R&P Post 14: The Music Industry Today

Hello and welcome back to my research and planning blog!

How has the internet affected the music industry? 
According to the IFPI's (the International Federation of the Phonographic Industry) 2016 Global Music Report, digital music sales contribute 50% of industry revenues whilst physical sales only represent 34% of industry revenues. However, prior to the 21st century, people would buy music rather than stream or download it online because the internet, or to be specific the World Wide Web, was not invented until 1989. People would go to record shops to buy CDs or vinyl records, unlike nowadays when people can stream music directly from the internet at home for free.

Diagram representing the change in how people now access music.

It was at the dawn of the twenty-first century that saw the rise of digital technologies which have has such a huge impact on the music industry. For example, worldwide sales of CDs, vinyl, cassettes and even digital downloads fell from $36.9 billion in 2000 to $15.9 billion in 2010, according to IFPI. The 2000s saw such a change in the music industry that artists now rely on live performances and selling merchandise (e.g. T-shirts, sweatshirts, accessories such as wristbands, scarves and hats, etc.) for the majority of their income, whilst only making a handful of pennies selling their CDs and records. Thus, as a result of this, music artists have also become very dependent upon music promoters, such as Live Nation which is American global entertainment company that dominates tour promotion and owns many music venues.

However, whilst this dependency on music promotion companies can be seen as a positive, as it enables music promoters to continue their businesses, this change in technology has badly affected record and CD shops all over the world. Because many people now stream or download their music online, sometimes illegally, and because they do not usually have to pay to listen to the music they want, this has led to a rapid decline in the number of record/CD shops on our high streets. Prior to the 2000s and the rise of the internet, people were only able to listen to music by purchasing records or CDs from independent record shops, or by listening to the radio and watching TV (take the TV show Top of the Pops for example, which ran from 1964-2006); but the majority of people would buy their music from record shops. However, this is no longer the case due to the internet and the vast majority of independent record shops have now closed down. Even large retail record stores have gone into decline, for instance HMV which is a large entertainment company that sells vinyl records and CDs, as well as video games, films, etc. which has been operating since 1921, was taken over by lawful administration in 2013. A few months later it was brought out of administration but fewer stores exist today than in the twentieth century, with all HMV Ireland stores closing in the same year. The fact that these much larger record stores have been forced to close down several of their stores shows some of the extent of the impact that the internet has had on the music industry, as well as showing why so many independent record shops have had to close.

Music Downloads and Streaming Online:
Nowadays, people are able to access music online by either or by both downloading the music they want or streaming it. By downloading music, you have a permanent copy of the song(s) or album(s) you have chosen, meaning that you can play it as many times as you want to. With the invention of the World Wide Web in 1989, more and more people began to use the internet from the mid-1990s into the 2000s, and from then onwards music began to move online. With companies beginning to recognise this shift in how people accessed music, they began to change how they operated themselves, in order to match this change in technology.

iTunes was created in 2001 by the American multinational technology company Apple. iTunes is an application used to play and download digital downloads of music and video, as well as other media content including podcasts, audiobooks, etc. On iTunes, users purchase whichever song, album, etc. they want for a fixed price and it then downloads onto their digital device, e.g. an iPod Touch or an iPhone. When it was first introduced it proved to be popular with music fans because they were now able to buy just one song rather than having to buy the whole album. Yet this again did not have a wholly positive impact on music artists because they were now receiving less profits for their work. Whilst iTunes still provided the downloads of music for a certain amount of money, it could be argued that its creation marked the beginning of the decline of music sales in the industry.

This is because today people are not willing to buy music when they can simply listen to it for free. Consequently, today very few people use iTunes and artists , in similarity to the sales of physical music, like CDs, will make just a few pennies from iTunes downloads. However, the online American company Amazon has employed similar strategies to iTunes and customers are able to buy digital copies of albums from their favourite artists. As well as this, the company has created a new platform specifically for music streaming services called Amazon Music. Amazon Music is an online music store, music streaming platform and music locker operated by Amazon. Whilst it enables its customers to buy physical copies of music, e.g. CDs and vinyl records, it also sells digital downloads of music and provides a music streaming service, demonstrating how it caters for a wide range of different audiences- from those who prefer physical copies of music to those who would rather stream their music online.

On the topic of streaming, Spotify has become one of the world's most popular music streaming services since its launch in 2008. Spotify is a music, video and podcast streaming service that provides a freemium service for its users. This service includes basic features with advertisements and limitations. However, there is also a premium service offered through a paid subscription which provides additional features and a higher streaming quality. Spotify is also available on the majority

of technology devices including smartphones, tablets and Windows and macOS computers, making it accessible to a huge range of audiences across the globe. In June 2017, Spotify was reported to have over 140 million monthly active users and more than 60 million paying subscribers in July 2017. From these statistics you can see the extent of Spotify's popularity with its audiences and just how many people stream their music via an online application rather than buy physical copies or pay to download it. Yet in spite of this, Spotify alongside the music streaming industry in general has faced criticism from artists claiming that they have not been fairly compensated for their work as music sales decrease further and music streaming rises. With physical music sales or download sales, customers pay a fixed price for each song or album that they purchase, but with Spotify, they pay artists based on their 'market share' which is the number of streams that they receive for their songs as a proportion of the total songs that they stream on the service as a whole. Spotify distributes around 70% to rights-holders who then pay artists based on their individual agreements or contracts. It has been reported that on average, Spotify pays $0.006 to $0.008 per stream to an artist. Once more this shows that although audiences today much prefer to stream their music online, usually for free, the services they use to do this barely benefit the artists that they listen to, making hardly pennies for their music sales in the form of online streaming.



On the other hand, some companies such as Kickstarter are trying to encourage and support independent music artists to produce music through fans/audiences funding the artists that they want to listen to. Kickstarter is an American corporation which maintains a global crowdfunding platform that is focused on creativity. It has received over $1.9 billion in pledges from 9.4 million people to fund thousands of creative projects, including films, music and video games. This model is related to the subscription model of arts patronage where artists would go directly to their fans and audiences to fund their work. Because of this, many new and upcoming music artists no longer see a record deal as a vital part of their business plan or career. Recording hardware and software can be purchased by independent artists themselves at a cheap price and enables them to record music simply on a laptop in their bedroom or at home and then distribute it to a worldwide audience over the internet. Yet although this is good news for artists, this has caused problems for recording studios and their producers, as well as record labels because now artists can be completely independent, there is not necessarily a need for these companies.  But then this has benefited another part of the music industry at the same time because companies selling music recording hardware and/or software such as Apple have significantly increased their profits due to more and more people now buying these products.

SO...in conclusion:

• Music artists today rely on live performances and selling merchandise to make money. 
• Artists make very little money from music sales, both physical sales of music, e.g. CDs and vinyl records, and online downloads. 
• Online streaming of music is the most common way that people listen to music and often they do not have to pay for this service. 
• This has caused many record shops selling vinyl records and CDs on high streets to close down, both independent and large corporations.
• Some companies, like Kickstarter are trying to help independent artists make a living and a career by getting fans to fund the artists they like. 
• Independent artists have begun to buy their own cheap recording hardware and software and to produce and distribute their own music at home. 
• This has meant that record studios, record producers and record labels have started to go into decline. 
• Overall, the internet in one way has made it easier for artists to distribute their music but has also meant that they are paid much less for it. 

I hope you found my research interesting and hope to see you again soon!