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· Big labels vs Soundcloud/YouTube/TikTok musicians;
· Concerts, music festivals vs live-streaming concerts, virtual performances;

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Do we have to answer all of these questions in our group project? 

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Do we have to answer all of these questions in our group project? 

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For Q1&Q2, I assume that digital technologies have provided many opportunities for small enterprises to get resources and promote their creative works online. However, the lockdown make it a hard time for both large and small companies.

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- "The recent events of the COVID-19 pandemic have demonstrated that the creative industries adopted new business models to operate during this crisis. For example, some museums started to offer online exhibitions, while musicians delivered concerts via online streams or recorded their performances (Agostino et al., 2020; Gu, Domer, & O’Connor, 2020), changing the customers’ experience, demand and consumption" pg1195
- "The literature has also demonstrated that the majority of small businesses, freelancers, and self-employed in the creative industries struggled to adapt to new changes and be resilient (UNESCO, 2021; Florida & Seman, 2020)." pg1195
- limitation on collecting data, because a lot of the creative companies etc. work project to project and are freelance.
- "The cancellation of cultural events, exhibitions, concerts, performances and festivals, along with the restrictions on social distancing and limited economic activity in many countries, have negatively affected cultural workers, freelancers, the self-employed and other stakeholders in the creative sector (Joffe, 2020; Ratten, 2020a, 2020b, 2020c; Pacella et al., 2020)." pg1198
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identify a specific problem or problems

any promising / emergent developments to build on? ‘new normal’.

suggest possible solutions -A focused and incremental approach will work best

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UK National Accounts, The Blue Book: 2021

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UK National Accounts, The Blue Book: 2021

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UK National Accounts, The Blue Book - Office for National Statistics

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National accounts statistics including national and sector accounts, industrial analyses and environmental accounts.

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In just a few months' time, the COVID-19 crisis has brought about years of change in the way companies in all sectors and regions do business. According to a new McKinsey Global Survey of executives, their companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years. And the share of digital or digitally enabled products in their portfolios has accelerated by a shocking seven years. Nearly all respondents say that their companies have stood up at least temporary solutions to meet many of the new demands on them, and much more quickly than they had thought possible before the crisis. What's more, respondents expect most of these changes to be long lasting and are already making the kinds of investments that all but ensure they will stick. In fact, when we asked executives about the impact of the crisis on a range of measures, they say that funding for digital initiatives has increased more than anything else-more than increases in costs, the number of people in technology roles, and the number of customers.

To stay competitive in this new business and economic environment requires new strategies and practices. Our findings suggest that executives are taking note: most respondents recognize technology's strategic importance as a critical component of the business, not just a source of cost efficiencies. Respondents from the companies that have executed successful responses to the crisis report a range of technology capabilities that others don't-most notably, filling gaps for technology talent during the crisis, the use of more advanced technologies, and speed in experimenting and innovating.

Digital adoption has taken a quantum leap at both the organizational and industry levels

During the pandemic, consumers have moved dramatically toward online channels, and companies and industries have responded in turn. The survey results confirm the rapid shift toward interacting with customers through digital channels. They also show that rates of adoption are years ahead of where they were when previous surveys were conducted-and even more in developed Asia than in other regions (Exhibit 1). Respondents are three times likelier now than before the crisis to say that at least 80 percent of their customer interactions are digital in nature.

Perhaps more surprising is the speedup in creating digital or digitally enhanced offerings. Across regions, the results suggest a seven-year increase, on average, in the rate at which companies are developing these products and services. Once again, the leap is even greater-ten years-in developed Asia (Exhibit 2). Respondents also report a similar mix of types of digital products in their portfolios before and during the pandemic. This finding suggests that during the crisis, companies have probably refocused their offerings rather than made huge leaps in product development in the span of a few months.

Across sectors, the results suggest that rates for developing digital products during the pandemic differ. Given the time frames for making manufacturing changes, the differences, not surprisingly, are more apparent between sectors with and without physical products than between B2B and B2C companies. Respondents in consumer packaged goods (CPG) and automotive and assembly, for example, report relatively low levels of change in their digital-product portfolios. By contrast, the reported increases are much more significant in healthcare and pharma, financial services, and professional services, where executives report a jump nearly twice as large as those reported in CPG companies.

The customer-facing elements of organizational operating models are not the only ones that have been affected. Respondents report similar accelerations in the digitization of their core internal operations (such as back-office, production, and R&D processes) and of interactions in their supply chains. Unlike customer-facing changes, the rate of adoption is consistent across regions.

Yet the speed with which respondents say their companies have responded to a range of COVID-19-related changes is, remarkably, even greater than their digitization across the business (Exhibit 3). We asked about 12 potential changes in respondents' organizations and industries. For those that respondents have seen, we asked how long it took to execute them and how long that would have taken before the crisis. For many of these changes, respondents say, their companies acted 20 to 25 times faster than expected. In the case of remote working, respondents actually say their companies moved 40 times more quickly than they thought possible before the pandemic. Before then, respondents say it would have taken more than a year to implement the level of remote working that took place during the crisis. In actuality, it took an average of 11 days to implement a workable solution, and nearly all of the companies have stood up workable solutions within a few months.

When respondents were asked why their organizations didn't implement these changes before the crisis, just over half say that they weren't a top business priority. The crisis removed this barrier: only 14 percent of all respondents say a lack of leadership alignment hindered the actual implementation of these changes. Respondents at both B2B and consumer-facing companies most often cite a failure to prioritize as a barrier, but the responses to other challenges differ. Nearly one-third of B2B respondents say that fear of customer resistance to changes was a barrier, but only 24 percent of those in consumer-facing industries say this. After these two challenges, B2B executives most often cite organizational and technology issues: the required changes represented too big a shock to established ways of working, IT infrastructure was insufficient, or organizational silos impeded commitment to and execution of the required changes.

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The largest changes are also the most likely to stick in the long term

Of the 12 changes the survey asked about, respondents across sectors and geographies are most likely to report a significant increase in remote working, changing customer needs (a switch to offerings that reflect new health and hygiene sensitivities), and customer preferences for remote interactions (Exhibit 4). Respondents reporting significant changes in these areas and increasing migration to the cloud are more than twice as likely to believe that these shifts will remain after the crisis than to expect a return to precrisis norms.

Respondents report that the crisis spurred shifts in their supply chains as well. The nature of these shifts varies significantly by sector, and they have taken place less quickly than other changes because of contracts that were already in place before the pandemic. Respondents in consumer-facing industries, such as CPG and retailing, often cite disruptions to last-mile delivery (that is, who interfaces directly with customers). Other shifts, such as building redundancy in the supply chain, are reported more often in sectors that create physical products.

The results also suggest that companies are making these crisis-related changes with the long term in mind. For most, the need to work and interact with customers remotely required investments in data security and an accelerated migration to the cloud. Now that the investments have been made, these companies have permanently removed some of the precrisis bottlenecks to virtual interactions. Majorities of respondents expect that such technology-related changes, along with remote work and customer interactions, will continue in the future. Nearly one-quarter of respondents also report a decrease in their physical footprints. This signifies a longer-term shift than would likely occur among the 21 percent reporting a drop in their number of full-time equivalents-at some companies, that could represent a temporary move in the earlier days of the crisis. What's more, when we asked about the effects of the crisis on a range of company measures (including head counts), respondents say that funding of digital initiatives has increased more than anything else-more than costs, the number of people in digital or other technology roles, and the number of customers.

We also looked at the underlying reasons some changes would or would not stick: their cost-effectiveness, ability to meet customers' needs, and advantages for the business. In addition, we examined the relationship between the length of the crisis and the permanence of the changes as "new" becomes "normal" over time.

Of the 12 changes, remote working and cloud migration are the two that respondents say have been more cost effective than precrisis norms and practices. Remote working is much less likely to meet customer expectations better than it did before the crisis; the changes that have done so best are, unsurprisingly, responses to the increasing demand for online interactions and to changing customer needs. Investments in data security and artificial intelligence are the changes respondents most often identify as helping to position organizations better than they were before the crisis. Across these changes, remote working is the likeliest to remain the longer the crisis lasts, according to 70 percent of the respondents.

Technology-driven strategy for the win

We've written before about the need for digital strategies to be true corporate strategies that take digital into account. And from earlier research, we know that at leading companies, digital and corporate strategies are one and the same. The COVID-19 crisis has made this imperative more urgent than ever. While the alignment on overall strategy and strong leadership have long been markers of success during disruptions or transformations, the extent of technology's differentiating role in this crisis is stark (Exhibit 5). At the organizations that experimented with new digital technologies during the crisis, and among those that invested more capital expenditures in digital technology than their peers did, executives are twice as likely to report outsize revenue growth than executives at other companies.

The results also indicate that along with the multiyear acceleration of digital, the crisis has brought about a sea change in executive mindsets on the role of technology in business. In our 2017 survey, nearly half of executives ranked cost savings as one of the most important priorities for their digital strategies. Now, only 10 percent view technology in the same way; in fact, more than half say they are investing in technology for competitive advantage or refocusing their entire business around digital technologies (Exhibit 6).

This mindset shift is most common among executives whose organizations were losing revenue before the crisis began (Exhibit 7). Those reporting the biggest revenue hits in recent years acknowledge that they were behind their peers in their use of digital technologies-40 percent say so, compared with 24 percent at companies with the biggest revenue increases-and also say that, during the crisis, they have made much more significant changes to their strategies than other executives report.

What's more, respondents say that technology capabilities stand out as key factors of success during the crisis. Among the biggest differences between the successful companies and all others is talent, the use of cutting-edge technologies, and a range of other capabilities (Exhibit 8). A related imperative for success is having a culture that encourages experimentation and acting early. Nearly half of respondents at successful companies say they were first to market with innovations during the crisis and that they were the first companies in their industries to experiment with new digital technologies. They are also more likely than others to report speeding up the time it takes for leaders to receive critical business information and reallocating resources to fund new initiatives. Both are key aspects of a culture of experimentation.

