State of the Music Industry
In class, we investigated the current state of the music industry. Within the Guardian and the Observer, there was an article by Dan Sabbagh ,that illustrated the sate of the music industry in the 2011 music season.
Judging by the title of the article , we as the readers get the idea that the music industry is in trouble.
' Music is thriving, but the business is dying. Who can make it pay again?'
Underneath all the gilts and glamour about the digitial revolution, the music business is in serious financial trouble. Sales were down 7% last year in the UK and down by nearly 10% in the United States (which is the world's largest music market). Sony records- home to Simon Cowell and the Warner Music, behind Cee Lo Green and Plan B admitted their pre Christmas sales were down 10% and 14% respectively.
It has been a decade since piracy and the arrival of iTunes has destroyed the notion of an album in favor of being able to download the single/tracks. The music business has not found a method to repair the lost CD sales. Arcade Fire's ' The Suburbs' may have been album of the year at the US Grammy Awards and winner of the international album prize at the Brits, but only managed to sell 1.4 million copies worldwide." If the clocks were turnt back a few years before, that would have been 4million to 5 million copies sold" says the indie rock bands manager, Scott Rodger.
The music industry has roughly halved in size since the last days of a high sell of CDs. Boyband ' NSync's '- No Strings Attached album could sell more than 10million copies in 2000. it was hoped that one day, digital sales would pick up the growth as CD sales. However, in the US ( where all the music business trends start), download sale growth has all but stalls, posting just 1% growth throughout the whole of 2010.
Billy Bragg states "The record industry is now in a very serious situation. Partly these are problems of the industry's own making, resulting there is no longer. For example : the record-shop culture that has proved so important for many musicians." It is not just small record shops that are in trouble- he fall of Woolworths and Zavvi has been followed by problems for HMV- which last month stated that it would be forced to close 60 stores in the wake of a profit warning following poor pre- Christmas sales.
Group ' Take that' , is one of few bands that can still sell large quantities of CD's as their targeted audience , older female fan base prefers not to download songs online.
New Strategies
Radiohead released their second album ' The Kings of Limbs' as a download on Friday. Their first album as an independent band ' In Rainbows', was sold via an ' Honesty Box' approach- in-which people could donate whatever they though the album was worth - but was priced at £6 for an open mp3 downloadable format or £9 for a higher WAV format file.
The bands manager' Chris Hufford' described the new strategy as a ' logical progression' from the honesty box approach, but the band's decision shows that they believe there is an ideal minimum price point for their work. Radiohead would release a physical release of the album- with a special edition CD, two 10-inch vinyl discs and a host of artwork going alongside the CD, for a price of £33.
Internet Marketing: Last year Ellie Goulding , who likes to run almost as much as she likes to sing, hooked up with Nike. Through her Faceebook page , invited a small number of selected fans to run with her in seven different cites on her UK tour.
Tony Wadsworth - the chairman of the BPI stated -" Ten years ago all we did was make plastic and sell them to record stores. Now, in a business where over a quarter of sales are digital, we need much broader combination of ways to make money."
Music subscription services such as Spotify in Europe and Pandora in the US, can generate new meaningful forms of revenue. Spotify has more than 500,000 paying customers to its £9.99 a month all-you-can-listen-to-service, but that £60m a year business is still modest when set against a business that still generate $17billion for record companies worldwide in 2009.
Nokia's Comes with Music ,aimed at its mobile phone customers, have flopped- so the creation of a mass music subscription market is not yet assured.
It is the more indie acts that have to be particularly astute to navigate the faltering commercial system. For example : Arcade Fire , invested their own money into their early records and videos, with the result that the band was in a stronger bargaining position when major labels became interested in them.
Established names wonder at the values of the new musical economy. Billy Bragg said ' I've recently recorded half a dozen new songs- and I gave them away on my website. Meanwhile, I've got six different types of T-shirt that I sell for £20 a time when you add in postage. I have to wonder sometimes what business i'm in."
The bands manager' Chris Hufford' described the new strategy as a ' logical progression' from the honesty box approach, but the band's decision shows that they believe there is an ideal minimum price point for their work. Radiohead would release a physical release of the album- with a special edition CD, two 10-inch vinyl discs and a host of artwork going alongside the CD, for a price of £33.
Music subscription services such as Spotify in Europe and Pandora in the US, can generate new meaningful forms of revenue. Spotify has more than 500,000 paying customers to its £9.99 a month all-you-can-listen-to-service, but that £60m a year business is still modest when set against a business that still generate $17billion for record companies worldwide in 2009.
Nokia's Comes with Music ,aimed at its mobile phone customers, have flopped- so the creation of a mass music subscription market is not yet assured.
It is the more indie acts that have to be particularly astute to navigate the faltering commercial system. For example : Arcade Fire , invested their own money into their early records and videos, with the result that the band was in a stronger bargaining position when major labels became interested in them.
Established names wonder at the values of the new musical economy. Billy Bragg said ' I've recently recorded half a dozen new songs- and I gave them away on my website. Meanwhile, I've got six different types of T-shirt that I sell for £20 a time when you add in postage. I have to wonder sometimes what business i'm in."
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