“Measuring The Ground”By: Toine Tracks

MUSICINDUSTRYREPORT

TheToineTracksShow.com

Perpared for: The Public@ToineTracks© 2011

Music has shaped and continues to shape our culture at home and abroad; it also continues to be the dominant factor in the development of pop culture that is changing rapidly everyday. The music industry and music itself cultivates hundreds of different audiences with various styles and forms. Being music lovers, we all have different tastes in what music we listen to but some things that we all have in common is the love for the music, the message that it sends out to us and the feeling we get when we hear that favorite song. Music speaks to all of our emotions and brings back vivid memories of the past, and gives us hope for the future while keeping us motivated about the present. For those involved in the industry like producers, musicians, artists, etc., music has even more meaning to “us” and it shows through the talent, drive, and passion that we individually present to our

audience. Being involved in the industry, I’ve witnessed a dramatic shift. Technology, the availability of music and the current economic state are all factors of supply, demand, and the consumption of music. While opportunity costs are low for indie record labels and artists, there is a high demand for on-demand music. To supply this demand, our industry has used technology like social media{Facebook} and online music and distribution sites {Soundcloud & Reverbnation} to create, supply, and maintain the demand curve of the industry. These factors will determine the industry’s future and ours as well.

“Measuring the past and the present, will help us see the future outlet of technology and how it impacts the music industry. Thanks to social media, smart phones, and cool devices like the iPad, the music industry can now operate independently leaving the consumer to consumer music differently.”

“Measuring The Ground”By Toine Tracks

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@ToineTracks

In the Beginning, there was musicBy Toine Tracks

In American Popular Music, David Sanjeck discusses some of the issues that artists went through when the industry was still new as well as what they continue to go through today. He highlights how they face some difficulty when introducing their music to the masses. “Many people feel that whenever creative individuals intersect with executives, something invariably soils and corrupts the exchange. In order to remain commercially competitive, artists must “sell out,” for they cannot remain true to their principles and also abide by their contracts.” This book was written in 1991 but from observance of the recording industry present day, it seems like this fact remains. While majors are still tooting their horns, their run away children; the indie labels, are advancing and staying afloat with less sale decreases than their competition. The advent of technology has increased the indie arts community ability to collaborate. For example, song liscencing for indie films and video games are major ways that indie artists are staying in tune with their audience and potential listenters. With the knowledge from technology and social media, majors are utilizing statistics from cosumer music consumption to cash in on products they know we as music lovers will buy because our favorite artist is promoting it. The major factor to blame is the infamous 360 deal. This deal sprang up in response to declining record company revenue, hundreds of indie artists coming up, and triple inclines in digital music sales, not to mention music lovers everywhere were getting their fingers sticky in pirated tracks {P2P Networks} To keep their head above water, the majors decided to begin offering a package deal to new and multi billion dollar artists alike. In exchange for more money, promotion, and marketing, the artist would sign a deal that grants their label to a percetage of all their pie; {360} a piece from every part of their revenue. If the artist sells out at an arena and they are

on the 360 Deal, you better believe a cut of that is going to their label. Let’s not even mention merchandise and CD sales at the concert... you can see why artists are always busy touring, coming out with t shirt lines for Kohls, they have to be. Historically, the music industry and the art itself have gone through makeover after makeover, each time becoming more advanced and more demanded by consumers worldwide. As a society we have gone from listening to music on our radio, to listening and watching our favorite videos on our IPOD & IPAD 2. Keeping this in mind, the purpose of my research is to provide the backdrop for the development of the recording industry while at the same time finding out where the recording industry is (present day) and where it will be in the future. I feel that discussing this issue is important because I am a consumer, analyzer, and participator in the industry. In my lifetime, I’ve seen music evolve through technology. This is why I feel technology and music go hand in hand and that they are integral parts of our lives whether we accept it or not. I cant emphasize enough how dramatically the industry has changed. “Back in the day” as some people say, music was distributed and listened to in a far more different way than it is today. Going back to American Popular Music the foundations of the recording industry are discussed thoroughly dating back to World War II to the early nineties. During WWII was when music became the most popular because of the state that the economy was in. People were ready and willing to spend money on music as well as become involved in the industry. Things were pretty much simpler than they are now. Nonetheless, today we enjoy our music and are willing to spend money on those artists at the top of our list, the net is makiing easier to access free mixtapes and music deals that were not available to our elders.

