Abstract The ever-changing landscape of music distribution, due to constant advancements in technology, is sometimes hard to keep up with for artist, producer, and consumer alike. New editions of textbooks in Music Business classes are issued each year, and changes are made in the industry before the semester is even over. Because of this, it is vital for the industry to not only not only be aware of what is currently going happening, but also be able to foresee the direction that the music business is heading in.
In this aspect, it seems that we are at a turning point where consumers and artists are taking advantage of new technologies to reshape the industry, and developers are being left behind. Record companies are struggling to maintain their stranglehold on the music industry, most notably through utilizing age-old copyright policies. This paper explores the different avenues bands are taking to make a profit, the effects of digital music distribution on the industry, and proposes the question of whether record companies will win the war against file-sharing, use it to their advantage, or be left in the dust.
Introduction In this new age of constant technological advancement – an era that may very well be looked back on as a ‘digital renaissance’ of sorts – it seems that everything in our world is changing. One of the greatest vessels and products of this change is our media. Not only is the media itself different, but the way we perceive it, interact with it, and distribute it is now almost completely different due to modern technology.
But while digital media seems to be evolving faster in some areas than we can even keep up with, there are other areas that are sorely lagging behind. Focusing on the media of music, I’m referring mainly to copyrights. Because of ancient copyright laws that are stubbornly clung onto by record executives to ensure their stay in power, digital distribution is being cracked down upon and the advancement of a global P2P networking system is being thwarted.
While it is necessary for these distributions to be kept track of so that artists can collect the royalties necessary to maintain their work (and then some), it seems that the artists are coping just fine in the meantime through other emerging technologies such as new advertising mediums and ringtone downloads. Legal paid digital distribution is also emerging and becoming more popular, which may be the new direction that the industry is heading in. It appears that record executives have the biggest problem with adapting to this brave new world, and only time will tell how they cope with the drastically transformed landscape.
This paper looks at research that has been done on all the factors that are affecting the industry today, and what this means for both the players and the played. General Statement of Problem I’m taking a “Business of Music” class right now, and the majority of the class has been spent learning of the major and critical role that record labels play in the industry. Another main aspect of the course is copyright laws, and how the preservation of intellectual property is vital to maintaining order in the business.
When asked about P2P networks and digital downloading, though, my professor is stumped. We also talk about a technology called Sound Scan, which keeps track of every album that is sold in stores and sends the information to a supercomputer that tells record companies how many albums their artists have sold, and royalties are dished out accordingly. But when asked how this will be kept track of in the digital age, when millions of consumers download their music as files on unmediated networks, he doesn’t know what to say.
When I asked him how copyright laws work in terms of remixes and samples, especially in hip-hop where tracks are borrowed and traded between artists like playing cards, he couldn’t give me a straight answer. Now, I am in no way undermining the credibility of my music professor. He is a brilliant and established man who was recently suggested for the Rock ‘n Roll Hall of Fame, and his knowledge of the industry up to this point is boundless. But we are at a turning point in our culture, and its affects are making those like my professor part of a dying breed. Soon his course will be taught through a ompletely different lens, with digital media at the foreground of each lesson. To fully understand our digital culture, one must first get a firm grasp on the situation at hand, and then look to the future to predict how our changes today will affect tomorrow. Summary of Literature The main aspect of change in music distribution, which almost all of the new studies of the genre are incorporating, lies in digital distribution. One way that this is changing the face of the industry is how it allows “local” bands to spread their music across a much wider audience than would normally be possible.
One article, titled “Local musicians building global audiences: Social capital and the distribution of user-created content on- and off-line”, deals with this such change. Building upon existing work regarding interactive online content creation, this article examines local-level music production and distribution to demonstrate how musicians cultivate audiences through social capital that is exchanged both on- and off-line. More importantly, it examines how they do this digitally to build an audience.
The researcher has taken into account two local bands from two different college towns, and examined the pro’s and con’s that come from digitally distributing their music. It is found that digital distribution does allow them to spread to a much wider audience, and one thing that it helps with the most is the building of a solid social capital system. The networks allow them to keep in touch with their fans, building and strengthening close bonds with the fanbase they have already established. However, it does not necessarily help them to broaden their fanbase, which is the initial idea.
It is stated that it is actually quite difficult to integrate their music into websites and streams that will actually grab the attention of newcomers to listen to them. Another aspect of this article is the fact that an almost equal amount of time, effort, and money is put into advertising over the peer-to-peer sites as would be spent on getting their name out the old-fashioned way. Another article titled “Music in the Digital Age: Musicians and Fans Around the World “Come Together” on the Net” continues to explore this aspect of digital downloading.