The notion of a tipping point for technology adoption or digital disruption isn't new, but the survey data suggest that the COVID-19 crisis is a tipping point of historic proportions-and that more changes will be required as the economic and human situation evolves. The results also show that some significant lessons can be drawn from the steps organizations have already taken. One is the importance of learning, both tactically, in the process of making specific changes to businesses (which technologies to execute, and how), and organizationally (how to manage change at a pace that far exceeds that of prior experiences). Both types of learning will be critical going forward, since the pace of change is not likely to slow down.

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How COVID-19 has pushed companies over the technology tipping point--and transformed business forever

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In just a few months' time, the COVID-19 crisis has brought about years of change in the way companies in all sectors and regions do business. According to a new McKinsey Global Survey of executives, their companies have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years.

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Questions for Vish

1)      In answering how the relationships between large and small enterprises have changed, is this meaning more generally or should we look at this from the perspective of one enterprise or sector?

Structure of presentation:

1) first five minutes: more general approach to how the relationships between large and small enterprises have changed in the last ten years. If we were to focus on music: twenty years ago the focus was on labels, live shows and buying CDs or records. Then when TV became popular this was a way for musicians to publicise and perform. Then with iPod music became more easily accessible and portable, then iTunes meant you could have a wide range of songs rather than having to download. Spotify and iPhone - can upload music and make it available to listeners without having a record deal. Soundcloud is for smaller artists. YouTube also used to develop and advertise products (music videos).

-          Think about how this relationship has changed in the last two years. In other words: lockdown
In terms of music: live concerts were stopped. In Asia, there are paid online concerts - a way to use technology to make concerts live. Travis Scott used to do concerts in video games (Fortnite). TikTok was also used in lockdown for music and songs would go 'viral on TikTok', and great for music promotion and marketing. Lockdown made it hard for musicians to meet and for big labels to record music in a studio. However, small artists have more time and technology made it easier for small artists to use online programs to make music.
was more of less music listened to in lockdown?

What are the challenges and opportunities of this change?
- TikTok gave people a virtual way to interact with the music. Acts like a promotion
- independent bands might not have the opportunity to tour or perform because of COVID. Not popular enough for the audience to go and see their virtual concert.
- Lockdown changed live music shows and some music production more than it changed how music is listened to. This came before lockdown with the introduction of technology.

What is our argument?
- Maybe: less change in the relationship between large and small enterprises in the last few years from lockdown than with the introduction of technology. This introduction of technology insulated the music industry from more severe effects of lockdown.
- Fewer platforms to listen to music. Either Spotify or Apple Music. Oligopoly/ monopoly market
- Are we thinking from the perspective of the artist or the producer? How technology/lockdown affected different groups differently
- looking at the graph about revenue: there is a clear upward trajectory. To this end, it is not clear whether there is a natural upward growth in revenue that would've happened anyway without lockdown. however， there seems to be a particularly large increase between 2020-2021 that could be a result of more people streaming music in lockdown. Either way, it shows that lockdown didn't affect the revenue received from music negatively. also shows that more music is being streamed and less money is made from CD's - perhaps bad for artists, and therefore less money to artists that goes towards new music production.

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The RIAA provides the most comprehensive data on U.S. recorded music revenues and shipments dating all the way back to 1973. This is the definitive source of revenue data for the recorded music industry in the United States.

For more in-depth analysis of 2021 data and trends, please see our " 2021 RIAA Shipment & Revenue Statistics." We provide these figures to educate and inform industry discussions, and permission to cite or copy the data is granted as long as proper attribution is given to the Recording Industry Association of America. For further questions, please contact the main RIAA line at 202-775-0101 and ask for Matt Bass to help get you the information you need.

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For more in-depth analysis of 2021 data and trends, please see our " 2021 RIAA Shipment & Revenue Statistics." We provide these figures to educate and inform industry discussions, and permission to cite or copy the data is granted as long as proper attribution is given to the Recording Industry Association of America.

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The Evolution Of The Music Industry — And What It Means For Marketing Yourself As A Musician

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The Evolution Of The Music Industry — And What It Means For Marketing Yourself As A Musician

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Founder and EIC of Now Entertainment, Personal Branding/Public Relations Expert. How has the music industry evolved?
For many fans of music, the saying, "We are not in Kansas anymore," rings truer than ever before. While it is evident that the content of the audio version of the entertainment industry has changed, there is a lot more that is different about what we now listen to and enjoy. Fans might be adjusting their tastes and preferences to the new sounds on the airwaves, but on the other side, artists are also facing a drastic shock. The tides of music production and marketing are moving fast, and only those strong enough to ride along will be left standing.

My business started as a recording studio and later grew into a full-service media company. Through this experience, I've seen how the music industry has evolved, as well as learned a few best practices on how independent musicians can adapt.

Through the past 30 years, the way music is made and distributed has varied dramatically. The rise of the internet from the late 1990s has played a crucial role in how music is consumed globally, setting up a butterfly effect that inadvertently affects how musicians and artists are compensated and paid.

For a long time, the music industry has relied predominantly on traditional record labels. Both creators and consumers were completely at the mercy of the labels, and music preferences were heavily influenced by whatever happened to be in circulation. The label was the be-all and end-all of the artist's career, deciding everything from marketing budgets to video sets and tour dates. I've seen some argue that the artistic expression of a true musician is heavily censored by what record labels consider to be marketable.

As the early 2000s set in, the power dynamics started to shift. Mobile phones became more popular, and music streaming sites started to mean business. Consumers now had access that physical record stores no longer defined. The supply pool got bigger, putting the listener in charge of what was hot or not, but the relationship was still tilted. From my perspective, the musician was still away from the pulse, and interactions with fans were primarily happening at meet-and-greets and tour venues.

As the 2010s rolled in, social media was booming and, suddenly, the floodgates were opened. A whole world of possibility was evident to both creators and listeners. The fourth wall had been brought down, and there was no room for the voice behind the music to speak directly. Social media introduced a level of music promotion that I believe had been unprecedented in earlier years. More and more platforms were vying for people's attention, so they introduced unlimited features to keep audiences entertained.
What does this mean for independent artists?
Now, I'm finding that traditional entertainment providers recognize a new market opportunity: streaming on-demand. Music is one of the most popular bite-sized forms of entertainment that exists in limitless genres, with the ability to hold attention for hours. Streaming on-demand may be the champion of indie artists, as it can help eliminate the bottlenecks of traditional record labels. But despite the broader opportunity for discovery streaming platforms can give music creators, gaps still exist and there is still a limited avenue for adequate compensation for the artist.

Another aspect that has greatly evolved is music distribution. Music distribution is a process where a music distribution firm signs a deal with a record label or artist, giving them the right to sell their music to various channels. Hence, a music distributor can only sell music to channels that have an account with said distributor. During the first decade of the new millennium, I found the use of digital distribution systems became more profound. Gone were the days when independent creators had to collaborate with or need the support of other agencies to share their music with the globe.

My company also assists musicians with services such as public relations and distribution, and independent musicians often ask me for ways to help get their music to a large audience. I always tell them the same thing: "Link up with music distribution channels." Plainly speaking, if you are an independent artist and you want to get your music on streaming platforms around the globe, you need to get familiar with the various distribution platforms in use today. Examples of these include Music Gateway, AWAL, Horus Music and Songflowr.

Another great way to distribute your music is through conventional channels like YouTube and Amazon. You can earn revenue as an independent artist through YouTube. All you need to do is join its partner program and use ads to generate revenue. YouTube does this by matching ads with your channel and the fans who watch your videos.

After you release your music, you can also run ads on social media and hire influencers to promote your music. Ensure you know how to properly target your audience, however, or else you could waste a lot of money and see no return on investment. Some musicians might even opt to work with a public relations agent and service DJs before they release their music. Just keep in mind that, in my experience, outsourcing PR can cost you around $3,000 to $5,000, and DJ record pools can range from $200 to $2,000.

As we can see, music has evolved mainly because of technological advances and improvements in how things were done before. These advances have also brought in new opportunities for artists and entrepreneurs alike. In the coming years, I believe progress in the music industry will be largely dependent on these same factors.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

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Council Post: The Evolution Of The Music Industry - And What It Means For Marketing Yourself As A Musician

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Founder and EIC of Now Entertainment , Personal Branding/Public Relations Expert. How has the music industry evolved? For many fans of music, the saying, "We are not in Kansas anymore," rings truer than ever before.

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What do you think is a better solution to consider music distributor or music label as the distributor could be one of the big tech.

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What do you think is a better solution to consider music distributor or music label as the distributor could be one of the big tech.

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What are the challenges and opportunities of this change?- TikTok gave people a virtual way to interact with the music. Acts like a promotion- independent bands might not have the opportunity to tour or perform because of COVID. Not popular enough for the audience to go and see their virtual concert. - Lockdown changed live music shows and some music production more than it changed how music is listened to. This came before lockdown with the introduction of technology. 

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What are the challenges and opportunities of this change?- TikTok gave people a virtual way to interact with the music. Acts like a promotion- independent bands might not have the opportunity to tour or perform because of COVID. Not popular enough for the audience to go and see their virtual concert. - Lockdown changed live music shows and some music production more than it changed how music is listened to. This came before lockdown with the introduction of technology. 

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Is independent band a small enterprise?

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Notes from Meeting with Vish
- Define where in the music industry we are focusing. Perhaps focus on one label in particular and what happened to them
- Consider the differences in different countries
- Pick things that are comparable e.g. Sony or Universal
- The big tech is the distribution channels and wat is that doing to small firms/ music producers
- How has a small label changed in their relationship with Spotify since the Pandemic? Map the change before, during and after Covid
- Growth of Spotify over the pandemic - did they get more power? Did music producers have tours cancelled because of Covid? How did this effect their business model?
- Benefits and challenges of Covid. Need to read opinion pieces on how Spotify is exerting pressure on independents
- No more than 12 slides for a 15 minute presentation. Introduction slide and final slide at the end with references. Don't all have to speak - can nominate three people etc. Other people could do the Q&A, or research etc.
- First slide: this is what we're talking about and doing. Talk about them, then conclude that you have done that.
- Thread throughout the presentation connecting things.

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Spotify Adds Subscribers, Lowers Revenue Guidance Amid Ad PullbackCoronavirus pandemic has dented ad sales, seen users listen more at home

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Spotify Adds Subscribers, Lowers Revenue Guidance Amid Ad PullbackCoronavirus pandemic has dented ad sales, seen users listen more at home

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Spotify Technology SA continued to add paying and advertising-supported users in the most recent quarter, but it lowered its revenue guidance for the year as ad sales were dented amid uncertainty around the coronavirus pandemic.

