Challenges Of Digitalization For The Music Industry

Seminar paper from the year 2013 in the subject Business economics - Marketing, Corporate Communication, CRM, Market Research, Social Media, grade: 1,3, University of Munster, course: Digital Media Marketing Seminar, language: English, comment: Seminar-Arbeit im Digital Media Marketing Seminar, Master Marketing an der Westfalische Wilhelms-Universitat Munster, abstract: This seminar paper analyses how the digitalization has changed the general set-up of the music industry. By analyzing studies and data, the paper illustrates several challenges that influenced record sales. Considering the different type of players in the music industry - record labels, online and physical retailers, and artists - this paper will only discuss the challenges and effects of the digitalization on the major record labels. The challenges of digitalization for artists will not be covered in this paper; digital music actually enhances the chance of being discovered and for reaching a larger audience (Ankeny 2012). In this sense, the digitalization is an opportunity, rather than a challenge for artists. This also applies for online retailers such as iTunes and Amazon. Since digital music does not require physical storage, online retailers can offer music at almost zero costs. Thus, online retailers benefit from the digitalization of music. Physical retailers presumably lose revenue because of the digitalization of music. However, their situation will not be discussed further, in this paper. The major record labels are highly vertically integrated (Neff and Blomer 2003, p. 104). Besides managing artists, the recording companies are also in charge of the publishing and copyrights of music. Additionally, they have enormous production resources and strong distribution networks. This gives the major record labels a significant competitive advantage. However, this advantage was partly ruined by the digitalization. In this paper, digitalization of the music industry is limited to the impact of

In the late 1990s, the MP3 became the de facto standard for digital audio files and the networked computer began to claim a significant place in the lives of more and more listeners. The dovetailing of these two circumstances is the basis of a new mode of musical production and distribution where new practices emerge. This book is not a definitive statement about what the new music industry is. Rather, it is devoted to what this new industry is becoming by examining these practices as experiments, dedicated to negotiating what is replacing an "object based" industry oriented around the production and exchange of physical recordings. In this new economy, constant attention is paid to the production and licensing of intellectual property and the rise of the "social musician" who has been encouraged to become more entrepreneurial. Finally, every element of the industry now must consider a new type of audience, the "end user", and their productive and distributive capacities around which services and musicians must orient their practices and investments.

This book provides rare insights into the difficult and complex dialogues between stakeholders within and outside the music industries in a time of transition. It builds on a series of recorded meetings in which key stakeholders discuss and assess options and considerations for the music industries’ transition to a digital era. These talks were closed to the public and operated under the Chatham House Rule, which means that they involved a very different type of discussion from those held in public settings, panels or conferences. As such, the book offers a much more nuanced understanding of the industries’ difficulties in adjusting to changing conditions, demonstrating the internal power-struggles and differences that make digital change so difficult. After presenting a theoretical framework for assessing digital change in the music industries, the author then provides his research findings, including quotes from the Kristiansand Roundtable Conference. Following from these findings, he develops three critical concepts that explain the nature as well as the problems of the music industries’ adaptation process. In conclusion, he challenges the general definition of crisis in the music industries and contradicts the widely held view that digitalization is a case of vertical integration.

Master's Thesis from the year 2009 in the subject Communications - Multimedia, Internet, New Technologies, grade: B1, University of Glasgow, course: Media Management, language: English, abstract: The music business is one of the few industries that has trouble growing profits in its transition to digital. Digital media, downloads, mobile music streams, music flat rates, peer-to-peer networks and the rise of ‘freeconomics’ on the Internet are partly responsible for the reduction in CD sales in recent years. The question that is most important for the industry is how the widespread of freely available content and illegal downloading can be monetised. One approach to model around the main threats to the music industry is the development of online music services. Thus, this study is an attempt to address the issue of ‘what are the opportunities and challenges posed by online music services for the music recording industry?’ Referring to empirical findings of a consumer survey and expert interviews, both opportunities and challenges can be identified for the music recording industry. The opportunities surrounding the development of these services are encouraging. Deriving from the challenges, the music recording industry must ensure that online music services are a supplement to traditional ways of consumption and do not turn into a replacement of physical music consumption. Concluding online music services have a small impact on the recording industry. The industry might benefit from closely cooperating with online music services by learning more about consumers’ tastes. Nevertheless, the online businesses are struggling to break even and revenues from streaming will not overcome legal downloads or CD sales as major revenue stream anytime soon.

Challenges the conventional wisdom that the internet is 'killing' the music industry.

Patrik Wikström and Robert DeFillippi bring together innovative, multidisclipinary perspectives on business innovation and disruption in the music industry. Authors from fields such as cultural studies, economics, management, media studies, musicology and human geography in North America, Europe and Asia focus on the “second wave” of digital disruption and the transformation of the music industry. The chapters are structured into three parts: the first part contextualizes changes in the music industry that have been driven by digital technologies since the end of the 1990s. The second part unpacks the impact of these disruptive technologies on business models in specific industry sectors and geographies, and the third and final part examines questions related to the emergence of subscription music services. Concluding chapters link back to the role of hackers as a subversive and innovative force in the music economy and examine how hacker creativity can be facilitated and encouraged to generate the next big music industry innovation. This multifaceted look at the music business will serve as a resource for both undergraduate and graduate students, as well as established scholars and industry professionals.

The Death and Life of the Music Industry in the Digital Age challenges the conventional wisdom that the internet is 'killing' the music industry. While technological innovations (primarily in the form of peer-to-peer file-sharing) have evolved to threaten the economic health of major transnational music companies, Rogers illustrates how those same companies have themselves formulated highly innovative response strategies to negate the harmful effects of the internet. In short, it documents how the radical transformative potential of the internet is being suppressed by legal and organisational innovations. Grounded in a social shaping perspective, The Death and Life of the Music Industry in the Digital Age contends that the internet has not altered pre-existing power relations in the music industry where a small handful of very large corporations have long since established an oligopolistic dominance. Furthermore, the book contends that widespread acceptance of the idea that online piracy is rampant, and music largely 'free' actually helps these major music companies in their quest to bolster their power. In doing this, the study serves to deflate much of the transformative hype and digital 'deliria' that has accompanied the internet's evolution as a medium for mass communication.

Aimed at songwriters, recording artists, and music entrepreneurs, this text explains the basics of digital music law. Entertainment attorney Gordon offers practical tips for online endeavors such as selling song downloads or creating an Internet radio station. Other topics include (for example) web site building, promoting through peer-to-peer networks, etc.