Music & Technology: How technology has affected the production, consumption & distribution of music today
Olanda Cherie Low May Foong (firstname.lastname@example.org), 1st Year Student, School of Business, Singapore Management University (SMU)
The music industry is on the verge of collapse and this is due to the advancement of the digital age and technology today. This review paper will explore the issue of how the revolutions of the latest information and communications technologies have affected our music industry today. In particular, I will be looking into how they have affected the production, consumption and distribution of music, whether these technologies are a good replacement for the traditional ones we have had in the past and its future economic and legal implications on the music industry.
Music technology today is a disruptive but essential change and there is no doubt that the functionality of music industry has transformed and transitioned the past 30 years. Technological advancements, such as the Internet and new music software have definitely changed the way songs are being produced, marketed and distributed today. These advancements have definitely eased the time to produce and consume music and have also made music more accessible in our lives through distribution channels such as YouTube and Spotify. (The Express Tribune, 2013) Nevertheless, this has brought about economic and legal implications on the music industry and theyseek to threaten the traditional industry that was once dominating. However, there have definitely been ways and solutions to ensure that the economic aspects of the industry are not compromised which this paper will discuss.
2) Historical Perspective
2.1) How music was produced in the past
In the past, instruments such as the piano and violin were used to produce music, where artistes and composers had to either write score sheets or compose by. E.g. Beethoven. Later on, artistes and bands moved on to record music in a studio or tape and this involved massive costs and only a few of artistes who were on record labels could afford them. Moreover, a producer and a studio engineer had to be present during recording. (Price, 2012)
2.2) How music was consumed in the past
For the past 50 years, consumers could only listen to music in two different ways: on AM/FM radio or purchasing pre-recorded music in formats such as CDs, vinyl and cassettes etc. According to Yeh (2011), by 2000, CD sales in the United States had exceeded 785 million albums. (Tyler, 2013) As such, this meant that billions of digital songs that were encoded on CDs had managed to get into the hands of hundreds of million people (Price, 2012) However, this meant that music could only be listened to using hard physical players, which was inconvenient and bulky to carry around.
2.3 How music was distributed in the past
Most CDs and vinyl were sold in brick and mortar CD stores, such as HMV, where people had to make a trip down to purchase their music. At the time, the social media had not become revolutionary yet, hence the only form of distribution of music would be through newspapers and word of mouth.
3) Current Situation
3.1) How music is being produced today
Technology has adversely affected the way music is being created and produced today. In the past where one had to spend massive amounts to record music in studios, the emergence of cheaper sources of technology today has allowed artistes to record albums at high quality with professional production values. For example, Garage Band, Audacity and the latest Apple Logic Pro X. (Apple, n.d.) Audacity is a free open source software which allows musicians to record and edit music tracks on the computer. (Vagueware, 2013) In addition, the use of auto-tuning software, which performs the exact same purpose as music by smoothing flat or sharp notes to make them perfect pitch has been popularized in the industry today. As mentioned by Daniel Griffiths, editor of music recording magazine Future Music, it’s mostly used in 99% of recorded music today. (Savage, 2010)
3.2) How music is being consumed today
With the growing proliferation of the Internet platform today, we are increasingly seeing more people consuming and listening to music digitally. People are now sharing music online and offering free downloads. While people had to purchase a complete album in stores in the past, they can now choose the ones they prefer online (E.g. iTunes) and purchase it at relatively low costs of US$0.99. This gives consumers more control over the ownership and portability of their own music collection. (NY Daily News, 2013) This has also inadvertently affected the total CD album sales in stores, as it decreased by about 250 million by 2009. (Tyler, 2007) However, despite the ability to now purchase music online, streaming music online would be here to stay, with the rise of companies such as Spotify and Rhapsody that are going strong. According to Billboard, with Spotify, it takes approximately 64 listens to be equivalent to one 99 cents ITunes purchase. (Huffington Post, 2011) Hence,it is much more worth to access a greater variety of music through streaming channels.Not forgetting, the increasing amounts of illegal downloads consumers have been involved in, through services such as IsoHunt and Torrent, which only serves to compound this impact.
