The impact of technology on the music industry: A study into how organizations adapt in a rapidly evolving business environment Profile – Sam Ford from LIKE Indies band One Night Only. The Group have recorded a top 10 hit on the Top 40 1-J Singles Chart in 2008 from their debut album “Started a Fire”. From your debut album Started a Fire, you had a top 10 hit with “Just For Tonight”.
What did It take you to get to the point? How did you market and promote your band o get to this point, did It start from how much of It was your own promotion and how did your record label help? Gigging. We spent years just touring and gigging and built up a real strong loyal live following. The more people you get coming to your shows the more people that will go out and buy your singles and buy your albums. How did the record label help with that? Or was it really just built four own back?
Its always good to have major label backing, due to the contacts they have got, they have whole teams of people Just dedicated to promoting your music on a street level and online. With the Internet coming In and playing such a vital role, there are programs such as Spottily did you see them as a threat or an opportunity? People being able to listen to your music for free and legally? In the modern day music industry you have to take any opportunity to get your music out there.
Obviously no-one is a massive fan of illegal downloads, over the next couple of years I think you will find there will be more ways in combating illegal downloads. But the internet is harnessing its potential even through outlets such as namespace or Spottily, where people can listen to your music for free. Its a major aid, its free for us to use as well. Was Namespace a big way of promoting the band then? Definitely outlets such as Namespace have probably been one of the biggest ways of they need to know about the band, whether that’s our history or our up and coming tour dates.
Ninth the amount of money made from record sales decreasing what are the other Nays you plan to make money as opposed to record sales at the moment? Playing live. The gigging scene is as strong as ever. And merchandising goes hand in hand with gigging. That is probably our main source of money as a band. Do you think the concert scene has got bigger since downloading has increased? Eke I mean music is so accessible now. People can get to know about bands and connect with them more easily now. I think people these days would rather spend money to go and see a concert as opposed to buying a CD.
The live scene has never been as strong. Saw one of your records was licensed to be used by the Olympic 2012 committee? Is licensing of music a way of combating the loss of sales? Think for the record labels licensing is huge now. It is Just another avenue to make profit. As a band we Just wanted our music to be heard and it was great promotion to be associated with the Olympics 2012 pledge, it was a massive platform for us. I think taking as much free advertising as you can is useful, and if you can profit from simply haven’t your music played then great.
You get opportunities for advertisement all the time, it is necessary to chose those of which will show you in a good light. “here do you see the industry being in 10 years time? Where do you see the band fitting in with such a rapidly evolving business environment? Think the price for legal Amp’s will continue to decrease, to counter balance that I hind the gigging scene will Just continue to grow and grow. Your starting to see fans that really want to see band that’s can really play again, which I personally think is great.
Appendix 2 Profile – Joseph Green. Sales Manager of Independent Record Label True Thoughts IRU Thoughts is an independent record label. What are the main differences between independent label’s and major record labels? How do you think the Digital Music Revolution has affected both parties, is one in a better position than the other? Independents have more flexibility because of their smaller infrastructure. We can ell 3,000 copies and make a profit. Major’s can’t afford to do that so they have to play thousands of records.
This causes them problems but can also create the sort of exposure for artists which can be harder to achieve for independents (with some exceptions). The major’s have global infrastructure and reach which is enviable in some respects. Ere digital revolution is pushing prices down. For us, we have always had to compete Ninth piracy so are used to it but the majors had some very good years in the ass, ass, ass so must have had to economies as a result of digital. Digital sales now account or about 20% of our sales income and are growing but physical sales are still strong. He main negative effect on us has been the demise of record shops and then distributors which makes it harder to continue the traditional methods of selling music. Things like Last Fm, Spottily etc will change things even more – Spottily is a kind terrifying prospect from a label perspective but as a consumer it sounds very interesting. Another interesting idea is what Nine Inch Nails did – offering different price tiers for different levels of product – ii $300 for a deluxe package for Auber fans, whilst some racks are given away for free (and other levels in between) Every solidified Record Label has a business model.
I see many major labels are starting to shift from the recording industry towards the concert industry. How has [Our business model had to change since the Digital Music Revolution? It hasn’t really, we are 10 years old and digital has always been around. We are having to get used to giving more music away. Licensing is a v important part of our survival, as is publishing. There is a definite move towards ‘music companies’ dealing in all aspects of an artists career, from record sales, through publishing, touring and researched (the much discussed ‘360 model).