This article explains how production, consumption, and distribution has changed wildly in the industry due to the virtual world. Artists now how the ability to control distribution of their material over the internet if they know how to do so, giving them complete freedom from interfering record companies and allowing them to collect full revenue while maintaining all copyrights. Another main aspect of this article is the realization that distances across the world and cultural boundaries have now become irrelevant because of digital distribution.
This has also made the interaction between fans and artists much more direct and accessible, as well as allowing for greater customizations in fans’ selection and even editing of music (some bands are openly giving consumers the means to create their own mixes of songs – although this technology already existed, the point is that such “copyright-infringing actions” are now dealt with much more liberally). The article states that this type of virtual interaction could be what Marshal McLuhan envisioned when he proposed the idea of a ‘global village’ on the world-wide web.
The next article, titled “The new radio’: Music licensing as a response to industry woe”, steps away from the theme of digital networking for a moment to examine another rising outlet for music exposure: commercial advertising. At times when the music industry becomes narrower and pop culture seems to dominate the airwaves, advertising agencies have gladly stepped in to offer struggling bands a chance for wide exposure and large amounts of money. In the year 2000, previously unknown artist Moby became a huge international success, receiving loads of airplay on the radio and selling millions of copies of his album Play worldwide.
This was all made possible when all 18 of that album’s tracks were placed in commercials, movies, and television shows around the globe. Currently, artists like Arcade Fire and Vampire Weekend have entered mainstream popularity predominantly through their songs being used in tons of television commercials. Similarly, another media being used by some bands to get their name out there is video games. Games like Grand Theft Auto, Saints Row, and especially sports games like Madden and NHL have all sparked the popularity of lesser-known bands through the placement of their songs.
This has all become possible because of the dwindling success of radio, as well as the genre dilemma of illegal downloading over the internet. Continuing with new technologies changing the landscape of the industry, another new player in music distribution is the mobile device. According to an article called “Mobile music, customer value, and changing market needs”, over the past couple of years, phones have taken on the role of “an ‘entertainment center’ for progressive user segments, the increased personalization of services, and the role of various models of payment for digital (including mobile) music. (Anderson, 2006) This is again piggybacking off of the failures of radio due to the shrinking variety of music being aired, and largely due to the growing popularity of illegal file sharing online. Seeing that this has been a growing trend in the industry, music companies have been looking to other outlets for distribution, and phones and other mobile devices have proved to be successful channels for doing so. The main problem with illegal downloading – in fact, the reason that this such distribution is illegal – is that it is in violation of U. S. copyright laws.
Some argue that these copyrights are severely outdated, as they have been around for hundreds of years, and are in need of being updated. Since the beginning of music, technologies have emerged which have changed the face of the industry. Every time this happens, copyright laws have had to adapt in order to keep up with the times. In an article titled ” Musical Copyright Law: Past, present and future of online music distribution”, R. J. Delchin argues that copyright laws are always delayed in doing so, and that this is currently the case with the file-sharing situation.
The industry has been irreversibly changed as this new technology has allowed consumers easier access to music. There is going to be no going back from this point, and agencies such as DMCA are going to have to adapt in order to keep up. The paper argues that the ways that agencies such as this try to hinder file sharing and online webcasting is not only hurting the industry (by making it very difficult for independent bands to get their name out, while glorifying already-popular mainstream bands), but that it is also ultimately ineffective in its goal of preventing such distributions.
This is because consumers no longer see these actions as immoral, although they are still illegal. Therefore, copyright agencies such as these should be loosening their copyright laws, rather than tightening them (which has been the case over the last few years). Another article called ” When creators, corporations and consumers collide: Napster and the development of online music distribution” investigates how this situation was brought to exist in the first place. In the beginning, it was Napster vs. “The Big Five”. The Big Five consists of the five major record companies, EMI, Universal, Sony, Time Warner and BMG.
The article proposes that the lawsuit that started between The Big Five and Napster was in fact the beginning of a much larger battle that still remains between the “New Economy” and the “Old Economy”. The New Economy came to fruition due to the so-called “Nirvana Theory” of the internet, meaning that there seemed to be a perception that the internet was a home for free exchange of intellectual property in a win-win situation where “creators of intellectual property will regain control over copyright while reducing barriers to entry and distributor interference in their productions. The Big Five, however, seek to control these transactions through a series of tracking, litigation, and anti-copying technologies. After their victory in the lawsuit against Napster, the Big Five now seeks to extend their control over the music industry to include these online and digital transactions. The article concludes by predicting the ways that this will be conducted, namely by issuing monthly flat-rate subscriptions that consumers will apply to in exchange for unlimited access to a governed online music library.
