David Archuleta ~ Surfing the Net/Conquering the Wave
Posted by djafan on Tuesday, March 15, 2011
In 1999, Napster, a free online file sharing site arose. The music industry fought back by bringing suit and vanquished that foe but like the heads of the mythological Hydra, dozens of other sites sprang up in its place. That should have been all the heads-up the industry needed but it was not until 2003 that iTunes emerged. By that time, people who were accustomed to downloading tracks for free, didn’t find the 99 cent deal as tempting. Now, according to online download tracker BigChampagne Media Measurement, the volume of unauthorized downloads represents 90% of the market.
“It first started with computer software. Most computer users have routinely downloaded freeware (free to use) and shareware (free use for a certain time period, then pay a nominal registration fee for continual use). These habits strengthened with the migration of the publishing industry over the Internet. All major newspapers and magazines provided, and most of them still continue to provide their content, for which the print subscribers would pay, free of charge over the Internet in exchange for “eyeballs” and resulting advertising revenue. These habits are now affecting music, a newly recognized information good. The convergence of computing with audio technology and the advent of MP3 and other digital formats has allowed music lovers to download and distribute both legal and pirated music over the internet. “
The Music Industry in the Digital World: Waves of Change/Mihir Parikh musicwave.pdf
In the last several years, the music industry has undergone a sea change. The tide has turned and the old ways of doing business will not work in the new global Internet environment.
There is no turning back the onslaught of this new wave. This is a an inevitable change in an industry that has experienced many technological innovations over the years. We have moved from vinyl albums to cassettes to CDs and now the change is from a tangible product to intangible access. In this Information Age the internet has altered the structure of the music industry and the way it works forever. People are going to download music for free. Period. Even if all the sites that offer free downloads could be tracked down and punished, it wouldn’t touch the millions of P2P (peer-to-peer) collections that share music and are unpublished.
This is not a bad thing. It is a change in the means of distribution from the labels to the artist and his fans. In the old structure, the labels collect 85 to 90% of the profit from music sales anyway. That means an artist has to sell an awful lot of CDs to see any of that money. The little they do see goes back into the business of making music and touring.
In the new paradigm, artists will move closer to the center of power. They will gain much more control over the marketing and distribution of their music. Many will choose to remain free of a label and labels themselves will have to change or get left in the wake of the outgoing tide. In the very near future, the label’s role of finding talent will still exist but their position will evolve to a more managerial/consultant role.
Artists who understand this change and embrace it will find themselves freer and in more control of their art and the revenue from it than ever before. The Internet, in effect, cuts out the middleman and allows the artist to interact directly with his fans.
Social networking sites like Facebook and Twitter along with a well designed, dynamic website will be the method of distribution for music and information and connecting with fans. The website could provide free downloads of music, (yes, I said free) vlogs, chats with fans, information about upcoming events, tours, and tangible merchandise for sale including CDs, high-end T-shirts, mugs, posters, and other products as well as advertising revenue. Video-taping and fan photos from concerts should be encouraged and promoted and occasional HD streaming of a live concert could be offered for a substantial fee. Most fans unable to travel to the concert would be more than happy to pay for this virtual experience in real-time. All of this is money in the artist’s pocket to help fund his tours, which also, without a label to take the lion’s share of the profit, will be much more lucrative. With or without a label, good management will be key but ultimately, his financial survival will depend on live performances and a devoted fan base. The recorded music will in effect be a way of introducing himself to a public of growing fans who will then pay money to see him live. Gone are the days when an artist was able to make a living on recordings alone. Ironically, the new age of computer technology that brought with it digitally engineered recorded voices has also, due to free access to that recorded music, ushered in a return to the sincerity of live performance. If a singer is of that rare breed who is actually better live than in the studio, he is well poised to take to the stage with confidence. If he, in addition, is getting a huge amount of illegal downloads of his music, he is standing at the crest of a rising wave, that if taken at its peak, will lead to a great future.