The global health crisis began to affect the business in late February, the company said, with a notable decline in daily active users and consumption in hard-hit markets such as Italy and Spain. Listening has started to rebound in recent weeks, with consumption in many markets "meaningfully recovered."

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Spotify Adds Subscribers, Lowers Revenue Guidance Amid Ad Pullback

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Spotify Technology SA continued to add paying and advertising-supported users in the most recent quarter, but it lowered its revenue guidance for the year as ad sales were dented amid uncertainty around the coronavirus pandemic.

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As YouTube Traffic Soars, YouTubers Say Pay Is PlummetingAdvertising rates on the platform have dropped significantly during the coronavirus pandemic

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As YouTube Traffic Soars, YouTubers Say Pay Is PlummetingAdvertising rates on the platform have dropped significantly during the coronavirus pandemic

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As YouTube Traffic Soars, YouTubers Say Pay Is Plummeting

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As YouTube Traffic Soars, YouTubers Say Pay Is Plummeting. Advertising rates on the platform have dropped significantly during the coronavirus pandemic.

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This is how COVID-19 is affecting the music industry

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This is how COVID-19 is affecting the music industry

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https://www.complex.com/pigeons-and-planes/2017/07/independent-record-labels-you-should-know/

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Publishing a feature like this is almost like setting ourselves up to get yelled at on the internet. Yes, we probably didn't include one of your favorite indie labels, so let's be clear from the start-this list is absolutely not definitive, it's simply a snapshot of 33 labels that are doing awesome things. As always, we encourage you to do your own digging and share your own favorites with us, but as long as you discovered just one new label, artist, or piece of music that you love from this list, then we did our job.

So, from independent icons like XL Recordings and Warp to niche labels like Dream Catalogue and rising stars like Good Years and WEDIDIT, here are some of our favorite independent labels.

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33 Independent Record Labels You Should Know

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Publishing a feature like this is almost like setting ourselves up to get yelled at on the internet. Yes, we probably didn't include one of your favorite indie labels, so let's be clear from the start-this list is absolutely not definitive, it's simply a snapshot of 33 labels that are doing awesome things.

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SONY, UNIVERSAL,WARNER,EMI

Big Four: Sony Music Entertainment, EMI, Universal Music Group, and Warner Music Group. The Big Four control over 85 percent of the U.S. recording music industry (Copynot)

https://open.lib.umn.edu/mediaandculture/chapter/6-4-current-popular-trends-in-the-music-industry/

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Learning Objectives

1. Assess the influence of the major record labels in the music industry.

2. Describe the role played by independent labels in the music industry.

In Weezer's 2008 song "Pork and Beans," vocalist Rivers Cuomo sings, "Timbaland knows the way to reach the top of the charts/Maybe if I work with him I can perfect the art (AOL Music Sessions)." The lyrics, a reference to hip-hop producer Timbaland's multiple high-profile collaborations, are an angry reaction to a meeting between Cuomo and record executives at the band's Geffen label. During the meeting, the executives told the band members they needed to write more commercial material, prompting a defiant (though commercially successful) response (Reesman, 2008). The incident is a reflection of the balance between commercial success and artistic expression in the music industry. Record labels need artists that inspire the record-buying public, while artists need the financial backing and expertise of record labels and their marketing teams. In recent years, tensions between artists and their labels have been heightened by the cost-cutting measures that have taken place at many companies due to the impact of online file sharing on profits.

The Influence of Major Record Labels

During the 1990s, the record industry was booming. Music lovers were busy replacing their cassette tapes and vinyl records with CDs, and sales were high. In 1999, the total revenue from music sales and licensing peaked at $14.6 billion (Goldman, 2010). Ten years later, record label executives were not as successful. Revenue had plunged to $6.3 billion, with the Recording Industry Association of America (RIAA) reporting declining revenue in nine of the 10 previous years, with album sales dropping an average of 8 percent every year (Goldman, 2010). Why the drastic decline? Experts agree that the primary culprit is the growing popularity of digital music, which initially began through peer-to-peer file sharing -the process of swapping media files over the Internet-such as the Napster service.

Despite a massive loss in profits over the past decade, the global music business still comprises a powerful -a market condition in which a few firms dominate most of an industry's production and distribution. The global reach of these few companies means that they have the promotion and marketing muscle to determine which types of music reach listeners' ears and which become obsolete. Each of the major record labels has a strong infrastructure that oversees every aspect of the music business, from production, manufacture, and distribution to marketing and promotion.

Between 1950 and 1980, a large number of major record labels and numerous independent labels competed for a share of the musical pie. Gradually, the larger labels began buying up the independent labels, and then started trying to purchase each other. By the late 1990s, only six major labels remained: Warner, Universal, Sony, BMG, EMI, and Polygram. In 1998, Universal acquired Polygram, and 6 years later Sony and BMG merged. Sony later bought out BMG to obtain sole ownership of the company. Currently, the music industry is dominated by the so-called : Sony Music Entertainment, EMI, Universal Music Group, and Warner Music Group. The Big Four control over 85 percent of the U.S. recording music industry (Copynot). Figure 6.11 shows a graph of the current distribution of market share.

Sony Music Entertainment

In 2004, Japanese-owned Sony Music Entertainment (part of Sony) and German-owned BMG Entertainment (part of Bertelsmann) merged to create Sony BMG. The joint venture was a bid to overcome weak retail sales, online file sharing, and fierce competition from rival forms of media (Reuters, 2003). Independent music companies opposed the merger in Europe, arguing that it created a market imbalance, but the European Commission upheld its decision to allow the consolidation. In 2008, Sony bought out BMG's 50 percent stake for $1.2 billion (Kaplan). The company now has full ownership of the second-largest record label in the world. Subsidiary labels owned by Sony include Arista, Columbia, Epic, Jive, RCA, and Zomba, and the company represents numerous artists, including Alicia Keys, Ke$ha, and Sade.

EMI Group

The EMI Group is a British company, most famous for introducing the Beatles to the world through its Parlaphone subsidiary. Originally formed in 1931, through a merger of the UK Columbia Gramophone Company and the Gramophone Company, the money-losing company was taken over in 2007 by private equity firm Terra Firma Capital Partners Ltd. for $6.5 billion (Chassany, 2009). In an attempt to return the company to profit following the deal, Terra Firma head Guy Hands began slashing costs, eliminating more than 1,000 jobs in the process (Finch, et. al., 2008). Following the takeover, several high-profile artists quit the label, including Radiohead, who described the new management structure as "a confused bull in a china shop (Chassany, 2009)." As of 2010, the struggling company, which represents artists such as Coldplay, Lily Allen, and Pink Floyd, faces being taken over by its bankers after failing to secure a deal to sell its North American distribution rights to one of the other major labels (Dailynews, 2010).

Warner Music Group

Originally launched as Warner Bros. Records in 1958, the Warner Music Group gained momentum during the 1960s and 1970s with the purchase of several important new labels, including Elektra and Atlantic. Like the other major labels, the company began to suffer from declining sales due to the advent of free online music swapping. In 2004, Time Warner decided to abandon its record label and offloaded its music division to an investor group so that it could focus on more profitable areas, such as Time Warner Cable. The $2.6 billion deal included more than 800 artists, including Linkin Park, Metallica, and Kid Rock, as well as the group's publishing arm, Warner/Chapell Music, which owned more than a million copyrights (Vise, 2003).

After a brief period of independence, Warner Music Group went public in 2005, making the company the only stand-alone music company to be publically traded in the United States. To prepare for its public offering, the company made around $250 million in cuts through layoffs and consolidation (Leeds, 2005). The move caused concern among the label's artists that investors' interests would take priority over performers' interests and prompted rock-rap group Linkin Park to demand an early release from its contract with Warner. Guitarist Brad Delson characterized the company as "bad news," adding, "We don't want to be around to see what happens (Leeds, 2005)." The band eventually worked out a lucrative new deal with the company. As of 2010, Warner Music Group is considering the possibility of purchasing EMI should the struggling company fail to meet its debt repayments (Sibun, 2010).

Universal Music Group

The largest of the Big Four record labels, Universal Music Group established itself as an industry giant in 1998, with the merger of PolyGram and Universal. Both companies already owned numerous subsidiaries, and the merger of the two entertainment conglomerates created the largest music company in the world. Wholly owned by French international media firm Vivendi since 2006, the company has gone on to acquire BMG Music Publishing and Univision Music Group, among smaller labels. Its acquisition of U.K. labels Sanctuary Music Group and V2 in 2007 drew criticisms from the independent sector that the recording giant was heading toward a monopoly (Sherwin, 2007). The Association of Independent Music claimed that the deals would "further marginalize a vibrant independent sector, serving to stifle competition and narrow consumer choice (Sibun, 2010)." Despite the objections, both deals went ahead.

Universal Music Group's catalog of artists includes U2, Amy Winehouse, Lady Gaga, Taylor Swift, and the Black Eyed Peas. Despite its powerful status, the company has suffered from declining sales of physical products along with the rest of the music industry. As of 2010, UMG plans to lure customers back to purchasing physical CDs by lowering prices to under $10 (the average price of a digitally purchased album) (Swindle, 2010).

Independent Record Labels: A Smaller Share of the Pie

In addition to the four major record labels, independent production companies, or indie record labels , operate without the financial assistance of one of the Big Four (although in recent years, the definition has shifted to incorporate indies that are partially owned by one of the major labels). Ranging from small grassroots or garage labels to large, profitable businesses, indie labels typically produce music that is less commercially viable and more eclectic than the music produced by the larger mainstream companies.