It sort of makes sense for us that we get some reward from all areas of income in exchange for the building the artist brand through record sales and marketing (although it is important to offer a strong service in exchange for this reward). We have started a booking agency and are starting to do merchandise for some artists. Ninth CD sales in decline what is the future of record labels like yourselves? How do Ho plan to stay relevant in the changing environment? Our sales still have room to increase as we develop our international presence further.
Whilst I-J sales are declining, this will be our biggest year in the US, France, Australia as we are still growing there. Keeping up with digital developments, making the most of every opportunity, licensing are all important. I can see the landscape being quite different in 5-10 years though, it is hard to say what will happen. And consumers to pick and choose what they want to listen to (for free if they wish in most cases). Arrowhead’s unorthodox release of their “In Rainbows” album is a classic example. Has the power shifted from Record Labels to the consumers who buy the music and the musicians who make it?
There is an argument that labels act as quality filters – when an artist reaches a certain level of output (creative, professional, viable) then it is a sensible business move to invest in them. If there were no labels it may actually be harder for people to access good music that they are into as they will need to trawl through thousands of musicians ranging in quality. Also it is worth noting that what Radioed did was hugely related to them being one of the biggest bands in the world. It is unlikely to Nor for any of the acts who are signed to TTT, particularly if they were starting from scratch.
Also many of them would not be able to fund it without our help and would not have had the chance to develop to where they are at now. Last question. Being part of an independent record label. Overall do you see the Digital Music Revolution as a positive thing, are you pleased it came about, or would Ho prefer things to go back to how they were with CDC, tapes (even vinyl! ) ? I’m not that old so I’m good with it – Just the way things are, but I can imagine 50 year old execs at the majors wishing for the good old days!
We still sell vinyl! Appendix 3 Profile – Daniel Johansson. Worked in the Swedish music industry since the end of the nineties, first in a recording studio as an engineer, and later on working with the largest music festival in Sweden, the Holstered festival. (www. Rocketry. SE) Since 2005 Daniel has been writing on my PhD and also running the company . Treatment. Com. Could you explain the traditional record labels business model and their advantages / disadvantages, and the new business model with advantages / disadvantages? Possibly with examples) Ere traditional model was pretty straight forward, you wanted to sell copies of an album or single. The model was really based on making hits and letting the hits make up for all the projects that never succeeded economically. The label also had control over the distribution and value chain, and had to work pretty much only towards the radio and in the seventies and eighties also towards TV. The whole structure of the record company was based on selling records, and the nineties saw a incredible development with this model.
In some senses one can say that the industry that is still coping with finding new revenue streams is an industry that grower and plopped as a result of the CD paradigm. Since then a shift away from the sale of hysterical records has meant labels have had to completely re-structure their business Could you explain the advantages / disadvantages of the new model on the artists and consumers? Ere disadvantages is that the model is much more complex with lots of different Nays of getting the music out to the audience. I have attached a study I have made on the Indies label situation in Sweden when it comes to this.
The advantages is that the distribution, at least in theory, can be made possible with much lesser resources. Also, fans and the audience can take part of the marketing and distribution of the music, something that can be used in great ways. Also, it is possible to find new artists and music in a much easier way than before. Nat do you see as the main ways people will access music in the next 5-10 years, do {o think programs such as Spottily will start to take away the market share from peer-to-peer file sharing programs or retailers such as tunes for example?
Or do you think there will be platforms that may appear that we don’t know of as yet? En have already seen that this have happened as a result of Spottily in Sweden. In the I-J you also have a drop in file sharing of music, as in the US: http:// NNW. Businesslike. Com/ Also, the development of cloud computing and Web 2. 0 is Changing the listening behaviors. Nat do you believe will keep Record Labels relevant in ten next 5-10 years, how do Ho see them making their money and being successful? First of all their catalogues.
