. The core problem in digital music distribution lies in the inadequate compensation of copyrighted material for record labels and artists. While record labels attribute the decline in record sales to file sharing through P2P networks, there are numerous other factors contributing to this phenomenon.
The major record companies are attempting to demonize file sharing by using words like ‘piracy’ and ‘theft’ on their platform, in order to protect their industry. However, they are also exploring ways to benefit from P2P networking. If they are able to gain control, they will eliminate the existing free and personalized interaction between peers and artists, and maintain their dominance in the industry.
The article highlights that the major record labels are capable of absorbing the financial decline caused by new technology in the music industry. Numerous articles have thoroughly examined and assessed the potential adverse effects of file sharing on artists and their record labels.
Contrary to the initial perception of artists suffering, it is now evident that they are not facing significant hardship. The emergence of new network options has provided additional avenues for fan interaction and relationships that were previously inaccessible. Interestingly, most artists are enthusiastic about the opportunity to widely distribute their content on the internet. Notably, local musicians, who were initially utilized by record companies to garner sympathy in their battle against file sharing, are benefiting greatly from social networking. This issue originated from the lawsuit filed by the Big Five record companies against Napster and highlights how these companies leverage outdated copyright policies to support their argument. This article, along with another one, proposes that it is actually the record companies that should adapt and change. Furthermore, it suggests updating our country’s copyright laws to keep up with current times.
We observe various methods through which musicians are presently generating revenue, including established platforms for legal digital distribution like iTunes, as well as newer technologies like television and videogame advertising and mobile ringtones. Ultimately, it appears that artists will thrive in this digital era while record companies struggle with the shift in power.
Interestingly enough (or perhaps not so surprisingly), I could not locate a single article that offered any sympathy towards the record executives. Each article I came across, even those that initially presented the record labels’ perspective and highlighted the challenges posed by new technologies, ultimately concluded that their argument against digital downloading held little weight. Moreover, they suggested that the copyright laws they relied on may no longer hold the same effectiveness in this modern era.
It is difficult to feel sorry for the record companies, who already have the most legal and financial power in the music industry and essentially act as intermediaries between artists and consumers. The current era of file sharing and P2P networking is eliminating the need for intermediaries, as fans now have more direct contact with and control over their musical preferences. Figures like Steve Jobs are beginning to recognize this shift and take on the role of the new intermediaries in the industry. Perhaps it is time for the old leaders to step aside.