Economics ON THE Music Industry Economics Essay

The Industry has reacted very terribly to the intake of CD sales. Many people blame the decrease of Compact disk sales on illegitimate file posting and downloads but also to be considered is just how that CD's have been distributed and marketed during the last few years. Some of the reasons could include 'non competitive pricing of CD's, reduced variety of shops stocking them and some of the major labels unwillingness to test out other form of entertainment industry such as video games and DVD's which maintain a considerable pressure on the industry. ' The competition from other media like the gaming industry has also affected Disc sales. EA (Electric Arts) 'is incorporating music and theatre experiences in to the game titles themselves'.

Piracy through Compact disc burning has influenced the sales badly unlike other business like the software and gaming industry which is permanently updating itself. The Compact disk has been around for over 20 years now and the music industry is not so fast to keep reinventing itself and has dropped behind in the technology competition.

Whilst Physical sales are slipping there has been a rise of solution sales at concerts and festivals and revenues have become. In '09 2009 a report premiered by the Undertaking Rights Society showing the 'retail value of registered music fell 6% whilst live profits grew 13%. ' David Kusek identifies this as a very important thing for the industry as 'only 4 percent of records ever before sold enough copies to break even. ' The cause the increase of demand for live music could be right down to the '"record industries obsession with marketing and huge profit margins and has little by little become detached from its designers and consumers". Where as generally live music promoters and agents have always "been closer to the designers and their audiences"'

The marriage between designer, consumer and label is changing scheduled to technology and the internet which has affected how music can be sent out. The relationship between your designer and label can be difficult. Music brands sometimes edit the artwork or the name of a song, much to the disappointment of the artist. 'The performers have considered the Internet and the role of product labels is becoming more and more diminished, as designers are able to freely distribute their own materials through file showing, web radio, and other peer to peer services, for little if any cost. ' Bigger artists have finished their deals. 'Radiohead's' problems with their label in 2007 ended with them releasing their album on their own and subsequently released as a "pay what you would like" sales model as a web download. '

The relationship in addition has changed between painters and consumers. Through the internet fans are actually a lot closer to the favourite performers. For instance, Tom Delonge, an North american Rock musician created an online site called 'Modlife. com' which allows uses to hook up to 'rings, designers and personalities using live training video broadcasts, texting, video websites, mobile updating and twitter feeds. '

The digital transformation has had a huge impact in the manner artist merchandise comes. The internet is now able to be use to sell merchandise directly promoted towards the admirers. Prior to the internet, merchandising was reselling hats and tops to an extended queue of fans at a location, however now products are directly related to current styles and culture.

For example Grindstore. com specifically directs is goods towards supporters of rock and roll music and state governments it is 'able to own most comprehensive range of male and female music items from all around the world' Grindstore features clothing from bands such as Greenday, Metalica, Slipknot and Motorhead all in a single place. Other similar companies like the North american based 'Hottopic. com' are a multi million dollars company showing income over 'twelve a few months closing July 31, 2009 was $768, 200, 000, a 4. 52% increase from the prior yr. ' This just demonstrates the power of music merchandising and direct marketing utilising the web.

For the music industry it is a difficult activity safeguarding existing resources of income and finding ways of developing new means of income. One treatment for safeguarding the future of music industry's income is by way of a change in the manner which music is licensed. The best way might be through a tiny fee which allows users to readily download all music. This may be through a taxes which is payable on media products such as mp3 players, Ipods etc or via a blanket licence similar compared to that of the United kingdom Broadcasting Assistance which is incurred to all UK homes, companies and organisations using any type of equipment that can acquire and play music. These prospects could be created by the record companies or part authorities intervention. I think this will be among the finest ways to make a source of income as it is now ever more harder to police force the web for unlawful downloads.

Another possibility in creating a new income source is to become more precise where the PRS collects royalties through the developments of the internet by building a framework. Currently royalties accumulated from restaurants for example rely upon individual estimations and averages no consideration is perfect for the variety of music played in various types of locations. The use of digital technology may help this to become more accurate.

To conclude, I've discussed the way the UK music industry has reacted to current changes in use and distribution with specific research to the way the industry has reacted badly to the decline in Compact disk sales however the consumption of live music has increased. I've shown how direct marketing and merchandising by companies like grindstore. com is creating big gains for the music industry by using the internet. From the changing romantic relationships between artist, label and consumer I've shown how music syndication is changing and exactly how credited websites such as modlife. com enthusiasts are ever closer to their painters.

Finally I have demonstrated ways that the music industry can protect their revenues like a blanket licence or by creating new ways in which royalties are collected.

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