3.3) How music is being distributed today
As less people are buying physical releases (CDs, vinyl etc.) and purchasing more digital downloads today, it has seen a change in the distribution of music. Conventional music stores such as HMV and independent record stores that once used to be the source of distribution of music are now suffering as more people are now consuming music through social media distribution channels such as iTunes, YouTube, Napster, just to name a few, instead. According to Farnham (2011), music record stores saw a revenue decline of 76% from 2000-2010 and it is estimated that this may drop another 77.4% by 2016. Many artistes are now also promoting their music through the social media in order to also target a larger group of audience. After the release of the album Clarity Live in 2009, indie artiste Jimmy Eat World was able to get 20% of record sales straight from Twitter just within a month. (Houghton, 2009) Hence, there is a paradigm shift in the way music is being distributed today- from physical to digital platforms.
3.4) Legal Implications of music piracy
Traditional labels such as Sony Music Entertainment, Universal Music Group and Warner Music Group are still attempting to extend their control and income by suing music fans for copyright infringement today. In fact, they are creating more difficult contract arrangements between record labels and artistes, which require artistes to give up even more of their copyrights, while providing less value. (Smith, 2012)
Due to the threat of Napster, there have been attempts to combat the proliferation of illegal copying and distribution of music files digitally through litigation efforts in the early 2000s, and it had been successful. As a result, many of the largest and most successful P2P networks that offered permanent download services were shut down. (Tyler, 2013) However, over time, young and aspiring entrepreneurs and software developers recognized the shortcomings of these networks and created new file sharing services that were more problematic for record labels and copyright owners to track, but more streamlined for the users. As such, it became apparent that the outcomes of lawsuits against them would be uncertain and it would be very costly to sue these companies for infringement.
4) Future Implications
4.1) How future technology might affect music
One emerging technology that is being incorporated into artist’s music and performances is the use of hologram. Holography is all about 3D images that have been projected and captured on a 2D surface and is said to tremendously change the music industry. This is seen during The Coachella Festival in 2012 where dead legend rapper, Tupac Shakur, materialized on stage to perform alongside Snoop Dogg which definitely wowed the crowds. (Kaufman, 2012) By exploring holographic technology and incorporating it into the music industry, it provides a whole new way in bringing the performance to a higher and more interactive level.
Such technology may help to proliferate music by helping to transmit the underlying message of music to audiences more effectively. Such technologies like hologram enable music and dead artistes to come to “life” and connect audiences together.
While the bad news is that artistes may now find it hard to promote their songs through the traditional way, the good news for them is that there are much more opportunities for them to promote their songs and get it on the Internet through licensing in future. (Rabhan, 2013) Internet outlets are now creating exclusive contents and authorizing music exclusively for online usage. For example, artistes can now have their songs placed on a Hulu original series and even to a series on Netflix. (Rabhan, 2013) Within the next 5 years, YouTube is going to undergo a huge makeover and only the best quality content will take over. YouTube definitely has huge potential to become the go-to platform for creating business media in the next 5 years, which means new start up artistes need to start developing lists of outlets and shows online and start to get placements on network programmes. (Rabhan, 2013)
Currently, there are many advertising opportunities on YouTube that allow companies or artistes to advertise their brand and product. An example would be TrueView In-Stream, which has become gradually well received over the last 3 years. (Tompros, 2012) In-Stream advertising is a pre-roll video, which is presented to viewers before a video is being watched and focuses on the basis of targeting those who are interested contextual targeting and interest targeting. In Stream ads only costs an average of about $0.04 each and a few hundreds of advertisers are using TrueView In-Stream. (Tompros, 2012) Hence, artistes could perhaps use this platform to advertise and promote their music to ensure the public has access to their music.
