innovation in the online music industry: past, present and future by francesca ayling

1. Innovation in the online
music industry: past,
present and future
By
Francesca
Ayling
u1309306

2. Historical development –
‘piracy’
“Since the late 1990’s, a few core themes have
grown to dominate much commentary and
discussion on the music industry. First there is a
marked decline in the value of record sales that has
raised questions around the long-term viability of the
music industry with online ‘piracy’ seen as the
primary factor in this contraction.” Ref: (Rogers,
2013)

3. Historical development –
‘piracy’
The first instance where we see the impact of the digital
age on the music industry is in the early 90s, when there
starts to be a gradual drop in record sales across the board
especially in the main music territories, USA & UK.
This is due to the spike in music ‘piracy’ and the lack of
systems in place to prevent this from happening.
This bought to light a lot of issues for record labels as they
had to learn to adapt to the new digital age and figure out
new ways to create income for both themselves and for
their artists.
Although the ‘piracy’ age came about in the 90s it still
happens today, although with the introduction of steaming
services and more ‘instant' forms of music media it is
slowly reducing. However, it still has a massive impact on
music sales.

4. Historical development –
iPod and iTunes2001- introduction of the iPod:
January -iTunes digital jukebox software introduced
October -Apple presents iPod, offering "1,000 songs in your pocket
2003- introduction of iTunes:
April 28 -Apple launches the iTunes Music Store with 200,000 songs at 99¢ each, along
with the new third-generation iPod that is thinner and lighter than two CDs and holds 7,500
songs
-iTunes sells one million songs in its first week
June- One millionth iPod sold
September- iTunes downloads top 10 million songs
October- The iTunes Music Store becomes available to Windows users
December -iTunes downloads top 25 million songs
-Number of iPods sold through 2003: two million ref:(iPod +
iTunes Timeline)

5. Historical development –
iPod and iTunes
In 2001 we were introduced to the first iPod, although there had been MP3’s available
before this time, and ‘piracy’ was in full swing in all creative media industries, none really
took off as much as the iPod did.
This was a complete change in the way in which we consumed music, and even though
now the majority of the general public do not have a separate iPod to their phone, it still
paved the way for the ways in which we consume music today.
This was later followed up by the introduction of iTunes in January 2003, in the first week
alone iTunes sold around 1 millions song, and by the end of that year apple had sold a
mammoth 2 million iPods.
The start of the 2000s was probably the most recent jump in the current digital age.
However, this new format of downloading and listening to music was not canceling out
the use of pirated music, which was still a really big problem in the 2000s.
However, this did give the industry a new format for distribution that they had been
looking for as downloadable music had already been being included in the billboards
since 1998.
In 2007 the French president Nicolas Sarkozy said “we run the risk of witnessing a
genuine destruction of culture…. The internet must not become a high tech wild west, a
lawless zone where outlaws can pillage works with abandon, or worse, trade them with
total impunity. And on whose backs? On artists’ backs.” This comment was thrown
around a lot after 2007, which was probably the hight of the ‘piracy’ issues internationally.
Ref: (Rogers, 2013)

6. Historical development –
streaming services
“According to the music business body the British Phonographic Industry (BPI),
Britons streamed 14.8bn tracks last year, almost double the 7.5bn of 2013, as
internet connectivity improves and becomes pervasive.”Ref: (Arthur, 2015).
Streaming services such as spotify, YouTube and Google play now completely
dominate the way in which we consume music as a generation. More and more
people each week are subscribing to these different services.
Considering that up until now the majority of music had been pirated for free it
makes no sense that people would suddenly start to pay for services. However, we
live in a age where convenience and speed is king, and that is why we have had
the slow shift to streaming services over the past few years. Not only within the
music industry but also with services such as Netflix
and apple TV becoming more and more affordable
and available, the way in which we consume all
forms of media is rapidly changing.
Ref: (Miller, 2015)

7. Historical development –
streaming services
Ref:(Chart: the Rapid Rise of Digital Music , 20

8. Online social media
“The phenomenon whereby the audience not only
passively consumes culture but also contributes to
the production of that culture is often referred to as
participatory culture (Jenkins 2006). Participatory
culture is not at all restricted to music but can be
seen in other cultural spheres such as film,
videogame or book arenas.” Ref: (Wikstrom, 2013)