Another article, titled “Plenty to learn from Apple’s ‘near-perfect’ iTunes store”, examines what is probably the first and so-far only legitimate digital replacement of traditional music outlets: the iTunes Store. It basically just examines what the iTunes Store does and why it is so effective. It begins by realizing that in the past, record companies would basically force upon us what music we would “like” by controlling the airwaves and determining what was going to make it or flop. Now, however, in the age of digital distribution, freedom has been given back to the consumers to choose exactly what they want to listen to.
Whereas services like Napster and Limewire delivered on this premise and made the consumer very happy, it screwed the artist by cutting heavily into their royalties. Services like Rhapsody, on the other hand, and I did not know this, are controlled and operated by the record companies. Amidst all of these attempts to get a handle on the new musical distributing situation, Steve Jobbs has seemed to have creating an operating network that benefits both the artist and consumer, while leaving some for the middle-man (himself).
The iTunes store, with its bundled offers and 99cent songs and $10 albums, is a great template for how to package music and distribute it for a price that is affordable to the consumer while compensating the owners of the intellectual property. It is also very easy to use, with an interface that borrows heavily from Amazon and lightly from chains like Starbucks. Right now, the iTunes store seems to be the only real win-win out there for consumer and artist, and I’m sure Mr. Jobbs isn’t doing too badly for himself, either.
The last article named “Managing Pirate Culture: Corporate Responses to Peer-to-Peer Networking” explores how the major record companies, who are mainly the ones being hurt by peer-to-peer (P2P) distribution of music, are basically hypocritically reacting to the new era of digital downloading. The main issue behind digital music distribution, as we have seen, is that the labels and artists are not being properly compensated for their copyrighted property. Record labels blame P2P file sharing for the recent decline in record sales, while in reality there are many other reasons for this happening.
Using this as their platform, though, and by labeling file sharing with words like ‘piracy’ and ‘theft’, the major record companies try to demonize file sharing in hopes of softening its blow on their hold of their industry. But at the same time, they are also trying to find new ways to utilize P2P networking to their benefit. If they can find a way to control it, they will end the free and personalized peer-to-peer and artist-to-consumer interaction that is currently taking place and continue with their dominance over the industry.
The article also says that if there is anyone in this medium that can afford to take a blow to their massive cross-media profits for the time being, it is the major record labels. Critical Evaluation Through examination of the articles I found, it seems that pretty much all of the bases have been covered in terms of the “problems” proposed by new technology used in the placement and distribution of music. Most articles described the potential harmful effects of file sharing, being the loss of profits for artists and their record labels.
As it turns out, though, the artists are not really suffering as much as originally perceived. The new network options that are available actually open up new avenues for fan contact and relationships that was not available before, and most artists are in fact psyched about the opportunity to massively spread their content over the web. Local musicians, who were originally used by record companies as examples to gain sympathy for their cause of cracking down on file haring, are in reality benefiting the most from this aspect of social networking. We have seen the rise of this issue, beginning with the original suit against Napster by the Big Five record companies, and how these companies are using dated copyright policies to hold their case. This and another article suggested that it is the record companies that must change and adapt, and that the copyright laws in our country must once again be updated in order to keep up with the times.
We see other ways that musicians are now making their money — from the services that already exist for legal digital distribution such as iTunes, to other new technologies that have emerged in this age such as television and videogame advertising and mobile ringtones. Ultimately, it seems that the artists are going to do just fine in this new digital era, and it is the record companies who seem to have the biggest problem with the shift in power.
Surprisingly (or maybe not), I did not find one article that solely sympathized with the record executives. Every article that I found, including the ones that began by stating the case of the record labels and describing the threat that new technologies pose on them, ended up saying that their case against digital downloading was basically mute and that the copyright laws they use to fall back on may no longer be effective in this new age.
It’s kind of hard to sympathize with the record companies, when they are already the ones that hold the most legal and financial ground in the music business and they are essentially just the middlemen between the artist and consumer. This era of file sharing and P2P networking seems to be removing the need for a middleman, since fans are more directly in contact with and in control of their musical world than ever before. People like Steve Jobbs are now realizing how to step in as the new middlemen in the industry. Maybe it’s time for the old bosses to step out.