Over the last ten years or so, the music industry has gone through some significant changes. These changes are due to growing internet use and the influence that social media has on so many lives. According to Wikipedia, some of these changes include the rapid decline of CD sales, the creation of illegal file-sharing websites such as; Napster and Limewire, and the birth and growing popularity of certain social media networks; including Facebook, Twitter and Youtube. New social media networks have totally changed the way that the industry is run. An important question to ask is just who in the music industry is impacted by this change? All of these affected groups range from the concert promoters to the record labels to the artists to the vendors. However, in order to truly understand how the music industry at the present, one must first study the history of the industry to gain a better knowledge of where it once was.
19th Century
The music industry in the 1800’s was quite different. During this time, printed sheet music was the industry’s main product (2010). Publishers marketed parlor songs and ballads for use by private piano owners. These songs were published nationally and sheet music sales grew due to traveling music groups.
In the early 1880s, publishing firms gravitated around Manhattan’s 28th Street, known as Tin Pan Alley. Here, they excelled with the mass production and distribution of songs. Tin Pan Alley firms issued thousands of titles with hope that they would reach the nation’s public.
20th Century
Moving into the 20th Century, musical recordings entered into the market. Music completely changed with Edison’s invention of the phonograph. Sheet music publishers were eventually replaced by the “recording industry” as the music industry’s largest source of income.
In 1925, Colombia releases the first electrical recordings in the United States. This inspired other major music companies to follow suit.
By the 1980’s, six record labels positioned themselves at the top of the industry. These labels, known as the “Big 6” were EMI, CBS, BMG, Polygram, WEA and MCA. The eventual buyouts of CBS and Polygram led to the “Big 4” in 2004.
In 1984, the Compact Disc or CD, becomes the premium music carrier of choice and in 1988, sales of CD were higher than vinyl. Eventually, consumers begin to see the LP disappear from music stores.
Other noteworthy events that occurred in the 1990s include the introduction of the DVD, the explosion of the internet and the use of music piracy on the web using the MP3 format.
As the 20th Century draws to a close, there have already been enormous changes in the music industry. The industry saw a shift in dominance in revenue from sheet music publication in the 19th century to record sales into the 20th century. There was also a dramatic transition from vinyl recordings to CD to the digital transference of songs in digital format.
Now that a brief history has been given of the music industry, it is time to move into the 21st century to study how the internet and social media have impacted the modern world of music.
21st Century and the Social Media
We have now entered the 21st Century or the “Digital Age” as it is often referred. In this period, the world is introduced to a global connection known as social media; but just what is social media and how does it affect the world of music?
Andreas Kaplan and Michael Haenlein (2009) describe social media as an interactive form of communication that is highly accessible and easy to publish through. Some of these applications include Facebook, Twitter, Youtube and the once powerful Myspace. These websites serve as excellent outlets for local and national bands to post their music.
There are many advantages and disadvantages to social of media. One advantage of social media is great way to bands to engage their fans and network altogether. Bands can actually promote themselves through these outlets to draw fans as outside of their own country. Even the socially-irrelevant Myspace is still used by bands as the primary place to upload their music and can still be found in the top 5 results of a Google query.
As useful as social media may be for musicians, it also has many disadvantages. Although the easy access to music allows opportunities that bands would otherwise forgo, it has led to an over-saturation of bands in the market. Andrew Dubber, founder of “Quit Myspace Day” (2010), states that Myspace has "Every frickin’ band on the planet”.
Monte Conner, President of A&R at Roadrunner Records states, "Because there are so many bands out, they have to be very selective with who they will work with. In the heyday of rock and metal, A&R’s could sign any band and coach them; whereas now they must have their own sound and following” (personal communication, July 23, 2010).
The Digital Age and Illegal Downloading
Perhaps what is most responsible for bringing the world into the digital age was the transference of music files into mp3 format to share over the internet.
Although file sharing technology was introduced in the late 1990s, it did not really take off until the 21st century. The first of these was Napster, which was developed in 1999. The use of the illegal file-sharing software led to a lawsuit by the RIAA to and eventually forced the website to charge a fee for its services. Since then, other websites; such as Limewire have emerged and suffered the same fate (2010). Since the existence of the software, labels’ profits have dropped from $14.6 billion in 1999 to $10.1 billion in 2008 and are expected to drop to $9.2 billion in 2013.
With the loss of profits, bands have found a way to recoup their losses. Emerging ‘360 deals’ seem to be growing in popularity in a time of decreasing music sales. A ‘360 deal’ is when
a label receives not only a cut of an artist’s CD and digital download sales but also a percentage of event ticket profits, merchandise sales, endorsement deals and other artist-related products in exchange for promotion (Arrington, 2008). Warner Music Group CEO Edgar Bronfman states that his label requires all new artists to sign a ‘360 deal’ to prepare for free music.
Alternatives to Illegal Downloading
During this era of “free” music, many chose a more legal alternative, iTunes. Apple introduced iTunes in 2001 and according to a 2007 NPD Group MusicWatch report, iTunes is now the third-largest retailer of music in the United States with a 9.8% share of music sales. As a result, labels have to rethink their strategy for selling music. In 2010, Roadrunner released a compilation EP of a variety of artists on the label for the video game, God of War 3 solely through iTunes (2010).
Other sites have emerged to counter this movement. According to Ultimate-Guitar, one of those ironically actually allows music fans to download their favorite artists for free and it’s completely legal. The website is called Guvera and it’s an advertising-based organization. Users will have as much access to music as they want based on the quantity of surveys they answer.
Conclusion
These changes in the industry have definitely restructured the way that business models are approached. It seems that although artists thrived over the sales of their printed music and recordings for the last 150 years are now starting to approach the distribution of their recorded music as more of a promotional showcase for their live performances. Where labels are losing control in some areas, they are picking up more in other areas; specifically in making artists sign 360 deals. The future doesn’t look especially bright for the music industry but right now it is hard to predict just what will be the fate of the industry.
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