Music Industry Work
Analyse changes in technology and global communication that have revitalised the music industry in the past ten years. Your account should concentrate on cultural and promotional aspects rather than an analysis of the music. How might you apply these innovations to your own field of work?
The last decade has witnessed a period of rapid change in technology and global communication. In music, the Ipod has changed the way we buy and swap music. I tunes has just sold its billionth song. The rise of the Arctic Monkeys is almost directly attributable to the internet and sites like MySpace, where teens can spread trends in an instant. All this is happening while many traditional channels struggle to keep pace.
When the Arctic Monkeys hit number one, the newspapers were left saying where did they come from? The four big companies that dominate the production and distribution of music, Universal, Sony, BMG, Warner and EMI, have been slow to embrace the internet, which has seemed to them not an opportunity but their nemesis.
Rather than putting their product on file-sharing applications, they are prosecuting free-download users for theft, but now they are left with no opportunity but to welcome the digital age ahead.
All it takes to get the music you most love is to find a website such as Rhapsody, Itunes Store, Urge, Rapster, or any one of what is probably a thousand such, download, and transfer to an MP3 player. Hours and hours of portable music, and unless you want to, you never have to listen to two songs by the same group. A wonderful innovation for the music loving public, The Kinks are still being worked out by the music industry. But one thing is clear. The Digital Music age is here to stay.
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Over the last ten years album sales have been in freefall all over the world. The 10% drop in the UK over the past year is dwarfed by a 15% slide in the US, 25% in France and 35% in Canada. The bankruptcy this summer of the CD retail chain Fopp, HMV’s announcement that its profits halved in the first six months of this year and Richard Branson’s recent decision to dump the Virgin Megastores, which have reportedly lost him more than £50m in 2007, are all evidence of the revitalization of the music industry.
The point isn’t just that people are buying fewer CDs; they are paying as much as two-thirds less in real terms today for the music they listen to on their iPods than they used to when the compact disc first took over the market. Twenty years ago a chart CD cost about £14. Today you can buy the same in a super-market for £9. The online market may have grown recently, but not enough to fix the hole. Here, too, margins have shrunk. A download of a single track now costs 79p against the £4 a CD single cost in 1999. The impact on the bottom line of the record labels has been catastrophic.
When EMI’s subsidiary Virgin put out the Spice Girls’ debut album in 1996 the company cleared roughly £5 in profit on each copy sold. That margin has since shrivelled to around £2, and only then for albums that are significant hits. Industry insiders estimate that only one of the new British acts that became popular in 2007, the pop star Mika, will actually make his record company any money.
When the private equity firm Terra Firma bought EMI recently it paid about a third, in real terms, what the company nearly fetched 10 years ago when a sale to its competitor Universal was mooted. That decline mirrors what has happened over thesame period to the retail price of new CDs, and it also reflects the scale of the cull ofEMI’s workforce, which has shrunk in 10 years from more than 10,000 worldwide to about 4,000 today. There are no obvious solutions in sight. In America the recently appointed co-chairman of the Columbia label Rick Rubin, formerly a record producer by trade, has spoken of his ambition to turn the company around by refocusing it along the lines of a cable TV business, making Columbia’s entire catalogue downloadable to customers who pay a monthly subscription.
The reprioritisation in recent years of live music over the recorded variety has been dramatic. Attendance at arena shows rose here by 11% last year. By the time 2007 bows out, 450 music festivals will have taken place in the UK. Ticket-master reported that 20,000 tickets for the Spice Girls’ first reunion concert at London’s O2 arena in December sold out in 38 seconds, with 1m fans registering to buy. more than a million clamoured for seats at the forthcoming Led Zeppelin reunion.
Glastonbury disposed of its 135,000 weekend passes for this year’s event within two hours, taking more than £21m in the process. Ticket prices, especially for A-list artists, have soared as the price of CDs has tumbled. You could have bought Madonna’s entire catalogue for less than half what it cost to see her perform at Wembley Arena last summer where the best seats in the house went for £160.CD’s are almost a thing of the past. With more & more people downloading and sharing MP3’s, both legally and illegally i.e. Limewire, the music recording business is faced with a huge problem. Technology has advanced far quicker than the Music Industry’s ability to change and keep a viable business model.
Downloading of MP3’s illegally has caused such a massive drop in sales that the music business in general is at a loss to provide a solution, and thus is failing. In my opinion, to suggest CD’s are almost redundant is not unreasonable. The marketing power and speed of the Internet now means users are aware of the product long before the record label is promoting it locally and nationally. With the connection speed of broadband Internet, users can have almost any desired song in seconds (and if prepared to break the law, for free). I can’t see the music business trying to fight this type of technology for much longer, as file sharing is not actually an illegal activity, as no cash is exchanging hands.