Indie Origins

Independent labels have played a small but significant role in the music industry for as long as there has been a market. When patents held on sound recording technologies entered the public market in the 1920s, opportunities arose for small recording companies to enter the business. To avoid competing with larger firms such as RCA and Edison, the new independent companies focused on neglected areas of the music industry, such as folk, gospel, and rural blues. When the major labels decided during World War II to abandon then-unprofitable music recorded by Black artists, the independent labels quickly rushed in to fill the void, enjoying a boom during the rock and roll era when R&B music soared in popularity. Between 1955 and 1959, the U.S. market share of the major companies had dropped from 78 percent to 44 percent, while the market share of independent companies rose from 22 percent to 56 percent (History Of Rock, 2009). Sun Records played a particularly important role in the development of both rock and roll and country music by releasing records by Elvis Presley, Jerry Lee Lewis, Johnny Cash, and Roy Orbison.

During the 1970s punk era, indie labels profited from the antimainstream, anticorporate attitude of many punk rock bands, which disassociated themselves from the major labels. The indie-rock movement grew throughout the 1980s and 1990s, with labels such as Sub Pop, I.R.S., and Epitaph and epitomized by the music of the Smiths, the Stone Roses, R.E.M., and the Jesus and Mary Chain. This movement was known as "college rock," which would later become alternative rock. However, as alternative rock grew in popularity, grunge bands such as Nirvana, Soundgarden, and Pearl Jam broke into the mainstream. This attracted the attention of major record labels, which began to look at the music with a commercially oriented approach. Many artists found themselves faced with a dilemma: stay true to their indie roots or "sell out" to a major record label in the hope of financial gain.

The Pressure to Sell Out: Nirvana

When Seattle grunge band Nirvana began to achieve success in the late 1980s, they were signed to independent label Sub Pop. Popular among college students, the band's 1989 album Bleach sold well enough for the band to consider moving to a bigger label. Amid rumors that Sub Pop was planning on signing as a subsidiary of a major record company because of financial difficulties, the band decided to cut out the middleman and seek a new contract itself (Norris, 2004). Signing with DGC Records (an imprint of Geffen), Nirvana released Nevermind in 1991 and found itself thrust into the mainstream. Within 9 months of its release, the album had sold more than 4 million copies (compared to 30,000 copies of Bleach), knocked Michael Jackson's Dangerous from the top of the Billboard chart, and placed Nirvana at the forefront of public attention.

For Sub Pop, Nirvana's success was both a blessing and a curse. Under severe financial stress, the label had begun layoffs in the spring of 1991, reducing its staff of 25 to a core group of five employees (Sub Pop Records, 2008). With the royalties it received from Nevermind, along with the buyout from Nirvana's contract, and potential royalties from any future albums, Sub Pop was pulled back from the brink of collapse. However, the carefully crafted niche that Sub Pop had found in the music industry vanished. Eager to discover the next big thing in grunge, major labels began scoping out Seattle bands, offering them large advances against which the smaller independent companies could not compete. Sub Pop chief Bruce Pavitt said of one band, "I was told by our head that they would be happy with a $5,000 advance. Two months later we were giving them a check for $150,000 (Sub Pop Records, 2008)." In 1995, the company sold 49 percent of its shares to Warner Bros in exchange for financial backing.

Nirvana had equally ambivalent feelings about the transition from a small independent label to a major record company. At a concert shortly after the band signed their deal with DGC, lead singer Kurt Cobain declared to the crowd, "Hello, we're major-label corporate rock sellouts (Kunkel, 2007)." Having spent several years among the anticommercial, do-it-yourself grunge crowd in Seattle, the band's members were uncomfortable with their new position as wealthy rock stars.

Advantages of Indie Labels

Although they frequently lose their talent to industry heavyweights, indie labels hold several advantages over major record companies. They are generally smaller, enabling them to respond to changing popular musical tastes more quickly than can large companies with more cumbersome processes and procedures in place. This enables them to pick up on emerging trends and bring them to market quickly. Although unable to compete with the distribution and promotion power of the major labels, indie labels can focus on niche markets, tapping into regional trends. For example, hip-hop's initial commercial successes in the late 1970s and early 1980s came through small independent labels such as Tommy Boy and Sugar Hill. Realizing that record executives would find the raw street version of hip-hop unworkable, the labels came up with the idea of using house bands to play with emcees to improve the commercial viability of the genre. An early example of this process was Sugarhill Gang's "Rapper's Delight," which was a worldwide hit (Anderson, 2006).

The nature of the independent production process may also prove advantageous. A shorter path from creation of the music to distribution and promotion makes it easier to maintain the artist's original vision. For this reason, many artists prefer to work with independent labels, believing the final product to be more authentic. This argument is also used by some fans of independent labels, who trust companies that only produce one brand of music to adhere to a consistent sound and musical style.

Vanity Labels

A popular trend among major record labels is to allow high-profile recording artists to front their own indie labels with the financial backing of the larger company. Frequently referred to as vanity labels , these are spin-offs of the parent company that enable artists to run "a label within a label" and release music by other performers that they admire. Examples include Madonna's Maverick, Trent Reznor's Nothing, and Michael Jackson's MJJ. Allowing an artist to create a vanity label benefits a major record label in several ways: It encourages artists to remain with the parent company for longer than they may have otherwise done, it reduces the amount of promotional effort required by the label because fans are likely to be attracted to new music based on the recommendation of favorite artists, and it increases the likelihood that bands in niche genres will become big moneymakers for the company.

However, vanity label projects often prove risky and unsuccessful because the label provides all of the money while the proven artist is responsible for developing new acts, and recent losses in the music industry have caused major labels to cut funding for artist-run ventures. For example, Mariah Carey's label, Crave, ended up dissolving less than a year after it opened. In 2004, Universal Records President Monte Lipman commented, "Back in the day, when the industry was a lot healthier, it was 'OK, here's $2-$3million. Go start your label and let us know when you're ready to start your first act.' Those days are absolutely over (First Coast News, 2004)."

Key Takeaways

The global music business constitutes a powerful oligopoly-a market condition in which a few firms dominate most of an industry's production and distribution. Major record labels make up over 85 percent of the music industry. Currently, the four major record labels (known as the Big Four) are EMI, Sony Music Entertainment, Universal Music Group, and Warner Music Group.

Indie record labels are smaller labels that operate without financial assistance from the Big Four and typically produce less commercially viable music. Although they do not have the marketing and promotional power of the major labels, indies have several advantages. They are smaller and more flexible than major labels, enabling them to respond more quickly to trends in the industry. Indies are also able to tap into niche markets, and their simple structure often means that the music stays closer to the artist's original vision. Major labels often allow high-profile stars to set up their own indie labels, known as vanity labels because they reflect the personal musical tastes of the high-profile artist.

Exercise

Draw a T-chart. Label the left-hand column Major Record Labels and the right-hand column Independent Record Labels. Using the information in this chapter, your own knowledge, and further Internet research, list the advantages held by each type of label in the music industry. Consider the size and structure of each type of company, financial issues, artist preferences, and the impact of digital distribution.

References

Anderson, Rhome. "Hip to Hip-Hop," Washington Post, February 19, 2006, http://www.washingtonpost.com/wp-dyn/content/article/2006/02/16/AR2006021602077.html.

AOL Music Sessions, "Weezer, '(If You're Wondering If I Want You To) I Want You' Sessions," AOL Music Sessions, http://music.aol.com/sessions/weezer-if-youre-wondering-if-i-want-you-to-i-want-you-sessions/.

Chassany, Anne-Sylvaine. "Terra Firma Sues Citi over EMI Takeover," Bloomberg Businessweek, December 18, 2009, http://www.businessweek.com/globalbiz/content/dec2009/gb20091218_584654.htm.

Copynot, "The Big Four Record Companies," Copyright Law, Treaties and Advice, http://www.copynot.org/Pages/The%20big%20four%20Record%20Companies.html.

Dailynews, Associated Press, "Music Group EMI Facing Bank Takeover After Talks Fall Apart," Los Angeles Daily News, April 2, 2010, http://www.dailynews.com/business/ci_14805128.

Finch, Julia, Owen Gibson, and Alex Needham, "Radiohead Quit, Robbie Williams on Strike-and Now 1,000 Jobs Cut," Guardian (London), January 12, 2008, http://www.guardian.co.uk/media/2008/jan/12/robbiewilliams.emi.

First Coast News, Associated Press, "Record Cos. Wary of Vanity Label Deals," Jacksonville (FL) First Coast News, June 28, 2004, http://www.firstcoastnews.com/news/strange/news-article.aspx?storyid=20660.

Goldman, David. "Music's Lost Decade: Sales Cut in Half," CNN, February 3, 2010, http://money.cnn.com/2010/02/02/news/companies/napster_music_industry/index.htm.

History Of Rock, "Rock and Roll Timeline," The History of Rock 'n' Roll, October 15, 2009, http://www.history-of-rock.com/rock_and_roll_timeline.htm.

Kaplan, David. "Sony Buys Bertelsmann's 50 Percent Stake In Sony BMG for $1.2 Billion," PaidContent.org: The Economics of Digital Content, http://paidcontent.org/article/419-sony-buys-back-bertelsmanns-50-percent-stake-in-sony-bmg-company-rename/.

Kunkel, Benjamin. "Stupid and Contagious," New York Times, May 6, 2007, http://www.nytimes.com/2007/05/06/books/review/Kunkel.t.html.

Leeds, Jeff. "A Band Makes Its Case Against Record Label," New York Times, May 9, 2005, http://www.nytimes.com/2005/05/09/arts/music/09linkin.html.

Norris, Chris. "Ghost of Saint Kurt," Spin, April 2004, 57-63.

Reesman, Bryan. "Weezer Goes into the Red on New CD," Mix, September 1, 2008, http://mixonline.com/recording/tracking/music-weezer/.

Reuters, "Sony, BMG Agree on Music Merger," CNN World Business, November 7, 2003, http://edition.cnn.com/2003/BUSINESS/11/06/sony.bmg.reut/.

Sherwin, Adam. "Indies Accuse Universal of Gaining Monopoly" Times (London), October 1, 2007, http://business.timesonline.co.uk/tol/business/industry_sectors/media/article2563208.ece.

Sibun, Jonathan. "KKR and Warner Music Talk Over Break-Up Bid for EMI," Telegraph (London), March 14, 2010, http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7443456/KKR-and-Warner-Music-talk-over-break-up-bid-for-EMI.html.

Sub Pop Records, "About Us," April 2, 2008, http://www.subpop.com/about.

