The Music Distribution Model : Oliver Small

It can be argued that the music industry has expanded into countless genres, artists and record labels over the years since 2000 to become bigger than it has ever been. So where have all the sales gone? It’s more than evident that file sharing has become much more attractive to music fans than it once was. People haven’t lost their interest in music, but have instead found new ways of obtaining it. These File sharing software such as Azuerus give the everyday computer the ability to obtain any files it’s user would like with a good internet connection and a couple clicks of a mouse. In short, people no longer need to pay for any music that they would like to own.

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).

Since April 2003, iTunes Music Store has permitted the consumer to purchase music and digital books over the Internet with success. By 2005 their shares increase significantly as a result of their tremendous success. Their product became a platform for the digital music business to explode into the industry it is today. This also made digital music affordable to the consumer who may have gone to illegal downloads in the past which in turn ensured that the music industry was getting paid for their product as well. The $0.99 cents per song download provided $0.70 cents to be paid to the record companies and the remainder ($0.29 cents) was Apple profit. By August 2005, some of the larger record companies felt that their product was

In the magazine article, “How The Web Changed Music Forever”, Veronica Majerol describes how over the years, music and the way it is dispersed has changed alongside the evolution of technology. Long before the internet existed, “If a band was lucky enough to get a record deal, it gained access to a label's vast resources and connections.” which then allowed their music to be broadcasted on radios around the world, played in jukeboxes, and made into records. The mid-1990’s changed all of this when people began discovering the internet; new opportunities surfaced with this development. Disaster occurred for the record industry once the vast majority began using the internet to illegally download copyrighted music; listeners no longer needed to

The development of relatively inexpensive reproduction of music via a succession of formats including vinyl records, compact cassettes, compact discs (introduced in 1983) and, by the mid-1990s, digital audio recordings, and the transmission or broadcast of audio recordings of music performances on radio, of video recordings or live performances on television, and by the 1990s, of audio and video recordings via the Internet, using file sharing of digital audio recordings, gave individuals from a wide range of socioeconomic classes access to a diverse selection of high-quality music performances by artists from around the world.[citation needed] The introduction of multitrack recording in 1955 and the use of mixing had a major influence on pop and rock music, because it enabled record producers to mix and overdub many layers of instrument tracks and vocals, creating new sounds that would not be possible in a live performance.[1] The development of sound recording and audio engineering technologies and the ability to edit these recordings gave rise to new subgenres of classical music, including the Musique concrète (1949) and acousmatic[2](1955) schools of electronic composition. In the 1970s, African-American hip hop musicians began to use the record

Since the 1930’s the vinyl record industry has seen many highs and lows, with speculation of possible extinction occurring several times. Undeterred by this the industry has seen consistent technological improvements in recording speed, materials made attainable to produce records and the manufacturing process and procedures. Understanding all these aspects of a record is important as for there are many variations of records at hand, especially when buying used records. As record time and speed evolved, we were presented with different speeds that require turntables bearing the ability to play these speeds. Records were not always made out of the same material so care for one album might be slightly

In 2000 the digital music was the next big thing in how consumers listen to music. The technological shift in music changed how the relationship is between the artists, recording companies, promoters and music stores on how they operate today. In the late 90’s and early 2000’s Peer-to-peer (P2P) networks allowed free exchange of music files with companies like Napster and Kazaa was a big step that allowed consumers to store large libraries of music. With the cost of hard drive space going down; it allowed for pocket-sized computers to store more information in a smaller space that open the door for apple to step in with the unveiling of the iPod and iTunes. These systems made it possible for storage and playback that gave consumers the

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.

Over the past decade, the use of CDs has been replaced with online streaming and retailing. This has eliminated much of the record companies revenues as they were used to making most of their profit off of distribution and promotion of physical copies of artists albums (Niemen). This has caused for a major shift and remodeling of major players in the music industries business models. Companies such Sony, Warner Music Group and Universal Music Group have started to completely rethink the way they conduct business (Forbes). In the past record labels were not only responsible for production, distribution and promotion of an artist and his/her music, but they also acted as a bank (Forbes), funding the artists tours and recording sessions. Recently, these music giants have been moving towards becoming more of a modular network organization. What this means is that they are less occupied with the nitty gritty, and more focused on what they do best which is distribution and promotion. This also allows for more freedom of creativity for the artist as well as fairer split of profits (Forbes). This adaption of new business models clearly shows the versatility of the music industry in adapting to new times and technologies.

One of the larger aspects of most up and coming musicians' careers is having enough money to produce more music for their fans. And, although music streaming sites such as Spotify and Pandora do pay artists when people listen to their songs, the payout is often not worth the effort. "When I say the amount paid per stream of a song is low, I mean it is low (McIntyre). These low payments are what is slowly devaluing the effort of small-time artists that want to find success but just cannot seem to get any financial compensation for their effort. It all started at the beginning of the 2000s when music piracy was rampant with websites such as Napster which gave access to free mp3 files (Waniata). After countless music piracy websites

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.

When speaking economically, the digital music sector of the international music industry is undoubtably the most important sector in the industry. Within the last decade, music has seen cardinal changes in the way both major and independent labels distribute their products. An industry that once relied on Payola 's and mass distribution of physical records and CD 's now relies heavily on the power of the internet. The first instance of mass distribution of music through the internet was by the service Ritmoteca.com in 1998 [1]. Ritmoteca had a library of over 300,000 songs, offering individual songs for 99 cents each and albums for $9.99. After signing distribution deals with many major music labels such as Warner

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.

A key difference between the consumption of music before the use of the internet compared to the present day, is the form in which music can be bought. Before the internet, those who heard and wanted to buy a single song would have to purchase the entire, physical album on which the song was produced (unless the specific song was released as a single, although not all songs were), whether this be a vinyl record, cassette tape or CD. This made record companies millions of pounds in royalties, as people invested money into albums they did not really want in order to listen to the one song they actually enjoyed. However, whilst big labels and record companies would be making money, only a fraction of the earnings would actually

The evolution of the music industry follows the familiar pattern of digitization. Innovation began with the introduction of the vinyl record, transitioned from the cassette tape to the compact disc and landed us in an era of digital downloads. The emergence of music streaming services like Spotify has progressed the industry even further, giving consumers the ability to access music on demand using download-free online platforms. Spotify faces criticism from artists as a result of the overlap of creativity and commerce. They argue that business activities corrupt creativity, transforming it into a tool for profitability rather than an outlet for expression. Artists insist that Spotify deters album sales, favors established artists and fails to support them financially. However, Spotify was created for consumers. It delivers an accessible alternative to purchasing and downloading music. The interplay between creativity and commerce is changing the nature of the music industry. Spotify has adapted to this change, providing a platform that supports both artists and consumers. Through analysis of the market, artist’s revenue, record labels and consumers, I will argue that artists should accept the evolution of the industry and support Spotify.