Already deals are being announced to allow users to legitimately download songs and for a fraction of the cost of a CD single. Recording labels will have to start to offer subscription services, or small download fees per single in order to quell the hugeamount of customers currently downloading for free.The roots of the “Rip, burn and mix” (RBM) culture have been growing for a long time now. The “RBM” culture represents a powerful change to the business world as a whole and to the music industry in particular. The change in delivery method is at the heart of the “RBM” culture. To begin with it can be described from the music industry’s standpoint.
Now consumers have much more control, and because of each individual’s ability to rip or copy, burn or produce, and mix or change music, the term consumer fails to capture the essence of the user’s involvement. As is apparent to everyone, this has thrown the traditional music industry on its head. In retaliation, there are battles being waged against people who have accepted the changes, the traditional consumers. Of course, as has been well documented, these battles are being fought with copyright laws that have failed to accept great change since the explosion in popularity of the internet.
Questions about how this affects the individual artists and bands who rely on selling their music for an income must be addressed. First, within this culture there is still the possibility to sell records based on the traditional methods. The RBM culture has had a great deal of influence in this area of style as well. It can be viewed as a type of fusion. Everyone now has the opportunity to take what they want from a culture and fuse it with their own culture, which to many is what creativity is. Rap music is a definite example of “RBM” culture in music.
An artist may take a track from another song, mix it with their own work and then produce it as a new style of music. Without conscious effort, millions of people have already accepted this culture and moved towards the empowerment of the individual artist. It is especially apparent in the popularity of collaborations between artists. Artists each bring their own work to the studio or stage and seek to mix, “burn” or create an entirely different piece of music.
A closer look at the music industry from the perspective of a RBM culture reveals that the principles which are at the base of the culture are not revolutionary. However, technology has changed the scale on which these principles can be implemented, thus giving birth to the RBM culture and the vast consequences it has for the music industry.
There are many unique ideas on how music should be shared and subsequently handled. An artist listed under the simple Sampling License allows the user to manipulate and change the music for their own or commercial use; however, entering it on a file-sharing network is prohibited. The Sampling-Plus License works in basically the same way except the music can be entered on a file-sharing network.
The “rip, burn and mix” culture coincides with many other changes in the way people think about purchases and commercial entities. The ClueTrain Manifesto is a series of essays that deals with changes in consumer behaviour because of the Web. The Manifesto discusses ideas that need to change in the business world due to the changes in consumer behaviour. People now expect to try before they buy and buy only what they want to buy.
Requiring the customer to buy fifteen songs when they only want one has become unacceptable; Furthermore, the limited variety of music that a company has to offer is unacceptable. With such easy access to seemingly endless variety, the old music industry lost one of its key competitive advantages. To be fair the industry is starting to recognize the need for digital music and has been quite successful operating with Apple’s iTunes technology. It may be too little too late but it has stemmed the tide of change for the large media companies to an extent.
With all these changes taking place, it is interesting to speculate about the path of the next musical superstar or if there will even be such a concept. Everyone having access to a personal computer means that everyone is eligible to do their own recording, publishing, distributing and venue booking. Even with all this technology, a live show is still a unique experience that can only be captured by physical attendance. Excellent artists will still be sought out to play live music which will allow them to sell their products to support themselves.
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This process is very important even in the new music industry where everyone can be heard. The reason for its importance is the fact that a live band can carve out its own niche using the extremely effective word of mouth advertising. Unless the consumer knows an artist exists it can be extremely difficult for a consumer to find and hear that artist among all the other choices. Live touring would still be an effective medium for a band whose quest is to reach a certain degree of fame. However, there is also the possibility for a band or individual artist whose sole medium is the web.
Video and audio technology could be combined to produce a “virtual stage” for the artist to perform over the internet; a distinctly new technology artist. This could take many different forms but, again, it takes advantage of the increased scope of the artist. The artist has the great opportunity to perform virtually over the web, satisfying both the fan and the musician.
The Web will also act as a tool between the musician and the fan. An increase in interaction between the two might birth a new form of musical partnership. The fan might have an idea or a poem that they want made into music. Certain artist may be interested in catering to this desire to have one’s work made into music. Without a doubt, fans have been able to interact and learn more about their favourite bands because of the web. Websites would then act as virtual clearing houses by matching song writers with those who play music but are not interested in writing their own.
One interesting idea that someone working in the industry could consider is that labels may only be willing to pay the artist to produce one or two songs for air play and sale.The “Rip, Burn and Mix” culture may be the end of the traditional album as it has been. If songs are available for free or are sold separately for a dollar, the experience of listening to a number of songs as a coherent work will be lost. But the artists may adapt to this new culture and change the way in which they release their music. Rather than one album with twelve songs on it released at one time, the artist could release one song each month for a year. This method could stimulate interest from fans as a continual stream of music over time.
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