The Internet and How it is Affecting The Music Industry

by jph60312345 (student)

University Degree Business and Administrative studies

Student Number: 9014683

Course: Popular Music and Record Production

Title: The Internet and How it is Affecting The Music Industry

MPM100 – Understanding the Music Industries

Assignment 2 - Contemporary Music Business

Table of Contents:-

Summary -2-

Introduction and Methodology -3-

1.0 SWOT Analysis Grid -4-

2.0 Strengths -5-

3.0 Weaknesses -6-

4.0 Oppurtunities -7-

5.0 Threats -8-

6.0 Discussion -9-

Conclusion -10-

Bibliography -11-

Summary:-

The internet has revolutionised the way people interact with, buy and listen to music. It has allowed for many artists to give themselves an oppurtunity in the industry that would never have normally been given to them, it has opened new doors for Major Labels to make money and ultimately keep making records. In an ever changing digital world an important question arises about how the internet has changed the industry and how will it affect it in the future. In this report the findings have shown that the industry is almost unrecognisable to what it used be in terms of creating and selling records. The industry is changing with the digital revolution and this report explores ways in which this may happen, but also what factors may stop and hinder the music industry from evolving and growing within the digital age.

Introduction and Methodology:-

The subject of this report is how the internet revolution and the digital age has changed how the music industry is run, and how it affects the way things are conducted, how the industry has had to evolve and adapt to new ways of making money and dealing with new threats. As a subject it is a very vital one, and also relevant to todays industry, as it will determine whether the same music industry still exists in the future, or whether it will be left behind and become obsolete.

Most of my information and research was done using textbooks relevant to the digital revolution and change, and the internet, watching relevant interviews and reading articles. Looking at the internet presented some information that didn't have credibility as anyone can upload a video or article however with enough depth there is a lot of very helpful information online.

Based around the SWOT form of anylysing a relevant issue, my report will systematically breakdown the issue into Strengths, Weaknesses, Oppurtunities and Threats, then discuss these points and the importance of these to the subject matter.

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This is a preview of the whole essay

Main Body:-

SWOT grid

SWOT analysis:- How the internet has changed and affected the industry:

Strengths Weaknesses

easy distribution -A lot easier for music piracy to flourish
easy tool to use -Ways to Download Streamed Music Online
makes music listening -P2P sharing contributes to major losses of revenue

and sharing easier

save money on different ways

to do the same things

(eg. Scouting)

new ways to listen to music such

as Spotify, legal and free due

to P2P threats and advertisements

Oppurtunities Threats

new ways to sell advertisements/ - Force majors to branch out in order to make enough

make money in new capacities money to survive, ie. Phone and internet companies

new cheaper ways to sell music music in games, adverts, films. (diversify)

(mp3, online no actual copy of the - Potential for Revenue Loss is Greater

music, digital format.)

easier managemnt and promotion

for an artist

users can upload their own music,

makes looking for new talent a

cheaper and easier process

easy way to promote and reach

people

Strengths
Easy Distribution

The internet has opened up a whole new way for the music industry to distribute their music through a digital world. Tracks and new songs can be uploaded onto things like iTunes and Spotify to be heard freely around the world. In the case of iTunes listeners purchase individual tracks or albums and then that purchase is stored in the library of that listener. Spotify listeners just listen to tracks they want to hear without the oppurtunity to download, but with advertisements in between and displayed on the playlist screen.
This way of downloading just single tracks instead of having to purchase an album disrupted sales for the artist, it didn't really affect the industry as sales were still being made however the artist suddeny lost album sales meaning profits and revenue would drop.
Easy distribution for music and new ways to initially share it with the world mean that money can be saved on having to produce as many 'hard' copies of the track or song in question.

(Music Distribution and the Internet, Sparrow. A, 2006, Gower Publishing, Aldershot, Hampshire)

The Internet is an Easy Tool to Use

2.2.1 The internet is an easy tool to use and manipulate for both general users and labels alike. It is a very versatile tool that can be used to meet ends that would normally never have been possible. Within minutes a label can have a track on sale around the world, instead of having to wait for CD's etc to be delivered and sold in stores.

2.2.3 Using websites such as Myspace finding target audiences is a lot easier for the industry, facebook and other sites hold valuable marketing information as people likes and dislikes can be found and then marketed accordingly.

(Virtual Music, Duckworth. W, 2005, Routledge, New York.)

Music Listening is Easier

2.3.1 People can now listen to music whenever and wherever they want, and also now the internet through programmes such as Spotify allows for people to make playlists and listen without ever having to purchase a track.

2.3.2 Spotify is almost a solution to the problems of P2P (peer to peer) file sharing of music, as it has taken people away from the easiness of downloading a track illegally and making it simpler by just allowing it to be heard in exchange for listening to advertisements in a similar fashion to that of the radio.

(Understanding Popular Music Culture, Shuker. R, 2008, Routledge, Abingdon, Oxon)

Weaknesses
Music Piracy Can Flourish

The internet has allowed for music piracy to flourish and become a huge problem for the industry as profits are/ were being lost in huge scales. Clamp downs on how music can be stored digitally (formats) and ways in which music can be downloaded means that now if someone is caught downloading illegally there is more legal room for labels to sue and make back lost earnings. However illegal downloads are still rife and are a hige problem in the industry.

(Music Distribution and the Internet, Sparrow. A, 2006, Gower Publishing, Aldershot, Hampshire)

(Virtual Music, Duckworth. W, 2005, Routledge, New York.)