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1 Melnick, Jeffery, Rubin Rachel, American Popular Music. (Amherst: University of Massachusetts Press, 2001) 9.

Various factors will rely on what will happen to the industry and music in the future. One major factor that advances each and every day is technology. The power of social media and it’s role in the music industry is a major factor. Who will be affected by the dominance of technology and at what state will record companies be in? The use of technology and how it has shaped music will always be an important issue that we as consumers and artists must face. In American Popular Music, Sanjeck discusses the two elements of technology that contributed to the development of music as consumption before the new millennium. “With the advent of sound, music became integral to motion pictures, and the proliferation of “all talking all singing all dancing” narratives meant that songwriters worked overtime to fill the demand for material… the other emerging technology that the music industry profited from was radio…” 2 This quote gives me the idea that in the beginning, there was some innocence about the industry and that the artist as well as others who were involved in the industry had a different focus compared to entertainers present day. Sanjeck also mentions how the distribution of sheet music and “plugging” was the technology that performers used at that time to get their music listened to. Entertainers then were all about entertaining and because of the introduction of sound; they were able to explore many more avenues than before. This ability proved to be beneficial as more people were beginning to purchase and compose their own music. While the previous story may sound like a music utopia, technology brought along a nuisance that the major industry just can’t seem to “shake;” P2P {peer 2 peer} networks and major piracy. I wouldn’t be analyzing the industry unless I mentioned the state of music consumption after the artist learned that we “giveth” and we “taketh.” Music piracy is such an ongoing problem, organizations like the RIAA have legal sanctions in place if a

consumer downloads music from sites like Limewire and Bear Share. In the early 2000’s, when people were majorly getting sued for downloading music, the RIAA was almost always directly repsonsible. Things have since changed. Technology is getting smarter, faster, and more accessible and so is the music industry. That demand I mentioned earlier is a crucial factor in industry’s next move. With pirating at record high levels, organizations and major labels are collaborating to create a tight knit web of music consumption that in turn,creates a constant revenue stream. Pandora, Spotify, Vevo, and last.fm are among the hundreds of newly liscensed networks that bring unlimited listening to your computer, smart phone, and T.V. Not only can you purchase a song as you’re listening, you can share your current playlist on Facebook. IFPI, an international organization dedicated to bringing music to the consumer through multiple outlets offers insight on the digital industry in their 2011 Digital Music Report. The report provides statistics on digital music sales, consumer trends, and how piracy has influenced liscensing services and impacted the industry as a whole. Last year, international digital revenue sales in US dollars totaled $4.6 billion dollars. Currently, 29% of the industry’s revenue is from digital sales and growing. One of the most complelling things about these numbers is that online music subscriptions are becoming the newest services for music junkies. The 24 hour availability of music is strikingly making the major labels lots of money since many of the subscrption services are accessible via smart phones and wifi devices. According to the IFPI report, Spotify subscriptions have raked in over 750,000 paid subscibers across the world. ISP’s were some major cash cows for the industry last year. They’ve proven to be a determining factor in future creation and promotion of these services.

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2 Melnick, Jeffery, Rubin Rachel, American Popular Music. (Amherst: University of Massachusetts Press, 2001) 14.

ISPs literally created a big brother effect for consumers. Statiscally, music consumption is broken up in five different categories based on “where” the consumer listens to music the most. These categories include; the living room, car, PC, iPod, & smart phone. Below is a snapshot of the 2010 statistics for ISP music consumption.

After looking at these statistics, we can infer that all music consumption via ISP networks are being closely watched to continue to influence the consumer to purchase more music and services. The determining factor for music is the demand and the medium in which the music is being consumed. As smart phones are on the rise, or what the article considers as the new “frontier,” we should expect music subscriptions, music videos, and interaction to become more part of our waking lives.

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Moore, Frances. IFPI Digital Music Report 2011.

Bibliography

Melnick Jeffery, and Rubin, Rachel. American Popular Music. Ahmherst: University of Massachusetts Press, 2001.

Moore, Frances. IFPI Digital Music Report 2011.

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