[4 of 10] Music: Product or Service?

Prior to the digital revolution and the World Wide Web (WWW) as it is now known, the music industry enjoyed fifteen consecutive years of sales growth with the introduction of the compact disks (CDs) in the 1980s. However, roughly twenty years later, the proliferation of large-scale web portals (e.g. Google, MSN and Yahoo!) and interconnected networked economies (e.g. peer-to-peer services like Napster) gives rise to the view that access to content may (at some point) replace ownership. In other words, music could become a service and not a product. With new ‘freemium’ services like Spotify providing unlimited access to music, depending on user preference, the evidence suggests that a change has begun to occur.

Further reading: Leonhard (2005); Lessig (2008).

[3 of 10] Peer-to-Peer Networks (P2P)

Copyright infringement is a significant topic when put into context with P2P networks, not to mention the countless studies that have found a negative impact on sales as a result of online sharing. The difficulty with policing these networks comes from the sheer size and scope of the operations; it’s claimed that Napster was downloaded 70 million times, following its widespread distribution in 1999. Between 1999 and 2002, it was reported that annual global music sales declined by roughly $2 Billion. Illegal file sharing via P2P was attributed largely to this fall, although other aspects were also considered as likely factors, including: counterfeit CD production, changing consumer behaviours and a weakened economy. Conversely, during this period it was also observed that the groups topping Napster’s ‘download chart’ were the same groups receiving significant record sales boosts offline.

Further reading: Alderman (2001); Casadesus-Masanell and Hervas-Drane (2010); Liebowitz (2006); Obelholzer-Gee and Strumpf (2007); Rob and Waldfogel (2006); Strauss (2003); Vaccaro and Cohn (2004); Zentner (2006).

[2 of 10] Protecting Copyright

The copyright industry has traditionally monetized the exchange between creator and consumer through licenses and the subsequent payment of royalties for mechanicals (monies paid by a recording company for the right to use a song in a recording) and performances via MCPS/PRS and PPL. This royalty payment structure, however, has been severely undermined in the new digital economy, particularly with respect to mechanical royalties. The way in which content can be easily copied and distributed to users, via the Internet, causes difficulties for copyright owners and investors (i.e. publishers and recording companies), who seek to profit from the sale of units and collection of royalties.

At the heart of the copyright industry lies the need to maintain a balance between protecting intellectual property (rewarding creators for their endeavours so that they have an incentive to create), and the interests of the wider society (who benefit later from the free-flow of information to the public domain). Value is perceived from the point of view of economic investment, particularly in the UK. Hence, it is closely related to commercial utility. The law provides an opportunity for authors to profit from their work: it is the author’s right to copy. In recent times copyright law has been tested greatly; its wide application will continue to challenge the way copyright holders preserve the status quo, whilst responding to the increase in demand for access to new music services in the future.

Further reading: Davis (2005); Meisel and Sullivan (2002); Passman (2011).

[1 of 10] Challenges of the Digital Age

Since the late 1990s, access to digital information via the Internet has prompted fundamental changes in the way that music is produced, distributed and consumed. The technological limitations in the past, such as the complexity of recording, manufacturing and distributing music to the public, were perceived by the content industries as a major controlling facet – not a hindrance. However, as the demand for content and access has driven technological advancement, the industry has argued that it has also proliferated the spread of illegal downloading via the Internet. Certain contributions, in light of this, identify the growth of file sharing as a major cause for the unprecedented decline in sales. These challenges – as well as other external factors like the current economic pressure and the growing number of alternative consumer products available – still continue to impact on the future of the music industry today.

Further reading: Alderman (2001); Casadesus-Masanell and Hervas-Drane (2010); Jones (2002); Lessig (2008); Leyshon (2001); Leyshon et al (2005); Liebowitz (2006); McCourt and Burkart (2003); Moltini & Ordanini (2003); Obelholzer-Gee and Strumpf (2007); Rob and Waldfogel (2006); Zentner (2006).

Ten short articles by ACA Music

We would like to share some key issues over the coming weeks by publishing ten short articles relating to our industry. The titles and subjects includes the following:

1. Challenges of the Digital Age
2. Protecting Copyright
3. Peer-to-peer Networks (P2P)
4. Music: Product or Service?
5. Converging Industries
6. Users vs. Consumers
7. Live Music vs. Recorded
8. Live Music: Saviour of the Music Industry?
9. 360-degrees: from ‘grass roots’ to Superstar
10. Raising artist profiles and getting paid

Further discussion can be found on our new Facebook page.

Video Submissions

We are asking for artists to update us with any promotional video that they have available (either a music video or professional live footage). Before doing this, please ensure that our submission form has been completed: here

Send your material to us by post on a DVD (or Data CD where necessary or via a file transfer service). Videos that aren’t formatted for a DVD player are accepted in the following file formats: MPEG & MOV. Include your ‘full name’, ‘email address’ and ‘artist title’ and send to: ACA Music, C/O Video Submissions, Blenheim House, Henry Street, Bath, BA11JR.

Touring – Eliza Doolittle (w/ The Amateurs)

Eliza Doolittle embarks on her headline tour this month. Below, The Amateurs & Eliza on tour at St. Andrews & Edinburgh University: