Independent NDM case study: Media Factsheet research

24 Music Industry

• The Internet has now provided artists and individuals the opportunity to launch independent record labels known as Net Labels. These companies operate by distributing music primarily through digital audio formats via web sites on the internet. The MP3 format has allowed for easier distribution of music by individuals and the use of global websites such as My Space are playing a big part in promoting new bands.
• Major recording companies are using on-line distribution of music and social networking sites to reach potential audiences in a new way.
• The internet is used for:

• The sale of traditional physical formats

• The marketing of music recordings

• Netcasts and live performances

• The sale of music downloads

• The management of official websites of recording artists and record companies

• Once an artist has created their recording, it is then distributed and marketed in order to attempt to make a profit and cover the cost of its production. It is the record label’s responsibility to promote and distribute the product.
• The mass media, specifically the Internet, radio, television and the music press play an important role in the distribution and marketing of music to the intended target audience.
• Synergy is another way in which record companies generate income via advertising and marketing their artists in association with other brands or products. For example, two unrelated brands such as The Black Eyed Peas and Pepsi worked together to target a broader audience and this collaboration benefited both the band and the soft drink.

67 Lady Gaga and the music industry

• The growth and popularity of the internet has challenged the power of conglomerate control within the industry in a number of ways. The music industry has had to respond to the advent of the digital revolution due to its impact on production, distribution, artists and audiences.
• The rapidly increasing trend of internet file-sharing has resulted in both positive and negative outcomes for both artists and fans.
• Artists are rewarded with free ‘viral marketing’ where word of mouth spreads ‘like a virus’ amongst users, generating free publicity and ‘buzz’ around an artist, video, album or single. However, this has the potential to increase music piracy and illegal downloading of music which in turn can contribute to massive financial losses for record labels as users are able to download or stream music for free rather than purchase a physical copy.
• Artists have taken ownership of key industry processes such as marketing and distribution, processes usually carried out by the record labels themselves.
• As conglomerates becomes less dominant, audiences gain more choice over the types of music they want to hear and access, rather than being restricted by the type of music distributed by record labels.
• The digital revolution has enabled audiences to move from passive to active, leading to a participatory culture as audiences get more of a say in what music is produced and which music succeeds.
• Lady Gaga offers a new business model by successfully combining traditional industry practices (being signed to and financed by a major record label) with new media forms. She utilises the power of a major conglomerate whilst embracing the development of digital technology.
• Since the Gaga phenomenon began, her music has been available to access for free via streaming on her many on-line profiles, including those on Vevo and Myspace. Rather than reduce record sales, this move has proved financially beneficial for the institution as fans are also paying to download the music via iTunes.
• The rapid growth and popularity of the internet and new technologies means that fans are becoming more active consumers, able to interact with their subject in a variety of new ways.
• By embracing social network media platforms, musicians and record labels are able to utilise an interactive relationship with fans that is beneficial to both producers and audiences.
• The rise in digital technology has seen an increase in on-line video consumption. This can create free word of mouth for producers, with the number of viewings per video providing a sign of audience engagement with a product. Fans can view videos on YouTube and share clips with other fans by embedding them into blogs, Facebook or MySpace.
• Fans can leave video comments, post a video response or spoof and upload music to their own social network profile. These forms of user generated content illustrate the changing relationship between producers and audiences in a move towards a ‘demand led’ music industry where fans themselves have the power to influence what is produced.
• Richard Dyer (1985) offers a definition of escapism stating that ‘entertainment offers the image of ‘something better’ to escape into or something we want deeply that our day to day lives don’t provide’.
• The digital revolution is both challenging the power of the music industry as something that is conglomerate controlled, and transforming the role of the audience by giving them more power over the way they consume and respond to media products.