Swindle, Anna. "Universal Music Group Plans to Lower CD Prices," Paste, March 23, 2010, http://www.pastemagazine.com/articles/2010/03/post-69.html.

Vise, David. "Time Warner Sells Music Unit to Bronfman for $2.6B," Washington Post, November 24, 2003, http://www.washingtonpost.com/ac2/wp-dyn/A9806-2003Nov24.

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6.4 Current Popular Trends in the Music Industry

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Assess the influence of the major record labels in the music industry. Describe the role played by independent labels in the music industry. In Weezer's 2008 song "Pork and Beans," vocalist Rivers Cuomo sings, "Timbaland knows the way to reach the top of the charts/Maybe if I work with him I can perfect the art (AOL Music Sessions)."

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Increase: unemployment; music with PRS; streaming revenue; vinyl sales
Decrease:Revenue; physical sales

https://issuu.com/ukmusic/docs/this_is_music_2021

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Read This Is Music 2021 by ukmusic on Issuu and browse thousands of other publications on our platform. Start here!

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https://www.femnoise.com/music-distribution/

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This article will make it easier and more informed for you to choose the music distribution service that can most efficiently help your music reach your audience.
It's not an easy task to choose the most suitable service to distribute our music, mainly because the distribution services offer very similar features and services. However, there are differences that derive from their scope and magnitude, making it an indispensable task to know how to make the right choice in terms of budget and target audience.

At the beginning, in order to choose our music distribution service, we must take into account parameters such as:

Distribution percentage: This is the distribution percentage that distributors will pay you from what you generate from streaming on music platforms such as Spotify, Apple Music, etc. It generally varies between 80% and 100%.

Costs: Each distributor is different. Some distributors charge a monthly or yearly fee for unlimited uploads, and others charge a one-time fee per album/song release.

Benefits: Many distributors offer additional benefits such as Content ID on YouTube, instant Spotify verification, artist promotion, backups, etc. You should take this into account when choosing a distributor as some include it in their plan, and others charge for it as an extra.

In this article we will show you the top 10 best digital music distribution companies out there today and also some key tips on how to choose the right one for your music. We have rigorously analysed the top music distribution services, revealing their scope of services, royalties, add-on services and features.

Here are the best cost-effective music distribution services you can take advantage of:

CDBaby only charges per launch. That is, it does not charge any kind of annual or monthly plan.
This is perfect for those who want to upload albums or EPs from time to time and not have to pay monthly bills. They then distribute 91% of the revenue, so they keep the remaining 9%
How much does CDBaby cost?
To release a standard single costs $9.95 and the Pro version costs $29.95.
To release an album costs $29.99 (standard) and $69 (Pro).
The standard version includes distribution on all platforms, content ID, integration with FB and Instagram stories, instant verification of Spotify and Apple Music, help support.

The benefits of the Pro version are CD or vinyl distribution, song registration with global collecting societies and affiliation with performing rights management societies. In other words, most of us don't need to pay for the Pro version.

2. Distrokid

Distrokid provide a music distribution service that charges a subscription service of $19.99 per year to upload as many songs as you want. On the plus side, it distributes 100% of the royalties you generate from streaming. It's perfect for those who are constantly uploading music and prefer to pay an annual subscription rather than pay per release.

It also has more expensive plans for those who need to upload more than one artist profile: Musician Plus ($35.99/year for 2 artists) and Label ($79.99/year for 5-100 artists).

On the downside, some benefits are charged for extras such as YouTube Content ID (from $4.95), cover license ($12) or store maximizer ($7.95). In addition, you also have to pay for the plan every year to keep your music in the shops; if at some point you decide to cancel and not upload any more music but want to keep it forever, you have to pay an additional fee (Leave a legacy $29).

3. ReverbNation

ReverbNation is the only one music distribution service in this list that highlights a website-builder for artist branding, as well as fan feedback for music. Indeed, ReverbNation's suite of features surrounding the basic music distribution panders to the artist's career: marketing and promotion tools with email and social messaging functions, social media and digital ads, crowdsourced listener reviews, and feedback, and even sponsorship under the ReverbNation brand where artists are introduced and exposed to music industry partners and events. These value-added services come with a separate price tag.

ReverbNation starts at the low price of $0 for direct selling and a basic package of features, but also offers three, larger paid packages with more functionality. For free tier users, they can pay for digital distribution starting at $1 per single or $9 per album per year.

LANDR takes advantage of AI-powered audio mastering for its software (that also performs audio mastering for video), attempting to give a professional feel and finish to every track produced by its users. Once done with the production process, artists don't have to go elsewhere for digital music distribution with 100% of earnings and creative control.

Also has its own promotional tools and offers free sample packs for inspiration and use. Where ReverbNation offers crowdsourced listener feedback and reviews, LANDR lets producers hear feedback from fellow users.

Pricing is split between audio mastering and release and just digital music distribution. Mastering and release start at $4 per month that works out to $48 billed yearly, while digital distribution only starts at $1 monthly, working out to $12 billed yearly, for 10 tracks.

Tunecore provides its users with comprehensive sales data, and as value-added services: social media promotion and music publishing administration. Essentially, a complete dashboard of backend reporting, marketing, and administration to go with the digital distribution. Note that the value-added services incur a one-time fee.

Artists can distribute via Tunecore starting at $29.99 for their first year and $49.99 each following year for a full album, and $9.99 a year for a single. Tunecore also distributes ringtones for $19.99 a year. Finally, the company also offers distribution credits that can be exchanged for an album, single, and ringtone plans.

6. RouteNote

As a new artist, RouteNote could be the perfect music distribution platform for you to reach out to more audiences and worldwide stores. You can try signing up and exploring its advantages to determine if the services are suitable for your needs. RouteNote offers free distribution services for 15% of revenues, while also offering artists a premium plan that requires upfront payment but lets them keep 100% of all royalties. RouteNote claims to cover over 90% of the digital distribution market. Pricing starts at $0, with a 15% cut off any royalties earned as well as two other annual pricing options.

OneRPM actively leverages its global network of users for more visibility and opportunities for its members, amplifying the reach of its artists with the help of fan engagement from its existing user base. Also noteworthy is that it offers a free pricing tier, though OneRPM keeps 15% of all royalties-even for paid tiers.

The fundamental offer is music distribution, direct selling, and cover licensing, but extends to marketing, including social media, business intelligence, rights management and publishing, and a Music Video Network that also includes video production.

OneRPM pricing starts with a free tier for audio and a one-time fee for video and ringtone distribution. The company keeps 15% of royalties from audio, 30% for ringtones and Youtube, and 50% for specialty video.

This music distribution service gives 100% of the royalties, so that's awesome. It has some cool benefits like submission of your songs to playlists, sharing tools (smartlinks and pre-saves) and releases on all platforms.

It has three plans: Artist ($12/year), Professional ($19/year) and Label (from $45/year). The plans have the same benefits, except that artist is for one artist, professional for two artists and label from five artists. The most common option for most people is artist and it's really very economical for those who are constantly uploading music.

Ditto is the quintessential music distribution service without a lot of fluff. Aside from distribution, the company offers pre-release and promotional tools, streaming and sales data plus reporting, free ISRC and UPC codes, and chart registration.

One of the downsides is that there is no legacy option when you stop paying the annual fee. That is, if you leave Dittomusic, you will have to switch to another distributor because there is no option to leave the music forever.

Free vs. paid music distribution

To begin with, none of the music distribution companies are totally free. That is, otherwise they would not exist as a company because they would not generate a profit.But some provide a seemingly "free" service in which they do not charge monthly fees, but only keep a share of the profits generated by streaming (usually 15%).

Now, this may sound attractive. But if you think about it, in the long run you may generate significant profits and that 15% is a lot of money. So... if you have the long term in mind, it may be wise to pay an annual or monthly fee and keep more of the royalties for yourself.

Also, never trust platforms that give you everything for "free". Generally their customer service is not that good and you may have some major problems.

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This article will make it easier and more informed for you to choose the music distribution service that can most efficiently help your music reach your audience. It's not an easy task to choose the most suitable service to distribute our music, mainly because the distribution services offer very similar features and services.

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https://www.weforum.org/agenda/2020/05/this-is-how-covid-19-is-affecting-the-music-industry/

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help received by independent label during covid

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help received by independent label during covid

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Various associations have called on the media to promote local artists and music produced by local independent labels on their stations. This is the case of Argentina, where more than 60 organizations from all over the country joined the proposal. Thanks to this, Unísono has been launched, an independent music program produced by the National Institute of Music with weekly broadcasts on public television.       https://winformusic.org/the-independent-music-industry-in-covid-19-times/

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The consequences of the global recession caused by Covid-19 are devastating for the music industry but can also lead to positive and transformative effects.

Music is one of the sectors that has first been affected by the Covid-19 crisis, and it will also be one of the last to emerge from it. The closure of record stores, the cancellation of concerts, tours and festivals, and the impact of lockdown measures on public performance rights have blocked the main revenue channels of musicians and artists, independent music companies, and all the professionals and technicians who work with them.

The pandemic is showing contradictions, such as the fact that society has been able to benefit from the contents produced altruistically by many artists during confinement, helping the well-being and mental health of citizens, whilst many of their jobs were put at risk.

Music has tremendous social, economic and political value, and is a sector that, like research and science, contributes much more to countries than it receives in public budgets. Governments have an inalienable duty to promote and develop culture so that citizens can fully enjoy their cultural rights, such as the right to learn, create, and listen to music. Therefore, their political and financial response to the Covid-19 crisis is very important.

WIN and IMPALA, the organisations that bring together independent music trade associations in the world and Europe, respectively, have been mapping since the beginning of the crisis the main measures adopted to mitigate its negative effects.

Some examples of measures promoted by public administrations are tax incentives, flexibility in tax payments, social protection measures for workers, support for companies to carry out temporary layoffs with the state covering payrolls, soft loans, and subsidies or direct economic aid.

Too many governments have focused on promoting liquidity through loans on very favourable terms - even without interest - or through loan guarantees. But these tools are hardly used by independent labels, much less in a situation of total uncertainty about the real impact of the crisis on their future income, and with most of their billing channels diminished by the lockdown measures. The measures to defer payment of taxes or social contributions of workers and employers have been somewhat more useful to the sector, alleviating the burden of expenses in the short term.

