Research - The Music Industry Today

The music industry has changed drastically in the last ten years. In last Friday's lesson, we looked at the way in which music was made, distributed and exchanged, and how this differs today. We discussed this in our group and we established several key differences, which you can see in the presentation below...

The Music Industry on Prezi

Furthermore, we talked about the importance of music videos in 2011, in relation to the music industry and the fans (I briefly touched on this topic in my first blog post).  First of all, over the years the music market has become dominated by 'The Big Four' – Sony, Universal, EMI and Warner Music, due to corporate takeovers. All four of these labels are part of international companies called conglomerates, which do not concentrate solely on music, but many aspects of multimedia including film, technology, etc. However, in 2010, music sales plummeted by nearly 10% in the US and 7% in the UK. Pre-Christmas sales also dropped by 14% and 10% for Warner Music and Sony respectively. Roughly three quarters of all music that is downloaded in the UK is done so illegally, with an estimated 1.2 billion illegal downloads last year.

Because of all this, it is no surprise that music videos do not have the same impact on record sales compared to previous years. An example is the majorly successful single Someone Like You by Adele, which, until today, did not have a music video. Yet her live performance of the song at the 2011 Brit Awards propelled her into worldwide critical acclaim, with the video of it garnering nearly 50 million views on one YouTube video alone. This is interesting as it proves that music videos aren't always vital for a single to be successful, although, in this case, the video of her live performance acted as an alternative to the traditional music video.

Example of video sharing via Facebook

Audiences are being targeted by music videos more and more through digital media, such as social networking and streaming sites. With this technology becoming prominent in the way consumers are exposed to music, major labels are trying to adapt to it. For example, two of the major labels, Universal and Sony, launched the Vevo service, which is now integrated with YouTube, and makes money through advertising.

Chief executive of Vevo, Rio Caraeff, expresses the plans he has beyond the online service of the venture from this article from The Guardian:

"We want to expand distribution into TV partnerships, radio partnerships and live events ... The idea is to put the highest quality video experience in front of people... we want Vevo everywhere the customer is."

With the dire state of the record industry, partnerships between different companies like these are becoming more common. For example, social networking giant Facebook only just recently launched an integration with legal music streaming service Spotify, allowing users to instantly share the music they are listening to in a bid to expand their revenue. Streaming services similar to Spotify have cropped up in the past (e.g. Nokia's Comes With Music, Sky's Songs, etc.) but none were successful.

In our group, we looked at how and where we watch music videos, as we are all major consumers. We identified the fact that YouTube is the main medium we use to access videos, which differs to when music TV channels were the only source for music videos. We also identified specific videos we've all seen recently, e.g. Single Ladies by Beyoncé and Friday by Rebecca Black, which both went 'viral' (for completely different reasons, mind you). What this means is that the videos became popular through a lot of people sharing them online. We concluded that Lady Gaga is also a major player in this field, with her videos being some of the most successful of the past few years. In one lesson, we viewed her video for Telephone featuring Beyoncé. What made this video so big is a clever combination of extended narrative and controversial imagery

Record companies and musicians benefit from our watching their videos by their earning ad revenue and providing us with a form of entertainment in order to get us to view the video again and again, ultimately leading us to buy the music (or so they hope). Another interesting way in which they make money that seems to have blown up over the past few years is the use of product placement in music videos (the Telephone video uses this a lot). Companies pay to have their products shown in videos, in hopes of enticing the viewers into wanting said product after seeing the musician using it or such.

Because people generally do not purchase music videos (the iTunes Store does have this option, mostly for iPod users to be able to watch videos on the go), the labels/musicians end up making a loss when creating music videos. The methods outlined above are some of the ways in which they try to recuperate revenue, although the main purpose will always be to sell the song and artist.