9. Online social media
Social media is a huge part of all industries online presence, and its not
uncommon for a lot of companies to have whole departments completely devoted
to their online marketing.
For the arts industry as a whole, it is fast becoming the best and most dominant
form of marketing that they have.
For the music industry as a whole there is no way an artist will be able to sign a
record or publishing deal without a fair sized social media following. The main
ones being Facebook, twitter, linked in and YouTube, for the music industry.
However, theses social media platforms can also cause a lot of trouble, especially
for the bigger labels as we are seeing a lot more artists come into fruition off their
own backs as it is so easy and simple to record and release your own music.
Artists form all walks of life are making a lot of money through social media and its
definitely something that the giant labels still need to adapt to.
One of the bonuses for labels and artists alike with platforms such as Facebook, is
the ‘targeted’ advertising which is a great way to get to their fans, or potential fans
that have had an interest in something similar.

10. Online social media
Ref: (Cohen, H, 2014)

11. Music websites
There are many different music based websites out there,
from services for listening to music such as SoundCloud
and YouTube, to review sites and sites owned by labels.
There are also a lot of industry based platforms that make
the life of an artist even easier, such as PRS for Music.
https://www.prsformusic.com/Pages/default.aspx

12. Brand building
The online space is one of the most important tools in modern
culture.
Every aspect of almost every industry has some sort of online
presence.
Its not only important for an record label or music business to
build a brand online but it is also paramount that an artists
has a good and positive online brand.
In terms of the artist it is important that they have a good
social media presence and that it is managed well. Social
media can be the making of an artist or their downfall, so it
has to be managed in a way that ensures that negative press
doesn’t occur.
Ref: (Ducker)

13. Who’s using the digital
marketplace ?
EVERYONE!!!!
Everyone from the government to the small time business
owner are using the internet. Its become not only our main form
of communication but also our shopping space and our source
for news.
In terms of the music industry, even the little niche bands still
have an online presence because there is not better way to
communicate to fans than through social media.
Most people use the internet not only to communicate with their
artists but also to buy their merchandise and to discover new
artists.
The digital age has been a complicated transaction that the
world is still coming to terms with, and that is still growing every

14. Ref:

15. Bibliography
Arthur, C. (2015, Jan 2). Streaming: the future of the music industry, or its nightmare? Retrieved Mar 25,
2016, from The Guardian : http://www.theguardian.com/technology/2015/jan/02/streaming-music-industry-
apple-google
Chart: the Rapid Rise of Digital Music . (2014, Mar 14). Retrieved Mar 25, 2016, from thatericalper:
http://www.thatericalper.com/2014/03/24/chart-the-rapid-rise-of-digital-music/
Cohen, H. (2014, May 27). Retrieved Mar 25, 2016, from Heidi Cohen: http://heidicohen.com/social-
media-platforms-2014-research/
Ducker, C. (n.d.). The Easy-to-Follow Guide to Building an Online Brand for You and Your Business .
Retrieved Mar 29, 2016, from Chris Ducker : http://www.chrisducker.com/building-an-online-brand/
Internet Quotes #96705, Quotes . (n.d.). Retrieved Mar 29, 2016, from Colorful Big Bang Fish :
http://colorful.bigbangfish.com/Internet-Quotes-96705/4199/
iPod + iTunes Timeline. (n.d.). Retrieved Mar 22, 2016, from Apple:
https://www.apple.com/pr/products/ipodhistory/
Miller, A. (2015, June 11). There is no loyalty in Music Streaming. Retrieved Mar 25, 2016, from
mosaicmarketing: http://www.mosaicmarketing.co.uk/sales-promotion-blog/2015/jun/there-is-no-loyalty-in-
music-streaming.aspx
Rogers, J. (2013). The Death & Life of the Music Industry in the Digital Age (Vol. 1). London: Bloomsbury
Academic.
The Easy-to-Follow Guide to Building an Online Brand for You and Your Business. (n.d.).
Wikstrom, P. (2013). The Music Industry Digital Media and Society Series (Vol. 1). Cambridge : Polity
Press.