The Impact of Technology on Music Publishing
Discuss and evaluate important contemporary topics in music publishing?
Music publishing is a constantly evolving industry. From the ancient times to the present era music publishing has gone through numerous changes for a variety of reasons. On one side music is a primary form of an expression of art; since the dawn of civilization, music has been one of the most significant means by which cultures have defined themselves. On the other side, in the modern world, music is a commercial industry generating billions of dollars in revenues for singers, artists and music publishers and companies.
The objective of writing this paper is to study the recent developments in the modern music industry.
The music industry in today’s world continues to adapt to the seemingly endless digital landscape and consumer usage trends. With the use of information technology, a lot of new opportunities have evolved for both the music creators and consumers, however piracy has a profound effect on the industry.
A great deal of consolidation has occurred across all sectors of the business in the last years, but new players continue to emerge with inviting value proposals, adequately adding to the altering methods in which music is made and purchased. To present a general overview of the current state of the music industry, the industry will be categorized into its three major areas: recorded, published and live concerts.
In analyzing some major issues which affects the music industry, we shall review how such developments affect the structure and performance of the industry. We will discuss the demand of customer, e-commerce role, issues of piracy and the importance of copyright. We will also study the response of artists and the changing situation of collection societies.
The music industry has gone through a number of changes in the last few decades due to the substantial changes in technology. The ways in which music is composed, marketed and used today is different form the ways it was used to be years ago. The methods of making and stocking the music has undergone numerous changes from old to new formats such as the old records, the cassettes, the CD’s and so on. These changes have led to significant structural changes throughout the industry's value chain.
The music publishing industry has also experienced a downfall in the recent years, but after the decline, music publishers had began to diversify the channels of revenue in order to place deals with application makers, channel partners, streaming services, greeting cards, and other sources other than the traditional model. As a result, the music publishers have fared better since the last decade. The major players of the music industry like Sony, Universal have publishing divisions that accounts for one third of the net revenue, with a high revenue than the overall business of the company. The publishers are positioned to generate higher returns publishers are inherently positioned to generate higher returns on their investments than a recorded level. The publishers are limited to sell their music to the advertisers and broadcasters and they don’t have to recover the large costs spent on the development, marketing and distribution of the music. With the use of information technology, the music publishing industry makes use of it’s profits in advertising and entertainment outside traditional deals are making the publishing sector more significant than ever.
But these developments have not affected that much as compared to the potential long term impacts of the revolution in communications technologies on the music industry which began a decade ago. The digital revolution in music has given the ability to store musical sounds in digital formats, to make copies and produce them again using home PC’s, and to transfer them over the internet is having significant effects on all people in the industry, from the composer and singer to the end user.
The internet has provided two ways to access the music. One is downloading the music files which may be authorized (if the source or the owner of rights of the music, has allowed it for downloading against a payment or free of charge) or unauthorized, (if the file is downloaded without the owner’s approval or knowledge). An example of unauthorized access is the transfer of the music files via email or other means of memory storage devices. The other means of accessing music is through streaming on internet. Streaming may be interactive or non interactive. In interactive form the users have the ability to choose and select the music they want to listen or download and have the permission to store the music files on their home PC. In non interactive streaming the user is not able to choose the music of his choice. They can only listen to the music which is similar to the music broadcasting on the radio. This type of accessing music is also known as “webcasting” as the users listen to the music via web.
The storage and transmission of music over the internet has been made easy by the introduction of MP3 format which is a program used to compress the size of music files in the digital form. The MP3 technology has made the music files quick and easy to transfer and store. The MP3 files do not require the dedicated system for sound production neither it needs any advanced systems for its transmission. MP3 files can be sent and received on the internet via ordinary telephone lines.
The relation between music and brands is one of the most important factor as the the industry continues to develop and experiment with alternative revenue streams. The benefits of a music band relationship includes the increase in income and some free products or services, while the brand gets increased awareness and legitimacy among the artist’s fans.
Consumers have the choice to access the music from a never ending arrangement of options which differ from each in one or another way. Despite of the abundance in choice there exists scarcity of unique appeal or feelings of true connection with artists in both live and recorded music. The stakeholders in this industry could generate increasing revenues as they provide the consumers a more fulfilling experiences. They can offer their consumers a variety of music applications, tailored playlists and more exclusive content.
To study the structure and dynamics of the music industry it is necessary to understand the ways in which the music is consumed and how the tastes and lifestyle of the customers determine what type of music needs to be produced. As Negus (1996) said, the activities associated with consumption of music, and notions of an “audience” for music, are by no means straightforward. To begin with, an economic analysis of demand would emphasize the importance of price, the price of substitutes, and income as determinants of consumption patterns. The rising real incomes are directly associated with the increasing demand of music. Similarly, the technology directly affects the demand for music as it has made the availability and consumption of music easier than ever. For example, the portable MP3 players and music application in cellphones had made it possible for the consumers to listen music while walking, jogging or driving. Further, the availability of music on web has opened new possibilities of it’s consumption. The effect of internet on the consumer behaviour is difficult to predict as the evolution of market is still in it’s early stages. Even though the consumption of music via digital downloads is a rapidly growing segment it comprises only a small portion of the total demand for music.
