The recent evolution of the music industry

Thèmes abordés

Music industry - crisis - downloading - P2P - internet - changes - solutions

Résumé du document

Within the last twenty years, the music industry has experienced a world of change. Revolutionary technology has evolved almost every aspect of the industry, from the artist to the label to the publisher. Like other media industries, music has been forced to roll with these changes.So first, we 're going to give you a brief history and background of the situation, then we'll expose the different elements that led the music industry to these changes and we'll finish by giving solutions to face the current crisis.

Extraits

[...] In 2003, there were up to 60 Million file sharers using the Kazaa network. The small probability of being sued inhibits the effectiveness of lawsuits against file sharers. There are various file sharing systems increasingly used for illegal purposes with a growing number of users. A number of governments however, including France, UK, New Zealand, South Korea and Taiwan, have enacted legislation to require such cooperation or are in the process of doing so. Most countries currently use a “graduated response system” which basically means that copyright infringers get warnings, with graduated consequences. [...]

[...] It has led to the expansion of a new phenomenon : illegal downloads. Digital music distribution via unauthorized consumer peer-to-peer (P2P) file trading has become one of the most popular Internet activities throughout the world via unauthorized organizations such as Kazaa, Emule or Limewire. The term unauthorized refers to the fact that the music currently traded on P2P networks is not licensed by record labels and copyright holders, and under the law, is illegal. This is the development of the Renegade business model that resulted in the beginning of the end of traditional record sales so of the Traditionnal Business Model. [...]

[...] Customers were repurchasing select pieces of their music collections on the new formats. The CD conversion created great revenues for the labels without they had to do much work. But in the 21st century, consumers spent far less money on recorded music than they had in 1990s, in all formats. Total revenues for CDs, vinyl, cassettes and digital downloads in the world dropped 25% from $38 billion in 1999 to $27 billion in 2008. II)Record industry crisis So today, the market of the record industry is in crisis.The main cause is the digital revolution. [...]

[...] So the negative point is that labels are becoming less and less relevant for them. More people want to access music, whenever and however it is most convenient for them at that point and time. The easiest way to do this is to provide services that allow full access from a wide variety of devices.So now the good point is that it's a clear evidence that exposure to music piracy actually played a role in pushing records labels to innovate more than they used to, to compensate their losses caused by the digital revolution. [...]

[...] Many small suppliers have gained more traction through internet distribution. Even if there are just a few dominant suppliers (major labels), their product offerings are becoming less and less differentiated as independent labels are able to deliver comparable product and compete with distribution by means of the internet. More buyers today can get their music from a wide variety of different suppliers, and can change from supplier to supplier without any switching costs. Thereafter, the bargaining power of customers has gone from low to high. [...]