4.2) How future technology can affect artistes
The advance in technology will continue to benefit new and upcoming artistes that have been unheard by the public. Given the fact that consumers have more access to music on social media, such as YouTube and Spotify, artistes can make use of this to promote their music and gain new fans. For example, just at the age of 12, Justin Bieber posted homemade videos of himself on YouTube, which got the attention of R&B artist, Usher. Eventually, Justin Bieber was signed to Island Def Jam Recordings and his release of his first single, “One Time” had garnered positive reception all over the world, making him an immediate young pop sensation. (Humphrey, 2009) Today, Bieber’s name is a household name and it is due to YouTube that has played such a huge role in his success toady. Following suit in his footsteps are artistes such as Charice, Conor Maynard and Greyson Chance, all of whom are making it big in the music industry today. As such, it can be seen that social media channels are a huge starting platform for amateur singers to showcase their talent, and eventually win the attention of big music stars to be their mentor and make it very big in the industry.
4.3) New Avenue for talent scouting
Having achieved positive reception through social media, it has spurred co founder of Def Jam Records, Russell Simmons, to launch a new label, which will be centered on YouTube. It serves to incorporate, find the talent and use YouTube to promote and develop new artistes to their own channels. (BBC Newsbeat, 2013) Hence, it is seen that the social media definitely plays a very crucial role in discovering new talents and artistes in the future and will bring tremendous economic benefit to music companies and artistes in the long run.
4.4) Benefits to consumers
Consumers today have access to a wider variety of music, and are not limited to those in a physical store. Consumers play a very important role in facilitating the type of music that artistes and musicians should produce in the industryas they create the demand for it. This in turn puts pressure on artistes to continually produce songs that are of top quality and high standards. As such, this creates stiff competition amongst individual artistes, filtering out the less popular artistes and promoting the better ones.
4.5) What it takes to succeed in the music industry in today’s era
Today, CDs, vinyl and cassettes that once used to be a niche music market, seem to be a thing of the past; and is rapidly being substituted by the Internet and new technologies. It appears that society is only going to see a continuous shift from ownership to increased accessibility. According to Kot from Chicago Tribune, he mentions that the traditional approach can still work for a certain type of artist, but the pool is diminishing. No doubt that streaming is the future. (The De Mello Theory, 2012) Basically, to prosper in the Music 2.0 economy today, artistes would have to rely greatly on the digital medium to discover new and innovative ways to connect and interact closely with their fans. Take for example, Lady Gaga. She has managed to rely on one of the primary obsession of our age-the changing nature of the self in relation to the ever-expanding media platform, and uses this to her ability to always showcase her personality and openly portray what Gaga calls ‘the fame’. (Ann Powers, 2009) Her unique and artistic videos have helped to define her quirky personality, where she is better able to relate to her fans. Moreover, the way she dresses up in unconventional outfits is her way of expressing her various personalities to get the attention of her fans.
Therefore, artistes and label companies could maybe start being creative and work towards earning attention and loyalty of fans rather than their money, since consumers do not purchase music like before After all, it is the artiste who havethe power to determine which one of them survives today. Crowd sourcing is now the new artiste and repertoire (A&R) and everybody gets a shot. The only main challenge for artistes is to compose music that brings about personal and meaningful connections that consumers can relate to, which is why performers are starting to put emphasis on the quality of their performances.
4.6) Will music record shops survive in future?
There has been an on-going debate as to whether music record shops such as HMV will be able to survive digital music. Based on statistics, just 567000 (0.3%) of the 189m singles sold last years were physical CDs while digital downloads made up about 97%. (Neate & Thomas, 2013) Despite HMV’s inability to profit from selling physical records, many independent record shops on the other hand are doing financially well and rising in the market due to the high demand and the continual popularity of vinyl. Rough Trade, a chain of three London shops in East London, has reported that business is the “best it has ever been” in the company’s 36-year history. Sales had increased by 8% in the latest quarter and the company is in the process of expanding its outlets. According to Garvan (2013), there is something intrinsicallynostalgia about vinyl recordsnow and retro culture is nowbecoming popular with lots of people. More independent record stores are beginning to work towards creating a rejuvenated smaller and more sustainable HMV to encourage consumers to shop for physical music. Record stores, such as Record Store Day, has been incredibly important as a catalyst for the resurgence of vinyl records (Garvan, 2013) and are releasing hard-to-find limited edition albums to cater to music fans as well as encourage them to support their stores. This has been a driver of growth for vinyl sales, and though it only makes up a small component of the music market, indie stores are creating new and exciting initiatives which will continue to support and break new talent in the music industry in future.
