The Changing Face Of The Music Industry

by
Music Streaming
Ellie Turner takes a look at the apparent crisis facing the music industry as record sales plummet.

Since his death in early January, the Internet has been rife with Bowie quotes. Whilst reading an article on NME entitled “Five Jaw-Dropping Times David Bowie Predicted The Future”, I found myself struck by his 2002 prediction that “music itself is going to become like running water or electricity”. Today in 2016, this prediction has generally been proven to be pretty accurate, thanks to world globalisation changing the face of the music industry forever. Walking into a store to buy a CD is now a thing of the past for many, and we have access to a whole range of music on the Internet at just the click of a button. Whilst this is seemingly great for musicians and music lovers alike, I found myself wondering just how positive an impact these developments have had.

Developments in communications, particularly the Internet, have resulted in a massive decrease in the cost of distributing and replicating music, as well as a massive increase in the size of the market that can be accessed by musicians. Middle-man companies such as Apple and Spotify have made the distribution of music even easier, leading to increased accessibility to consumers all around the world, and therefore a presumed greater overall income for musicians. The Internet has meant that it is now easier for new artists to be discovered and make money – there are many platforms available for them to post their music online, free of charge.

However, these developments in communications have also made it a lot more difficult to police unauthorised reproductions of music. According to an NPD study, 1 in 5 people pirated their music from sites such as BitTorrent or LimeWire in 2005. The impacts of this movement of music from physical CDs to online files meant that the increased accessibility to consumers did not have the expected impact of increased income for the music industry. With people being able to rip their music for free with essentially no repercussions, many people see no point in paying extra money for a legal CD or download, causing massive damage to the market. In fact, global recorded music revenues did not increase between the years of 1999 to 2012, with the revenue in 2012 being placed at an estimated $15 billion- nothing in comparison with the ‘boom-times’ of the 90’s, where revenues were close to $40 billion (IFPI Report). Worryingly, it even stretches much further than this – one 2007 study by the Institute For Policy Innovation estimated that illegal downloading was costing the whole US economy $12.5bn (the equivalent of £7.3bn) a year.

Even the legal music download and streaming sites have massively decreased the profit received by musicians compared to what they would have received by selling a CD, and I was shocked to find that Spotify pay artists between just $0.006 and $0.0084 per song play. According to the Recording Industry Association of America, since the introduction of the iTunes Music Store on April 28 2003, music sales have plummeted in the United States – from $11.8 billion in 2003 to $7.1 billion last year. These shocking figures have left many wondering what they can do in order to combat these negative impacts of developing technologies. In a recent effort to take a stand against this globalising music industry, Taylor Swift controversially removed all of her music from Spotify, stating her belief that “valuable things should be paid for… music should not be free.” Scott Borchetta, the CEO of Swift’s record label Big Machine, told Time that the label earned only $500,000 from domestic streaming on Spotify in the past year, despite Swift being one of Spotify’s most popular artists, with 25% of listeners having streamed her songs.

These concerning facts and figures have left experts and music fans alike questioning what the future of the music industry holds. Back in March 2015, the Recording Industry Association of America reported streaming and downloads together accounted for 64% of the total US music market, with streaming revenue passing CD sales alone for the first time. This certainly suggests that the CD looks set to soon become a thing of the past. As an avid iTunes and Spotify user myself, I am not for one second insisting we all stop using them entirely. However, I do think that CD and vinyl need to be more appreciated, and if in buying them we are giving artists more support then we should definitely be looking to add a few more CDs to our collection from time to time.

Updated piece, originally published in ThinkGeo.