The music industry is based on creating and exploiting the music created by composers, singers and lyricists. If you are looking to understand how the music industry has changed over time, it is essential to know that the music industry is primarily a combination of three musical arms.
These include the recorded arm of the industry that records and distributes music to listeners; the liscensing arm of the industry that focuses on licensing arrangements and compositions to enterprises; and finally the live music arm that centres on production and composition of live concert tours
Different Segments of the Music Industry and Their Significance
In the age of pre-internet music, it was the recorded arm of the industry that was considered to be the most vital as it brought in maximum revenues. Most bands and artists wanted to sign a contract with record labels as it meant catapulting their careers often on the international level with the record label’s foreign distribution channels.
The music licensing business was then much smaller and the music publishers essentially dealt with businesses like themselves with no interaction with consumers. Their job was to ensure that license fees were collected on a song being used and that the fee was rightly distributed between singers and composers. The third arm of live music primarily collected its revenue from concert ticket sales.
Impact of the Internet Age on the Music Industry
In the mid-twentieth century however, the internet emerged to hold a challenge to the music industry as a whole. It impacted the way music was distributed to consumers in the short term. The internet gave netizens more access to music than ever before.
Simultaneously, it made it more difficult for artists to make money and the commercial side of the music industry started suffering. The reason being that people involved in making records were remunerated in royalties but due to music piracy these royalties could not be paid. Thus, the recorded sector of the music industry received a bashing due to rampant online piracy while the other two arms of the music industry initially remained unaffected.
Over time though, the other two sectors of the music industry gained more significance and power. Revenues from music licensing have doubled over the past 15 years. The reason being that today there are more TV and radio channels, video games and internet websites that require music more than ever before.
Today, music publishers have become an all-in-one shop for music intellectual property rights, from whom media outlets can through a single contract clear all music licenses. Hence obviously the music licensing sector has become the most profitable sector of the music industry.
Likewise, the live music segment of the industry has also grown and become the largest part of the pie. This is because live music is simpler to control than recorded music. More so as a popular musical band can increase their earnings easily by doing a greater number or tours or by increasing the price of their tickets. What’s also noteworthy is that in the digital age the demarcations between the three segments of the industry have blurred.
An Expanding Market for Digital Music
In 2003, Apple became the first company to create an online service for sales and distribution of music services legally. That was the beginning of iTunes music store. In 2006, Spotify was created with the aim of being a legal, ad supported service, which was free for the music consumer but brought forth licensing revenue for the artists holding copyright.
Thus, Amazon and iTunes with their cheap downloads are today being seen as a way to curb online music piracy. The advantage for people is that they can specifically download just the songs they like instead of having to buy an entire album. Today, consumers also listen to and watch music on YouTube, Shazam and television and radio services.
Additional developments like internet streaming services and radio like Spotify or Pandora who offer ad based and paid subscriptions to their music library have also changed the music scene.
In conclusion one can state that the recorded music industry has transformed significantly over the past many years and that change is the only constant.