Demand for Music
The effect of changes in technology on the demand pattern depends on the growth rate of personal computers and internet in households and the different substitutes of the access to music they need. Further, the use and effect of music on the consumer behaviour is increasing all the time. This “functional music” can be used to control the buying patterns of consumers in departmental stores, the eating habits of restaurant patrons and the productivity of employees in offices, shops and companies. It is a small but growing component in the overall demand for music. The technology has a significant role in the demand of the music.
The internet provides a number of different online platforms for selling the music to the customers. It serves as a means of cutting costs in selling the traditional formats of music such as cassettes and CDs over the internet. It acts an a substitute for the record stores and inventories. The organizations like amazon.com and buymusic.com sells cassettes and CD’s over the internet can keep costs low as they don’t have to maintain the physical locations. When compared to the conventional retailers they offer instant access to the global market. As an alternative to the traditional retailing system internet also provides the delivery of products ordered online. The predictions to the growth of the e-commerce in the music is difficult to make and any precise forecast of the business may be wrong. Despite of some problems in the online selling organizations development of the online market for music is on the rise and it will continue to grow in the long term. The new market may praise the current configurations in the music economy. For example some websites offer free MP3 downloads to promote the artists and their websites. Moreover, as Leyshon (2001, p. 73) argues:
As the music record companies continues to work on their problems with the digital distribution of music and they may find resistance on the part of consumers reluctant to stop the process of music consumption which involves maintaining a physical collection of recordings. For such customers the collection of music files on a directory may not be seen as an acceptable substitute to the collection of music in physical form.
The piracy of music and videos cost the music industry a huge losses in revenue every year. The efforts to overcome the problem through strict copyright regimes have been only partially successful. When copyright regimes are lax or nonexistent, it is a relatively easy matter for pirated copies of music recordings to find a market. Even in a country like US where the copyright laws are supposed to be strictly implemented, the piracy sales during the 1990’s were found to be 27 million units which valued at $US280 million. The pirated sale in the year 2000 amounted to 1.8 billion units worldwide valued at around $US4.2 billion. The major regions affected with piracy were being Eastern Europe, the Middle East, Asia, Africa and Latin America. The new copyright laws have been made for piracy in some countries like South Korea and Thailand, however due to the absence of any national law against piracy in other countries the music publishers and record companies are not able to get proper returns.
Music and Brands
Copy right law guards the music industry against the threats of piracy. Copyright grants the artists certain exclusive rights to their creative work for a certain period of time. In the early years the music industry, the copyright law was imposed to protect the exclusive rights of the authors to copy their works, such as music sheets and sound recordings. In todays era of technology where the copies of any content can be easily generated, many organizations have questioned a Copy-Based system of rights and expect a Use-Based system of rights that they consider more appropriate. Further, there is lack of a global copyright system and a centralized authoritative database which can identify the musical works and the owners of the rights associated with them. This presented a problem for the shareholders in the music industry and anyone wishing to license musical works or wants to do business with the industry, as all parties would benefit by a streamlined identification and licensing regime.
The technologies discussed offer both the opportunities and challenges to the artists. Many songwriters and musicians have found it more creative to use computer softwares to compose and produce the music. Even the distribution of music have been transformed on the online e-commere websites. Many music companies and artists have set up their own websites and they offer free downloads of their music in the first instance. With the increasing number of artists in the music industry some of them wanted to take over the production and the distribution of music on their own and don’t want to be affiliated to a record company. This way of entry in the market proves to be relatively cheap and it opens up a virtually unlimited audience potential, chances of success in this way are relatively low. In these circumstances there is still the requirement of a consolidating element in the market, whether it is a record label, a commercial agent, an internet music portal, or whatever, to provide a collective channel for artists unable to make make it on their own.
The collection society associated with the music industry is a type of licensing body which grants rights on behalf of multiple rights holders in a single blanket license for a single payment. The rights holders join a collecting society as members and instruct it to license their rights. The collecting society charges a fee for the license, from which it deducts an administrative charge before distributing the remainder as royalties. Collecting societies are regulated with codes of practice that require them to adhere to certain minimum standards when dealing with their members and licensees. Copyright works can come in a number of different forms for example books, newspapers, pictures or music. There is usually one collecting society per sector which may be able to offer a collective license.
A complex challenge is at hand in the digital music paradigm to find business models that satisfy all parties involved. Rightfully so, all music industry stakeholders want to be compensated fairly, while a growing proportion of consumers increasingly demand a better music experience, and expect music to be available in a wide range of formats, easy to access across multiple devices, and free. As circumstances in the music ecosystem are incredibly varied and diverse, there may not be a paramount solution for the entire industry, but the ongoing facilitation of ideas and concerns is indispensable in working towards desirable circumstances for everyone. Technology and platforms will continue to improve, and hopefully alongside them, consumer satisfaction.
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