In some countries, non-reimbursable aid has been approved for workers, with uneven amounts and effects (from US $1,500 per month in Canada to US $145 in Argentina). In Germany, the government has supported SMEs and cultural organizations with a one-time payment of 15,000 € (9,000 € for self-employed professionals). However, in many other cases the relief funds have been insufficient or have not been applied correctly. All independent music trade associations continue to lobby their governments to improve the stimulus packages already approved and those that will be needed for the economic reconstruction of the sector and the country.

Despite our members' calls for governments to approve specific plans for culture in general, and for music in particular, the response has been uneven. While in Latin America there are hardly any examples of concrete aid for the sector, in France the National Music Center has obtained a grant of 1 million euros from the Ministry of Culture to support record stores, distributors and phonographic producers, with amounts of 1,500 €, 35,000 € and 10,000 € respectively, and complementary to the ordinary support mechanisms implemented by the State.

Beyond making application, execution and justification deadlines for projects funded by public subsidies more flexible, there has not been much support for the music organizations themselves. We can highlight the Emergency Support Fund for Cultural, Heritage and Sport Organizations, a Canadian government's initiative to guarantee the viability of associations during the crisis. Organisations may request up to 25% of the grants they have been receiving from the general arts and culture programs, with a minimum of CA $5,000.

WIN and IMPALA have also been monitoring the initiatives carried out by private entities such as digital service providers, collecting societies, and other groups and associations.

Streaming platforms and other digital service providers (DSPs) have launched a series of initiatives to support the creative community. Relief funds in collaboration with local organisations and advances of royalty payments to creators have emerged as a direct way of providing financial support to the music industry. Among the initiatives with a more direct and positive impact for the independents, it is worth highlighting Bandcamp's campaign to give up its profit margin in favour of labels and artists once a month, and Apple advances to independent labels that meet a series of criteria. Tools aimed at helping artists with monetization have also been released or powered up. winformusic.org/digital-service-providers-responses-to-covid-19

As for the physical sector, #LoveRecordStores, Love Record Stores Day and #HoyMeComproUnDisco are examples of campaigns promoted by associations and private companies. Artists, fans and many others have posted messages of support on social media to encourage buying records from music stores during the crisis, and to highlight their vital role in the community.

Various associations have called on the media to promote local artists and music produced by local independent labels on their stations. This is the case of Argentina, where more than 60 organizations from all over the country joined the proposal. Thanks to this, Unísono has been launched, an independent music program produced by the National Institute of Music with weekly broadcasts on public television.

Some collecting societies have set up emergency funds to grant non-reimbursable aid to their most disadvantaged members. Other forms of support include advancing the payment of the distributions scheduled for the coming months to provide immediate liquidity to members, advances on future payments and interest-free loans. While these measures that can alleviate the immediate need for cash, it should be noted that prepayments and repayable loans can reduce future liquidity capacity, if the crisis continues over time. winformusic.org/producers-collective-licensing-organisations-responses-to-covid-19

WIN member associations themselves have gone the extra mile to try to mitigate the effects of this crisis and provide resources to their members and partners in the music industry. Many have created their own dedicated Covid-19 sites where they compile the measures adopted by governments and private entities, give health and safety advice, and provide any other useful information for companies and professionals in the sector. Newsletters, social media, and webinars have also served as useful tools for sharing information during the crisis. Some associations have even launched their own relief funds. This is the case in the United Kingdom, where AIM has devised and manages its own fund for freelancers and contractors in the music sector.

If there is a positive angle to this crisis, it is that it has demonstrated the value of working together and partnering to have a common voice and a direct dialogue with governments and other entities to demand adequate aid and measures for the sector. Lobbying work has multiplied, and existing independent label associations have joined in platforms or federations with the rest of the music industry subsectors to work together, in some cases for the first time since their establishment. In countries where there are still no formalized trade associations, companies have initiated contacts to work together and set common goals. WIN is supporting these initiatives, with special emphasis on the Latin American region through the WIN LatAm Network working group.

Although governments in many countries are already beginning to encourage a return to the new normal, entertainment venues, concert halls, bars, clubs, and especially festivals, will not open until there are sufficient guarantees. And even so, it will take months to regain the public's trust and go back to previous audience numbers, no matter how many security measures are put in place.

The only regular flow of income that artists and their record labels could theoretically have at the moment, which is the remuneration for the use of their songs on online content platforms, has suffered from a structural precariousness since its inception. The main pitfall is the digital value gap, whereby a large part of the income generated by making music content available to the public remains in the hands of the large technology companies that control streaming platforms such as YouTube or Facebook. The consequence is that neither the artists perceive enough revenue for their 'plays', nor their labels to be able to invest in new releases and artistic careers, especially from emerging talents.

Although some steps have been taken to tackle this problem, such as the approval last year of the European copyright directive, we are still far from seeing its end. This directive has not yet been transposed into national legislation, only in France, even though it could contribute to increasing the income of the entire value chain of recorded music at these critical moments. In other territories, the laws do not protect creators or the use of their works on the Internet, or even protect tech companies with mechanisms of safe harbour.

As an organisation that represents thousands of independent music companies and professionals around the world, our main goal is to continue fighting so that neither culture nor its actors are left behind and that, in this increasingly globalized world, local artists and creators, the diversity of music production, and the indispensable role of independent music SMEs are now valued more than ever. We must continue working on the challenges facing our sector, strengthening its financing and revenue mechanisms, demanding cultural and business development policies, and promoting the formalization and training of cultural professionals. And thus, lay the foundations for a lasting recovery, beyond the current crisis.

June 9, 2020

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The independent music industry in Covid-19 times - WIN

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Music is one of the sectors that has first been affected by the Covid-19 crisis, and it will also be one of the last to emerge from it.

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challenges maybe lack of financial resources. The opportunity is that big company often react slowly to the changes and delay the publishing date of album or music, giving the opportunity for small firm like in Sweden. However,  the big firms may offer tons of money to great musician who is in small label to make deal with them, just like Lil X with Sony in US.  https://www.rollingstone.com/pro/features/indie-artists-covid-19-market-share-986695/

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On March 11th, as global measures to stop the spread of Covid-19 began to escalate, U.S. President Donald Trump announced a ban on travel from mainland Europe to the United States. In a different era, this would have spelled troubling news for the entire Swedish music industry - which has long relied on its ability to export creativity (see: Max Martin, Shellback) and tech (see: Spotify) to the US entertainment business.

Yet, on this particular date, one of the most disruptive modern music companies in Sweden, Stockholm-based distribution and services firm Amuse, may have been celebrating a little too loudly to catch The Donald's address in full. March 11th was the date that local rapper Dree Low, one of Amuse's independent artist clients, claimed an astonishing 19 of the Top 50 tracks on Spotify's daily chart in Sweden. Math-heads won't need me to point out that 38% market share is monumental - the kind of number that would usually get whole record companies cheering, let alone a single DIY act.

The success of independent artists (defined, in this case, as those both owning their own rights and using a self-releasing platform) in Sweden has been bubbling away for some time. And yet, for the global record business, the overarching trend - that of DIY acts gobbling up increasing levels of market-share more typically claimed by major labels - may have massive ramifications for the future.

If Dree Low's domination of Spotify in Sweden last month felt like a new horizon for indie artists, it wasn't one without precedent. I have run the numbers on the IFPI's official Top 50 singles in Sweden last year: Five of the Top 20 tracks were released by indie artists, and in terms of domestic repertoire (i.e. the biggest songs by Swedish artists) no fewer than seven of the Top 15 tracks, nearly 50%, were by acts with no record label.

Amuse has been compiling the average monthly percentage of tracks from self-releasing artists on Spotify's Top 50 chart in Sweden: in January this year, this figure hit 29.4%, up on 9.9% in January 2019, and 0.8% in January 2018. If that trend continues at the same pace, by this time next year, indie artists will own more than half of Sweden's biggest chart hits. The question now for the worldwide music business is two-fold: 1. Will Sweden's indie artist trend go global? 2. Could Covid-19 actually act as an accelerant to indie artists' success?

As has been well reported on Rolling Stone, coronavirus lockdown has already caused the postponement of blockbuster albums from the likes of Sam Smith, Lady Gaga, and Alicia Keys, while simultaneously driving a proliferation of releases from independent artists via platforms like Ditto, TuneCore, UnitedMasters, and CD Baby. These factors lead to the logical assumption that we're about to see a significant global rise in indie artist market share. Lending credence to this idea, Denis Ladegaillerie, CEO of Paris-based Believe - owner of TuneCore - wrote earlier this month that leading streaming services, having noticed a slowdown in superstar releases, are telling indie artists who work with his company: "We have a very large audience of young people out there who are eager to listen to new material; please make [your] music available so we can engage them."

Diego Farias, CEO of Amuse, concurs with this version of events, and predicts that the current situation could even be responsible for accelerating 'the Sweden effect' to other corners of the globe. He says: "We believe that [Covid-19] will perhaps speed up a transition that was already taking place; it will allow indie artists to grow [chart share] at a much faster pace in a market like the US, which was, remember, initially very resistant to a change like streaming.

"This could be a big catalyst. In a couple of years we will look back at this moment and probably say, 'Wow, Covid-19, with all the bad things it brought, actually accelerated the growth of independents and their ability to impact charts around the world.'"

$15.8m-backed Amuse says its DIY user uploads rose 300% year-on-year in March. According to Farias, the Covid-19 lockdown has "levelled the playing field" for indie artists versus their major label-signed peers, both in terms of recording and collaboration and in terms of their ability to promote their music. He comments: "Artists are all trying to figure out how to collaborate and how to create art over crappy VOIP connections; it's the same for Lady Gaga, as it is Dree Low, or smaller independent artists."

Adds Farias: "Whatever role radio has played in the past, the real impact [in terms of music promotion] right now is coming on social media - something completely owned by the artist. And independent artists control their media channels in a way that not all major label artists have necessarily had to do in the past few years. It's a truly digital landscape, and that's where the opportunity becomes so self-evident for independent artists."