Ways to Download Streamed Music Online

There are now other ways other than simply downloading a song through Limewire or site like Napster nowadays whereby people can also illegally download music. For example there is a Youtube converter that allows for audio to be stripped from Youtube videos whereby the only check is to agree not to use it to breach copyright yet it can still be done.

(Virtual Music, Duckworth. W, 2005, Routledge, New York.)

P2P sharing contributes to major losses of revenue

P2P file sharing is still a major issue for the industry as a lot of revenue is still lost through people downloading songs without money ever going to the record label, artist or songwriter.

(Music Distribution and the Internet, Sparrow. A, 2006, Gower Publishing, Aldershot, Hampshire)

(Understanding Popular Music Culture, Shuker. R, 2008, Routledge, Abingdon, Oxon)

Oppurtunities
New Ways to Earn Money

4.1.1 The internet has helped to open markets that wouldn't have normally been able to have been reached, and also has helped, as well as hinder, the labels in finding new ways to make money instead of the usual record sales due to the digital age.

Opens New Doors for Artist Searching

The internet has opened a whole new way of being able to search for new artists and talent. Before where a scout may be used by a label to go out and physically search for new artists, just by browing the internet it is easy to stumble across an unsigned artist who has uploaded their music onto a site such as Myspace.com.

(Understanding Popular Music Culture, Shuker. R, 2008, Routledge, Abingdon, Oxon)

Easy Way to Reach and Promote

4.3.1 Using the internet as a tool to reach people to market a certain track or artist to is an invaluable resource as it is a lot more personal now than just a poster on a billboard, also it makes the target market feel a lot more like they are part of something to do with the artist rather than just buying a CD.

(Virtual Music, Duckworth. W, 2005, Routledge, New York.)

Threats
Forces the Majors to Diversify

5.1.1 A downside to the internet is that due to things such as illegal downloads and revenue loss through lack of record sales, the Major record companies have had to evolve with the digital industry to stay 'alive'. Major companies now own a lot of mobile companies, and internet providers etc.

5.1.2 Major companies now have to make the track, provide a service where it can be purchased easily and cheaply, maybe provide a medium for it to be played back on (ie. MP3 player, Hi-Fi system) and also allow for new ways in which to make money from a track; Mobile phone track downloads, using tracks in films and advertisements so that money is made more by copyright payments and publishing rights more than record sales.

(Understanding Popular Music Culture, Shuker. R, 2008, Routledge, Abingdon, Oxon)

Potential for Revenue Loss is Greater

The internet has provided many ways in which a label can lose money through illegal downloads and lack of control of downloads online. The internet as a medium is a grey area as what may seem completely fine to a user who wants to own a song is actually a copyright infringement and in fact illegal.

(Music Distribution and the Internet, Sparrow. A, 2006, Gower Publishing, Aldershot, Hampshire)

5.2.2 Ways in which the internet can be manipulated to meet ones end is staggering. What may actually be a simple tool for an innocent intent can be used to steal music and tracks. Things like P2P where they are designed more for documents and non-copyrighted material can be used illegally. Stripping audio from streaming videos is also another way in which copyrighted music can be stolen.

(Virtual Music, Duckworth. W, 2005, Routledge, New York.)

5.2.3 Websites such as Youtube where anyone can upload a video of their choice means that people can go online and listen to a track similarly to Spotify without ever having to pay or place money into the hands of the label and/or songwriter.

6.0 Discussion:-

From this SWOT analysis I can see that the Internet looks like the future and the way that the industry will evolve. It is such an important part of society let alone business in todays world that it would be a mistake not to move with the business world and adapt in order to keep up. As music and the internet have become more and more involved with each other it can easily be seen that moving from illegal downloads from things such as Limewire towards programmes such as Spotify is definitely a step in the right direction for Major labels. Away from illegal copyright infringements, towards legal listening. This just means that the way that people will listen to and purchase music will change, maybe even to the point where people aren't actually purchasing that many records but the money being made by labels will be through advertisements people will be subject to whilst listening. The findings above I believe show that a drastic change in the way people handle their music and listen will occur, and the industry will have to change with it in order to survive. It is almost as if music is now more being listened to in a 'radio' fashion, listening for free just with the sacrifice of having to hear advertisements, however the listener chooses the track about to be played, almost a personal radio station over the internet. Avid music listeners will always purchase CD's, but in the future maybe it will only be for certain, significant artists to the individual. Before the internet people would have to buy an album to hear and make a judgement on an artist, whereas now an individual track that isn't even a single can be bought.

Conclusion:-

From the above report into how the internet has changed and affected the industry a lot of interesting points have arisen in regards to just how much the industry has actually changed due to the direct impact and influence of the internet and to what extent it may change in the future as the internet increasingly becomes an ever more important medium.

The internet is a powerful tool for the industry if used correctly and manipulated in the correct ways.
The internet is a viable source of market information and track and song distribution
The inernet will continue to affect the music industry, and if the correct steps to adapting to grow and change with the internet are not taken then the industry will crumble
The music industry has already started changing to meet the expectations of the digital age
Music piracy has been able to grow radically due to the accessibilty of the internet
The internet can already be used as a tool to greater the ends of the record industry, by use of new ways to sell music and new oppurtunities to find and share music
Music listeners may have to change the way they listen to their music if, if CD's became obsolete due to poor sales then the whole industry will change, maybe for the worse
New means of dealing with piracy are becoming apparent but it is still so hard to keep tabs on what people are downloading with so many people using the internet, that is will proably always be an issue