104 Audiences in the digital age

• Digitalisation has impacted on all areas of the media and has led to a range of changes in the way audiences access media texts and how they interact with these texts and each other. Institutions have had to identify different ways to reach audiences to offer them gratifications that reflect changes in audience behaviour and expectations.
• Traditionally, the relationship between audience and institutions was seen as one-way, where institutions were in charge of the construction of texts and audiences were merely passive observers.
• This relationship means that power is in the hands of an audience as a mass rather than with individual audience members.
• A media institution produces media texts, has to distribute them to the audience and the method of viewing/reading (exhibition) has to be considered.

• Traditional Distribution/Exhibiting

• Radio (and music television) would construct play-lists and radio shows would be broadcast live.

• Music video could only be seen when broadcast or if purchased on video/DVD collections 

• Radio programmes could only be accessed via a radio.

• Music could only be bought as ‘hard copy’, the most successful being vinyl records, cassettes and then CDs.

• The music press was published in print and employed professional journalists.

• Digitised Distribution/Exhibiting

• Spotify offers a vast library of music that is available at any time.

• Music videos are available anytime on YouTube and can be downloaded and played on      mobile devices.

• Digital radio can be listened to on computers and mobile devices.

• Music is available as electronic data files.

• Bloggers can set up their own versions of the music press offering reviews and commentary.

• Digital media has provided more choice in terms of how and when media products are accessed.
• Audiences can be seen to have more of an impact on production and can even be part of the production process themselves. Some see this as a positive move that reduces the amount of power held by institutions.
• Audiences have easy access to the means of production. Videos can be made and edited at home and uploaded to YouTube. Music can be produced at home and made available via social networking where it can be sold or offered for free download.
• Audience generated material is always cheaper than that produced by professionals and so institutions also benefit from the move towards including more user generated content.

122 The Changing Face of the Music Industry

• The music industry wants to protect their position of dominance.
• Developments in technology and the emergence of the Internet mean that artists have the potential to reach audiences without the need for a major company and where once recording equipment was expensive it was out of reach for the average person; it is now widely available at a low cost.
• In many cases artists are able to promote and distribute their music digitally without the assistance of a record label. Unsigned artists can sell their music on iTunes, have it streamed on Spotify or Soundcloud and produce their own videos for YouTube.
• In an era of fragmented platforms, file sharing, and non-traditional routes to market, the music industry is facing various challenges. It has had to react to change: new formats, new technology and new business models mean an industry in a constant state of transformation. This has been particularly obvious in the way that audiences are dictating how they want to consume their music, but having more ways you can listen to music is not necessarily the same thing as having more choice.
• One of the most problematic issues that the industry is facing is the ‘culture of free’.
• In recent years consumers are less willing to pay for their music and as a consequence piracy and file-sharing have seen the industry lose billions over the last decade. According to the Institute for Policy Innovation global music piracy causes $12.5 billion of economic losses every year.
• In order to combat this music streaming services such as Spotify have worked in conjunction with the industry to try offer audiences the opportunity to listen to music but not actually download it, which means it is not being shared YouTube has also placed ID content censorship on videos to stop music being downloaded. However, these are only temporary measures and the industry has had to find more ways to prevent this.
• The Internet was meant to weaken the dominance of superstar artists in the music industry and enrich the smaller, niche music creators. But new research suggests that this “long tail” theory is wrong: superstars are capturing the vast majority of music revenues and their share is increasing – not decreasing – because of the rise of digital services like iTunes and Spotify. The top 1 per cent of artists the likes of Rihanna and Adele accounted for 77 per cent of recorded music income in 2013.
• In this illusion of choice consumers are overwhelmingly listening to the ‘hits’.
• Artists like Amanda Palmer are trying to circumvent the big labels and do things differently by using the idea of crowdsourcing. This is where an artist asks their fans or anyone who may be interested to fund their project and be given something special in return.
• What is clear is that in a trans-media age where changes are brought about by the developments in technology at a rapid pace the interrelationship between the artist and consumer is evolving beyond the traditional models, but whether they will ever challenge the monopolies is yet to be seen.