4.7) Can record labels and artistes survive the challenges of music piracy?
Currently, the music industry makes up of several key players, mainly, songwriters, artistes, record labels and consumers.
Record labels, Artistes & Songwriters-an introduction:
Record labels play important roles in the music industry, by acting as the intermediate bridge between songwriters and recording artistes. Their operations include music recording, music publishing and marketing. While music recording involves the actual production and recording of music, music publishing on the other hand is the marketing of songs and music catalogs. Songwriters will provide their final songs to music publishers, who in turn get recording artistes to record the song.
However, not all efforts to combat piracy have failed. Recent innovative efforts by successful artistes serve as an example of how embracing new forms of technology and recognizing changing consumer preferences can help to combat the music piracy epidemic. An example would be Radiohead, a band who released their seventh album as an Internet download through the website. The album was offered free of charge but the band invited their fans to pay whatever they felt was desirable for the download. From this, Radiohead not only enjoyed extensive positive publicity of their album, butalsogarnered an average of about $2.26 per album, more than what Radiohead would have made in a traditional record label. (Tyler, 2013) Hence, it is seen that they are recognising the changing landscape of music and are tapping into new platforms that help distribute their music. In fact, they are capitalising on exclusive opportunities to get in touch with their fans and consumers in ways that promote positive advertising.
Given music piracy is on the rise, it is inevitable that record labels will be most affected by this problem. This is due to the technological advancements that increase accessibility of music online and efficiency of artistes, therefore, making record labels obsolete in today’s context. Instead, more efficient digital platforms are being developed to connect artistes and consumers together. The Internet is now one of the lowest cost mediums where artistes can simply create websites and channels at the touch of a finger and share their music online easily. Through this, we can see that record labels have faced an almost impossible task to combat illegal music downloading as it is becoming cheaper, more convenient,and morally and socially acceptable. As discussed earlier, given that artistes are beginning to understand how the music industry has changed over time, record labels should also follow suit and realise that it is only by embracing new technologies and modifying marketing efforts to support consumer preferences that will lead to higher revenues and greater effectiveness of overcoming the challenge of music piracy.
4.8) Stepsrecord labels can undertake to revitalize industry
Expanding businesses of concerts
Given that CD sales are on a decline today, record labels can perhaps move towards expanding their business scope to holding concerts. Many people today are attending more live concerts and this is starting to make up the largest percentage of earnings of artistes. According to Edgar Bronfman, CEO of Warner Music Group, the music industry is expanding much more significantly than the record industry. Musicians are now receiving 2/3 of their annual income from concert tours while the remaining 1/3 is earned from record music sales. (Elert, 2011) Given that the demand for concert tickets has been rising over the years, it is no doubt that this is a driving economic force for the music industry. Therefore, it is certainly a valuable asset, which record labels, can work towards by marketing concert tours and expanding their business scope towards this direction. This can be done successfully through the use of social media platforms, such as Twitter and Facebook, to raise awareness of the bands and increase popularity of them.
Technology today will not only continue to create a relentless personalization of music experience but also create new business opportunities. The monopoly that record labels had in process of discovering, developing and promoting music has been disrupted and it is inevitable that the advancement in technology will only continue to dominate the way music is being produced consumed and distributed by individuals in future. Technology has provided a big platform for us to share music and files easily and is the basis for music industry to use as a facilitator to succeed in future. What we artistes and consumers of the Music 2.0 revolution today have to do is do away with the traditional ways of the music industry, rewrite the rules of ownership and start embracing the shift and gain new fans in order to survive and thrive in the music industry.
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 This paper was reviewed by Chua Wen Bin and Chandan Partab Mansukhani