At the moment the labels with the most interesting and largest catalogues are the ones that are getting the revenues from the largest services as well as the upfront payments from a new generation services, like Spottily hat you mentioned, but also Comes With Music, Play Now Plus etc. Those record companies that except money from the sale of records is decreasing, and embrace a new way of thinking, who look for new opportunities, that aren’t afraid to invest and adapt a possibly outdated business model are more likely to succeed. hind we are moving from the copy paradigm to the usage paradigm. Instead of getting the largest revenue shares from selling copies I believe the largest revenues Nail come from the usage of music in different ways, for example streaming services like Namespace, Youth, Last. FM. This is a huge paradigm shift though, as it is Challenging the old copyright doctrine in several ways, hence it will take many years before this reality will be in place. Appendix 4 Erasmus Fleischer – a musician and freelance Journalist. Currently working as a Ph. D. Dent at the department of contemporary history at SГ¶deerГ¶ran University College in Could you provide a short statement on the effect of the economic downturn on the music industry? Ere music industry can be characterized by a changing business model, during a period of downturn, it is vital for businesses not to focus excessively on short-term earnings, and control costs excessively in significant areas such as research investment. Technology is changing all the time, any organization within the music Industry can get left behind if they don’t keep up to date with the newest ways to link artist to consumer.
Those organizations who are really clever will be looking to invent new ways to benefit from the advances in technology or even creating technological advancements themselves. Appendix 5 FOCUS GROUP I: My dissertation is looking into the effects the internet has had on the music industry as a whole from a consumer perspective and a business perspective as well. Hopefully from this focus group we’ll get more of an idea as to what direction the music industry on the whole going.
If we start by going round and Just shortly explain [Our background in music whether that be as a profession or Just general interest. DC: Personally Vive got a great interest in music but my major contribution here is as a potential investor. I am aware that Traditional Record Companies are in decline in terms of their growth and profit. But I can see huge opportunities, everyone loves music, new technology is emerging. What I want to get is some idea of the level of risk involved, is it another dot com thing where people thought they would make huge amounts of money but ended up loosing huge amounts. B: Im here as a music consumer who is very much still in the dark ages, I like music and buying music, but still only into buying CDC. It is all very new to me but I am very interested none the less. C: I am here as a musician I have worked in bands, in studios and theaters. But also have an educational hat, training teachers how to use technology, training kids how to use music technology in schools and I also work as a chief examiner in A Level USIA technology and of course as a consumer, as well as working musician.
GIG: Would describe myself as a passive music fan, usually find myself hearing stuff on the radio I like and maybe downloading it on the net, rather than investing too much time and effort into really getting to know artists. RSI: For me music is a strong passion, but as a student ease of access has become Important, affordability when purchasing is also a huge factor now when accessing not necessarily those artists that have major backing of labels but whose talent is still there.
I do sometimes think about supporting the artists that aren’t always lucky enough to have that finance. I: That’s great. Just to get people talking about music as a start if you could Just think about an album that you have downloaded or paid for in the past that is a favorite of yours. If one or two of you could maybe speak up as to why it is a favorite, what memories you have of the album and why it is special to you in that way? GIG: Your probably going to laugh but Lionel Riches Greatest Hits.
Its true though we got it from Deco’s last summer for EH and every barbeques we had during the summer we had it blaring out and for me its an incredible album. In all honesty the main reason we got it was because it was EH, we were buying a television from Tests, En were looking through the CD rack and someone saw it for EH, we couldn’t say no. I: Is there anyone else? DC: Mine wasn’t downloaded either, mine was the cliche one “Sergeant Pepper”. I heard it from a mate, it was the Battles going to a complete different level than they have been to before.
I remember spending ages going through the people on album cover, there were 51 different personalities on the record cover which I always tried to identify whilst listening. Also you were definitely part of the group if you had that definitive album. C: That was the same year Pet Sounds came out! Which technically was reckoned to be the better album DC: Well they were rivals weren’t they! And Vive still got that vinyl record, I still have that physical copy, the album cover, booklet inside the sleeve, everything! S: Well its interesting you speak on rivalry. Probably added to people being interested in the music and there is other circumstances in music where the interest from rivalry has made people go out and buy music. I: 50 Cent and Kenya! B: There was Blur and Oasis! S: Nas and Jay Z 16: Yeah Nas and Jay Z actually brought about actual followings didn’t they, people really affiliated with one or the other. Of course there was so much interest generated from their so called feud that people went out bought both artists albums and supported both. Isn’t it. To be fair I think Oasis probably did actually hate Blur. I: Well if you think about those albums that you look back upon as favorites. Radioed, for those that know, a cult group, a group that people follow closely. Last [ear via their own website off their own backs from their own money, decided to lease their album via digital download, only difference being they offered it on a pay as much as you want basis. It was up to the consumers how much they would like to pay, some obviously bought for free others paid a substantial amount.
