Declining Record Sales: Who Is to Blame?

The music industry is made of companies which produce and sell music. The music industry as we know it was solidified in the mid-twentieth century, where records succeeded sheet music as the primary product in the music business. Record companies were established, but did not last very long until the late 1980s when the “Big Six”, a group of multinational corporations consisting of Sony, MCA, WEA, Polygram, EMI, and BMG controlled most of the market. Initially there were five corporations (CBS and RCA (both now belonging to Sony), WEA, EMI, and Polygram) that had emerged in 1978 to own 60 per cent of the market. (Wallis and Malm, 1984, p. 81)

According to the Recording Industry Association of America (RIAA), 30 billion songs were illegally downloaded between 2004 and 2009. Even with sites like iTunes and Rhapsody offering legal downloads, peer-to-peer file sharing still exists. Illegally downloading music has had a significant impact on the music industry resulting in a loss of profits and jobs, and changing how music is delivered to the masses. (Adkins, n.d.) Showing that even having the ethically correct option P2P sharing of illegal media is still thriving. The RIAA reports that music sales in the United States have dropped

With the advances in technology and increase in internet broadband availability (The Broadband Commision, 2014), record labels are being forces to innovate and update their business models (M.Coz & Torres, 2013) to keep up with the latest technology (Solis, 2015). Of these technologies, the move away from physical sales (of music) to Digital sales is the most significant. Digital sales have increased over the last 6 years (as shown in Table 1) in terms of revenues, and this is set to carry on this way in the future (Solis, 2015).

The ever-changing landscape of music distribution, due to constant advancements in technology, is sometimes hard to keep up with for artist, producer, and consumer alike. New editions of textbooks in Music Business classes are issued each year, and changes are made in the industry before the semester is even over. Because of this, it is vital for the industry to not only not only be aware of what is currently going happening, but also be able to foresee the direction that the music business is heading in. In this aspect, it seems that we are at a turning point where consumers and artists are taking

Napster, a free online file sharing network, allowed peers to share digital files directly with each other by way of connections through its software and system. The no cost peer-to-peer sharing gained popularity, particularly with trendy music. A&M Records took notice of the free digital music downloads and brought suit against Napster for direct, contributory, and vicarious copyright infringements (Washington University School of Law, 2013).

In this article, Peterson and Berger show how the organization of the popular music industry affects the music that America hears.

Since the iTunes music store was introduced on April 28, 2003, gross music sales have plummeted in the United States - from $11.8 billion in 2003 to $7.1 billion in 2012, according to the Recording Industry Association of America (Covert). Counterintuitively, during that time consumers were buying more music than ever. How is that possible? It 's because iTunes had made digital singles popular and was selling them cheap. This would change the music industry forever. In 2000, Americans bought 943 million CD albums (Covert), and digital sales didn’t even make a dent in comparison. But by 2007, those inexpensive singles overtook CDs by a wide margin, generating 819 million sales compared to just 500 million for the CD.

“Before the days of YouTube and the Internet, a band 's chances of striking it big depended on record companies. If a band was lucky enough to get a record deal, it gained access to a label 's vast resources and connections. The company paid for the band 's studio time, … and got its music played on the radio, reaching millions of record buying Americans” (Majerol, 1). Now, anyone with talent can post a video of themselves and become an internet sensation, only to then receive a deal with a label to continue growing their career. The issue is, with the Internet came digital downloading, and with the growing popularity of digital downloading came illegal downloading, known as Digital Piracy, which has affected the music industry greatly. This issue affects everyone involved in the Music Industry. From the small CD store owner to the Artist on stage, everyone has and continues to be affected by the growing popularity of digital downloading services. Artists, producers, and songwriters lose an estimated 12.5 Billion USD every year to illegal digital music services. Further, the economic impact from [digital downloading] is an estimated loss of 2+ Billion USD (Storrs, 1). This money affects the “little guys” in the industry and the average worker within the industry.

Napster, a free online file sharing network, allowed peers to share digital files directly with each other by way of connections through its software and system. The no cost peer-to-peer sharing gained popularity, particularly with trendy music. A&M Records took notice of the free digital music downloads and brought suit against Napster for direct, contributory, and vicarious copyright infringements (Washington University School of Law, 2013).

Introduction: Setting the trend for the future, the distribution and consumption of recorded music transformed dramatically with the launching of Apple’s iTunes in 2001. The proliferation of online music subscription services and other music sharing services exerted a great pressure on the conventional music distribution business model. Combined with this transformation, piracy of digital music had a profound impact on the whole industry. These worsening conditions in the market place for recorded music forced both established and upcoming new artists to experiment with new ways of selling their music.

Producers of musical content cannot undo the adverse effects that piracy has had on the industry. Because of the internet and the way individuals have manipulated it to obtain music, many people are unwilling to change their habits. Here lies the issue between the producer and the consumer. Acts like the Stop Online Piracy Act (SOPA) and PROTECT Intellectual Property Act (PIPA) work against the incentive of many consumers by telling them that they cannot do what maximizes their utility. Producers are thus working against the likings of the consumer. This is wrong.

In the midst of the United States’ “dot com bubble” (years 1997-2000), there was a surge in technology that brought about file sharing and digital downloads. Threatening the survival of the music industry and introducing a unique set of challenges for the industry to overcome. To remain relevant in the new global market of digital music online, the music industry would have to evolve and change with the introduction of each new facet technology had to offer. The introduction of digitally compressed music files, so easily attainable for a small fee or downloaded legally (pirated) for free, made the music industry reevaluate how to make a profit and protect copyrights. Social media created a visible opportunity for both consumers and artists to maintain digital relationships while providing a platform for consumers to follow and discover new musicians and bands, naturally, making the internet a promotional medium for artists. As the corner record shops closed to make way for virtual storefronts and instant downloads; the internet, digital downloading, and social media made an enormous impact on the music industry that has changed the way consumers purchase, source, listen to, and produce music today.

Digitalization, data compression, and the internet have affected the music industry significantly. These technologies have shifted the recording industries from hard-copy recordings to digital music distribution. This has made it easier for consumers to enter the music market through copying. Consumers have access to copying technology that allows them to obtain music without paying the record label. The situations clipped high in 1999 when Napster, a file-sharing service was launched. The service facilitated music file sharing on a wider scale. The consumers just download the music and transfer it to a digital music device. This has negatively affected the trade value of music sales, for instance in

Ever since 18-year-old Shawn Fanning created Napster in his Northeastern University dorm room in 1999, downloading and sharing music online has become one of the most popular things to do on the Internet today. But why wouldn't it? Getting all your favorite songs from all your favorite artists for free, who wouldn't want to start sharing music? The answer to that question are the people who feel that stealing from the music industry is not morally right, because that is exactly what every person who shares music is doing. People who download music think it's something they can get away with but now it might be payback time to a lot of those people.

Companies like Apple, have decided that it is best to get in with the downloading business. However, an end to the illegal downloading conflict remains to be realized. The RIAA and associated artists continue to wage war against illegal downloaders while computer savvy audiences persist in sharing music files online every day. While it is undoubtedly true that downloading music is a crime, it remains to be proven that it is wrong. Without establishing this principle, most downloader's are likely to continue the activity. Even with new, inexpensive and available means of downloading files, they can still be shared for free online. The rift must be repaired between music lovers who feel that they have been taken advantage of in the past and recording companies and artists who worry about their future livelihood.