"In a couple of years we will look back at this moment and probably say, 'Wow, Covid-19, with all the bad things it brought, actually accelerated the growth of independents and their ability to impact charts around the world." -Diego Farias, Amuse

Meanwhile, over in Sweden, the major labels are fighting back. Einár, who had the biggest track of all indie artists in Sweden last year with Katten I Trakten, recently signed to Sony for his latest hit, Rymden och tillbaka. This is a story that closely mirrors what happened in the United States last year with two standout independent artists: Arizona Zervas and Lil Nas X, both of whom ended up signing multi-million dollar deals with a Sony label, Columbia Records, just as their breakout hits - Roxanne for Zervas and Old Town Road for Lil Nas X - were climbing global streaming charts.

This is very much a subject in Farias' purview: Lil Nas X was previously distributed by Amuse, which offered the artist its own seven-figure deal to stay before he jumped ship to Sony. According to Farias, big-money major label deals with indie artists today are the natural result of large companies trying to hold back an inevitable tide (using a dam built from an almighty stack of dollar bills). "It would be weird if the major labels weren't doing everything in their power to try and put things back in the order they prefer," says Farias. "They are definitely over-spending in some cases. It's a cut-throat business out there, and [the majors] are trying to get to deals done before [indie artists] explode."

Steve Stoute is CEO of US-based music distribution company UnitedMasters, which was backed by a $70 million funding round led by Google/Alphabet in 2017. UnitedMasters saw its own chapter in the Lil Nas X / Arizona Zervas / Einár narrative play out last year when teenage US rapper NLE Choppa, who had racked up half a billion streams with Stoute's company, signed an estimated $8 million deal with Warner Records.

Like Farias, Stoute says he is unperturbed by such occurrences, because the rise of independent artist market share, in his view - especially in the US market - is just in "the first innings." Speaking on Music Business Worldwide's podcast this week, Stoute told me: "When a new artist is getting $8 million, [or] $11 million for one fucking song, that's not the record business, man! That's the lottery business!"

He predicted: "In the next two years, you will see, on a yearly basis, the cumulative independent business - everything not released on the majors - will surpass the major business, [with] bigger market share."

That's a fairly optimistic forecast: Midia Research suggests that 67.5% of global recorded music revenues last year were generated by the major record companies, with all independently-distributed music (including indie labels) claiming 32.5%. That said, Raine Group recently estimated (pre-Covid) that independent artists alone would see their revenues grow by 32% in 2020, claiming an annual global recorded music market share of between 9 and 10%.

Amuse boss Diego Farias knows where he's placing his chips. "I completely agree with Steve [Stoute]'s assumption of where the world is going," he says. "It's been proven time and time again that Sweden is very early on new trends, and has the ability to predict where things are going. If you rewind the tape a little, when Spotify launched, the opinion at [record company] executive tables in New York, London and elsewhere was: 'This is just a Swedish phenomenon.' We're already seeing signs of independent music taking a larger percentage share in all sorts of different markets - in France and the Netherlands, for example, independent music is growing at a very fast pace."

Farias admits that, for now, it's perhaps easier for indie artists to challenge the major labels in markets dominated by local-language repertoire than it is in the US, where "the whole world is competing." However, he adds: "I don't know how many years it will take, but I believe this trend will happen in the US fairly soon - it's a matter of time."

Tim Ingham is the founder and publisher of Music Business Worldwide, which has serviced the global industry with news, analysis, and jobs since 2015. He writes a weekly column for Rolling Stone.

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Indie Artists Have More Power Than Ever in Sweden. Could Covid-19 Lockdown Take the Trend Global?

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On March 11th, as global measures to stop the spread of Covid-19 began to escalate, U.S. President Donald Trump announced a ban on travel from mainland Europe to the United States.

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Indie label in India suffered during covid

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Indie label in India suffered during covid

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Unlike Sweden, indie label situation in India suffered more.  In my opinion, may be the market share is extremely dominated by Bollywood music firm like 80% market share.  https://www.eastmojo.com/news/2020/06/17/indie-music-record-labels-on-shaky-ground-amid-covid-19-crisis/

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Guwahati: Among many sectors that have been impacted by the COVID-19 crisis is live entertainment and music industry of the country. Record labels have been especially facing the brunt of the lockdown as live gigs, concerts, music releases have all come to a standstill, which is far more saturated for independent record labels.

Also Read: COVID-19 crisis: Manipur artistes spread hope through music video

"There aren't many independent record labels to speak of in India because the industry has been almost dead for over two decades now. What we have in India, for a music Industry is, predominantly Bollywood music controlling 80% of the market. The other 20% is shared roughly by International and local vernacular music industries," said Ajay Chanam, the founder and managing partner of Half Step Rock, a music record label based in Banglore that started operations around March-April of 2015. The record label is associated with bands and artistes such as Lords Eastern Nomads (formerly PHYNYX), Guru Rewben, Spreading Roots and NAGEN.

Hailing from Manipur, Chanam added that there has been a surge in the number of independent musicians and artistes in the last couple of years, and from that perspective, one can say that the independent music scene is more vibrant now in India than ever before.

However, "for the few independent record labels that are out there, the pandemic has rocked their already shaky boats and there will be no easy return with the overall economy taking a nosedive," he said. Moreover, independent record labels earn through 360-degree contracts they have with their artistes, and they in turn earn through gigs, mostly. "All gigs have been canceled for more than two months now and don't seem likely to resume in the immediate future, either," he added.

Also Read: Nagaland Choir Olympics winner's musical tribute to COVID fighters

Prabal Bora, manager, Rainforest Records There are a few record labels out there including ours; however, it takes quite a long time, legally speaking, to establish one in Northeast India

Prabal Bora, manager of indie record label Rainforest Records based in Assam, said that the Northeast is already behind in terms of established record labels. "There are a few out there, including ours; however, it takes quite a long time, legally speaking, to establish one in Northeast," he said. Moreover, due to the rise of underground artistes and the rise of "bedroom studios," concept record labels are no longer a common scene. "With the COVID-19 scene, we are facing a huge crisis in the already rocky situation of ours as concerts, live gigs coming to a stop there is no revenue generation and even digital distribution is not enough," he added.

Spotify has already started a COVID-19 relief fund for those in the music community who are in dire need, across the globe. Movements such as 'I Lost My Gig' started as a way to bring monetary relief due to income lost by the cancellation of the SXSW music festival in Austin (Texas) but has now evolved the world over with chapters in Australia, Japan, Singapore, Malaysia, Philippines, and Canada.

Essentially, these are platforms that verify submissions of income lost by artists due to the cancellation of gigs collating verified databases for any party interested to help.

Also Read: Share song to donate: A musical tribute to COVID-19 fighters

There is a limit to how loud one man can shout alone for the 1.36 billion people to hear, and the big artiste, on the other hand, ones who can shout loud enough for people to take note of, aren't hit as hard, so aren't making the right noise, either.

Hence the crisis is as real as it gets. "The problem with the artiste community is, they will seldom ask for help. Not to a stranger. Rarely publicly. They are also very disorganised in the sense that most of them work as freelancers and are not a part of any trade or industry body which can represent their interests in appropriate forums," said Chanam.

He added that it's like every man for himself in this industry. There is a limit to how loud one man can shout alone for the 1.36 billion people to hear and the big artiste, on the other hand, ones who can shout loud enough for people to take note, aren't hit as hard, so aren't making the right noise, either.

Ajay Chanam, founder and managing partner of Half Step Rock One thing often leads to another in situations like this and therefore it is very important to keep our artiste alive during times like these. It is only through the prism of art that we can even look into the dark, honestly. It is only through art that we can bring some hope and joy during times of distress

"What's even more worrisome is that no one can predict the post-COVID-19 scene either," lamented Bora. With the fear of contamination still raging in the minds of listeners, there is a possibility of people not even turning up to gigs even after COVID-19 is said and done.

Chanam, on the other hand, echoed yet another concern regarding the ongoing and post-COVID scene. He said, "This is a temporary scene in my opinion and we will cross it in six to eight months. What I am afraid of is, the harm we might inflict on ourselves during this phase till we find the cure. What is happening in the US, for example. Black Lives Matter has become larger than the pandemic. One thing often leads to another in situations like this and therefore it is very important to keep our artiste alive during times like these. It is only through the prism of art that we can even look into the dark, honestly. It is only through art that we can bring some hope and joy during times of distress."

Also Read: Concerned UN urges both India, China to maintain maximum restraint

Half Step Rock has also launched the India chapter of 'I Lost My Gig' on Tuesday night ( https://ilostmygig.in). Over the next few days and weeks, the label will be seeking right partners in media (print, online, electronic, radio and outdoor), government, music associations, music festivals, artist management agencies, production houses, studios, conferences, and support organisations. "While it is founded and driven by Half Step Rock, we are open to others who want to join us in this effort and lend their expertise," said the founder.

Given the fact that it would still take time to attend any concert or gig physically, does it mean that virtual gigs are the new future?

With international, national, and regional artistes taking the help of modern technologies and the ever easy and available social media, they are entertaining their fans and themselves via these virtual lives. So, is it safe to say that virtual gigs are the new future?

Chanam disagrees. "Those who think that virtual gigs are the future post covid immediately, are people who do not understand neither the science nor the art behind sound and music. Leave alone the pure thrill both the artists and their fans derive in being in the same space together," he added.

Also Read: Sikkim court orders FIR, probe against 'Paatal Lok' producers

Technically speaking, he said, the digital sound is still inferior to analog and that is the reason why there is a resurgence in the sale and production of vinyl records amongst connoisseurs of music the world over. Secondly, the sound format used in most web-based music platforms to reproduce sound is the worst even among the digital formats available today.

"A WAV format, let's say with 24bit depth and 48Khz sample size, is roughly around 7-10 times the size of the same track in its MP3 form. Web-based applications, especially when free, are about pushing data without loss and compressing them to reduce dependency on larger bandwidth for lossless transfer of data. The richer the sound, the larger is the size of data to be transferred," Chanam said.

Hence we will either need super-fast internet speeds with super large bandwidths or better compression technologies than we have today that does not compromise on sound quality for virtual gigs to be an option. Additionally, all musicians know YouTube compression algorithms reduce the quality of their sound but they still use it as it is free and this free music still hasn't stopped fans from filling up the concert tickets. "Let's not confuse what some artistes are doing during the lockdown out of compulsion as their natural choice," he added.