If you think about your favorite album if you had the opportunity, you knew the money was going to the artist how much would you pay? DC: EH for Lionel Archie! GIG: Lionel Archie is a very rich man I don’t think he needs my money B: So if you were paying this money it would be supporting the band? I: Yes B: Well that makes a big difference doesn’t it? I: well Does it? B: If they were a struggling band id be tempted to pay even more, especially if I liked it! 16: Its a major shame I think because its the major bands that are able to do these kinds of things in a situation like this.
I think in reality if it was bands that you followed closely, maybe knew locally, went to their concerts without much financial backing and you knew your money would help them along to get exposure I think that Mould encourage me. But in this circumstance with them being major I don’t think I Mould be inclined to pay. RSI: Well if they were Just starting off and they didn’t have the national recognition hat wouldn’t really work would it DC: As an investor this really interests me, because basically I want a return, I want customers out their to part with their cash.
But surely if people want something for free they’d take it wouldn’t they? I: Well in terms of Radioed, I guess fans felt the amount of time and effort put into the album, the amount of enjoyment people got out of the album caused people to show it by parting with their cash. Pack of biscuits. It means more than that, at least it can do. C: I agree you when you are buying a record you are almost buying into an experience. Something your not doing when you buy a packet of biscuits. DC: Radioed is a brand though isn’t it? What’s the difference between Radioed as brand and Micelles as a biscuit? C: I think one of the things that goes with popular culture is the identification people get. The feelings they get from music, what they are singing about, what certain bands represent, how they look. Its something emotive you don’t get with a packet of biscuits. Threes an identification with the people and the music. Your buying more than Just a commodity, your buying an experience DC: So its a football club is it? C: Well there are similarities yes DC: As an investor I’m trying to understand the relationship between the product and the customer and in this case the product is the band isn’t it? C: Well that’s what I was going to ask about the investment. A lot of bands are now not seeing a record sale as a sale of a CD, from a record sale they are picking up revenue from everything that goes along with that, maybe a t-shirt sale, tickets sold for their tour. If you were an investor you would be investing in Radioed limited, the record is almost a Loss Leader, you wouldn’t be investing in the record you’d be investing in everything that goes with it, such as money made from the tour. I: Well is that the way it is now? C: Well I don’t know, I think the successful bands release albums knowing their not going to make an awful lot from the actual record sales I: Well you’ve even got bands now, offering it for free RSI: Prince C: McCoy RSI: As an investor if you were looking to invest Music Industry, if everyone was doing “hat Radioed were doing, you’d surely pick those bands that provided an emotional response from people, those bands that had that quality, that were more than Just a brand, like you said a biscuit. You’d be investing in an artist that was able Nail increase.
The only artists that will survive will be those that provide that quality. DC: Yeah I see that but I still can’t see where id make any money. I can see how the band makes money, with copyright etc they’d get a tiny percent overtime a song is played, I don’t see how id make money from that personally C: Well I suppose you’d invest in the same way you would invest in any other business. You would have to work out what your putting money into. For example En your putting on a show in the west End, they are looking for investors for that how, the same way bands may look for backers when putting on a tour.
Look at the reformed “Police” they’re running into millions based on the tour alone, if you backed that you would of made a lot. I: So what your saying is record sales are almost non-relevant now? C: Yeah I think. If you look in the record stores threes nothing left. I: At the same time like with the cover of Sergeant Pepper and that being memorabilia. You look back at the cover, the emotional memorabilia of a record, that [o don’t get with an MPH downloaded album. DC: But vive got a vinyl collection that is useless to me now.
But I don’t know whether its a generational thing but I like having a CD booklet that I can physically touch and read. But is that important to the new generation. Does the ease and accessibility of going to tunes to get an album, take away the problem of wanting that physical aspect of a record? RSI: Well at the click of a button I can download an album, and if I want background information on an artist I can go straight to Wisped. What do I need a booklet for? DC: Are you interested in lyrics? RSI: Yeah but I can get that online too.