Will E-commerce save the music industry?

Résumé du document

The dematerialization of the consumption is the main factor: With the development of internet and MP3 formats, CDs are becoming almost obsolete and consumers are more disposed to consume music through those forms. The consequences of this phenomenon is that revenue are decreasing for the all value chain (the average price of an on-line album is 9,99€ whereas CDs are sold around 20€). But the more dramatic consequence is that is now possible to have access to “free” music by illegally downloading it, which is even a more loss of revenues for the music market actors.

The economic crisis is a second factor: because of the economic crisis which has hit the world since 2008, households are rationalizing their budget and so, they spend less money for leisure and culture, which affects directly the music industry.

Extraits

[...] A market in mutation: Sales of recorded music by market in value 1. [...]

[...] Internet help the artist to reduce their cost of making music and sell music. Music has gone to a completely digital format, and consumers are better off. Artists are too. Admittedly, record labels still have a big hold on how to use technology to develop their business, but executives are learning how to quickly adapt to a new kind of consumer. The influence of the internet of the music industry has forced many old-timers to change their frame of thinking regarding how to use their property and clients to continue making money and stay on top of the game. [...]

[...] Users can also give positive or negative feedbacks to the suggested song list. When selecting the song, there are over 400 music attributes., which are regrouped into a larger category called focus traits. There are 2000 focus traits, for example, displayed instrumental proficiency or vocal harmonies, etc . Mobile music apps: another booming trend With the fast growing trend of smartphone usage, mobile music apps has become a way accepted and welcomed by more and more people. Figures showed that many people use mobiles mainly to download ringtones, ringback tones, full track downloads and music streaming. [...]

[...] Traditionally, recording, marketing and distributing an album is the process of music companies to make their money. Artists actually make less on an album sale than the record label does, because the artists sign contracts with the music companies. The contracts state that the music company will pay for the production of the album, so it make it reasonable that the companies will reap their returns from the album sales. But it is quite unfair because a recording artist would receive very little residuals for their effort. [...]

[...] If they adapt to this trend quickly & smartly, they will eventually enjoy growth again.[4] Conclusion Mobile devices with powerful functions, as well as other devices accessible to the Internet, are influencing the business model of music industry. Music industry is facing a transition period. Old-fashioned products and services are abandoned by users gradually, while new ones haven't been developed maturely. Music industry is searching for new ways out with strong motivations and creative innovations as “cloud music” will come to reality sooner or later. Thus, e-commerce will surely have impact on music industry in a positive way. [1]Source : XERFI [2]Source : Xerfi [3]Source : Xerfi [4]source: www.pewinternet.com 2. [...]