Also Read: Woman completes 28-day home
quarantine at Debing

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Indie music record labels on shaky ground amid COVID-19 crisis

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Guwahati: Among many sectors that have been impacted by the COVID-19 crisis is live entertainment and music industry of the country. Record labels have been especially facing the brunt of the lockdown as live gigs, concerts, music releases have all come to a standstill, which is far more saturated for independent record labels.

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Big Music Needs to Be Broken Up to Save the IndustryA year without live music has been a disaster. So has corporate power in streaming, recording, and ticketing. Antitrust may be the only solution.

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Big Music Needs to Be Broken Up to Save the IndustryA year without live music has been a disaster. So has corporate power in streaming, recording, and ticketing. Antitrust may be the only solution.

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The Covid-19 pandemic has shattered the music industry. By taking away live music for what will likely be 18 months or more, Covid has ended the revenue stream that animated an entire music ecosystem. This is particularly true for independent artists with few other means of making a living in today's industry. Musicians lost two-thirds of their typical income in 2020. Live music revenue fell 85 percent.

The Save Our Stages bill, passed in December as part of the second round of pandemic relief, has offered a lifeline. But even after it's again safe to see a live gig, the underlying driver of the music industry's deep inequity will persist.

For decades, corporate concentration and the rise of streaming music platforms has shifted power to tech giants, and to a conglomerate that, through the staggering failures of US monopoly regulation, has come to dominate terrestrial and satellite radio, concert promotion, ticketing, artist management, and venue ownership, essentially every revenue-generating slice of the industry.

Three major record labels produce two-thirds of all music consumed in America. They are the most powerful buyer of music and talent, and they use that power to prioritize a handful of mega-stars and pop hits. They pitch music into massive radio conglomerates and streaming platforms that control how music is consumed, and they collect an ever-growing share of industry revenue.

Concerts, a crucial space where independent venues and artists have largely sidestepped corporate gatekeepers, are increasingly threatened by Covid shutdowns and the prospect that Live Nation and other Wall Street-backed giants will either buy them out or put them out of business.

The broad middle class of independent artists, record labels, venues, and other small businesses must now rely on-and increasingly pay-monopolists for access to bands and fans. For some, the pandemic made a difficult situation impossible.

Decades of bad policy got us here. Dangerous corporate mergers went unchecked, bad conduct unpunished. But now, sweeping changes to the way we police corporate power appear to be on the way. New legislation proposed in the Senate, along with a House committee's recommended legal changes after a comprehensive look at monopoly power among Apple, Amazon, Google, and Facebook, are aimed at reining in unchecked corporate power. If enacted and successful, the proposed changes would rebalance the music industry away from corporate bigness and toward music's vibrant, crucial middle class.

Five years ago, a record industry executive named Darius Van Arman gave a pre-Grammy Awards speech on the state of the music business. The co-owner of Secretly Group, he led an independent label that had become a taste- and hit-maker, with an artist roster including Bon Iver, Dinosaur Jr., and The War on Drugs. Van Arman offered a simple litmus test for whether music is "independent," a shapeshifting term applied to everything from punk bands playing basement gigs to the cash-flush "indie" subsidiaries of major labels. "You are independent if you are pro-competitive," he said.

He didn't specifically mention the three major labels-Universal, Sony, and Warner Music-but his logic would suggest that there was something inherently anticompetitive about them. He later clarified in an interview: If you're independent, you're "not looking to reduce competition by acquiring rivals" or for other unfair advantages that tilt the industry toward corporate dominance.

He's right. From the industry's emergence through the 1940s and 1950s, there were no major labels. There were just labels, numerous and diverse. Starting in the mid-1960s, many combined into a few much-larger labels that controlled major artists and their recordings. By the turn of the millennium, just five labels dominated recorded music. Then, in 2003, Sony bought rival BMG, and, nearly a decade later, Universal music took over EMI. Consumer and industry groups pushed officials to block both deals, particularly because of the power the combined labels would have over music copyrights and the distribution of physical albums. Antitrust agencies cleared both mergers unconditionally.

Today, Universal Music Group, the largest of the big three, is so big that many of its labels-Capitol Records, Interscope, Def Jam, Republic- have their own subsidiaries. "Concentration is always a danger; that's why there are competition authorities," says Martin Mills, head of independent label Beggars Group, which includes Matador Records, Rough Trade, and other indies. "I think it's a particularly bad thing when it comes to a creative business. When there are only three companies representing music and artists, it's obviously a concern."

Among those concerns are that the majors violated the antitrust laws. In the early days of streaming, the Justice Department probed the majors for alleged abuse of their collective power by refusing to license their catalogs to nascent streaming services, instead starting their own streaming app that would have exclusive control of the content. The government ultimately took no action. At the same time, state attorneys general extracted $143 million from the major labels and several retailers for conspiring to inflate CD prices, demonstrating the major's stranglehold on music distribution.

The majors still distribute more than 80 percent of all physical music today, dominance that has proven disastrous. Three years ago, independent record stores around the country began reporting bizarre shipments arriving at their doors: A truck-full of what was supposed to be new release records was filled with prescription cough syrup. At another store, a full-sized freight truck arrived with just four records inside. Something had clearly gone awry in the supply chain.

Just months before, Warner Music shifted the shipping and storage of its records to a company called Direct Shot Distributing, which already handled fulfillment for Universal and Sony, and the many independent labels that rely on the majors to reach record stores. When Direct Shot failed, it exposed shocking fragility in an industry that, again, relies almost entirely on the major labels to distribute physical records. It's not clear why all three majors chose the same fulfillment company, but when they did and it failed, they endangered the existence of hundreds of small businesses.

Major labels have helped greatly narrow what's considered "popular music." Major label artists released more than 90 percent of all top 10 songs over the last decade, and their dominance has drastically reduced the diversity in artists and sounds that appear and remain on the charts. According to data collected by Colin Morris, Michael E. W. Varnum, and other researchers and provided to WIRED, the number of new songs entering the Billboard Hot 100 peaked in 1966, with 740 new songs entering the chart. By 2001, that number had fallen to just 308 new songs, and today it remains around half of its 1960s peak.

The major's continued, unchecked pop music dominance is partially the product of the time-tested " blockbuster strategy" of overinvesting in a handful of extremely profitable artists and albums. But the majors are now more flush with cash than ever, and they've used those resources to buy a staggering number of new acts, an average of two a day.

None of this would be possible without relying on the other twin tower of music industry power: Spotify, Apple, YouTube, and the other streaming platforms.

Streaming has almost single-handedly saved the music business. From 1998 to 2013, industry revenue fell by more than half, from more than $14 billion to less than $6 billion, as music online abruptly culled the very profitable sales of CDs. When Spotify first arrived in the US in 2011, skeptics abounded (Radiohead frontman Thom Yorke famously called Spotify "the last desperate fart of a dying corpse"). Streaming, of course, has become the main way music reaches the masses and is the industry's primary revenue generator. Analysts believe streaming alone will generate $75 billion annually by the end of the decade, more than three times the industry's late-1990s peak.

As streaming rose to prominence, so too did the outsize corporate power that has come to control nearly all music distribution and revenue. Spotify and Google's YouTube account for three-quarters of all streams globally. Along with streaming services of tech monopolists Apple and Amazon, four companies have a near-total stranglehold on the market. "The level of control in those few large companies is very dangerous," says Louis Posen, head of legendary punk label Hopeless Records. To him it's no different than elsewhere in an increasingly monopolized economy, and no different than a century ago, when monopolies in railroads, oil, steel, and other essential goods controlled American commerce. "When just a few companies control the power, bad things happen."

That power imbalance has worsened the industry's inequity. Apple, Google, and Amazon are able to bankroll their music offerings through monopoly profits elsewhere. Spotify boasts 150 million subscribers, more than twice that of Apple, and its stock value has doubled during the pandemic. The stock market values the company at more than $50 billion.

While streaming has helped most survive, it's helped the major labels get even richer. In 2019, research group MBW figured the three major labels each made around $1 million an hour from streaming; only the biggest independent labels clear that much in a year. The top seven artists on Spotify each earn around half a million dollars per year from streaming on the service, while Spotify royalties pay the bottom 99 percent of artists an average of $25 annually.

Per-stream revenues are often microscopic among all streaming services. YouTube pays the least: To earn its monthly minimum wage ($1,472), an artist needs more than 2 million streams. Spotify doesn't pay much more; according to the Trichordist, an average midsize independent label can expect to make around a third of a penny per Spotify stream.

Streaming today accounts for 80 percent of all industry income. As much as the streaming services need the majors, the majors rely on streaming revenue even more.

That dominance means services like Spotify can charge exorbitant fees to labels big and small for the right to reach audiences. In the pre-streaming world, a record label would typically get 70 percent of every album sale, while the rest went to pay all of the labor-intensive services required to make, distribute, and sell a record. Today, that rate is about the same. Except the other 30 percent goes entirely to Spotify.

Over the past 18 months, Spotify has introduced multiple ways to grow the cut it takes from labels and bands. In 2019, it launched a product called Marquee, in which labels can pay for aggressive pop-up ads encouraging users to listen to a new record or artist. George Howard, a professor of music business at Berklee College of Music, told Rolling Stone that this is essentially the same major labels paying for the best displays in record stores. "All this does is continue what payola always has done: The major labels, which have the most money and the most frequent releases, get the most play, consolidating the amount of art that is put out there," he said.

Then, in November 2020, Spotify announced a new program in which labels and rights holders could take a lower royalty rate-as much as half, sources say-for songs that Spotify would then place into the "radio" algorithms it recommends to listeners. The platform's "Discovery mode" isn't technically payola, a legal term reserved for direct payments to radio stations and DJs in exchange for plays over the radio waves. But everyone WIRED interviewed for this story said it's payola by any other name: the exchange of money, in this case reduced royalties, for promotion in a product listeners believe is influence-free.

Charleton Lamb, the senior manager of product marketing at Spotify, says the company is test-driving the promotion with labels before launching it across the platform. The plan is to simply incorporate the lower agreed Discovery mode royalty rate into the broader algorithm Spotify uses to pair songs to passive listeners. If Drake's new single pops up in your radio feed, Lamb says, "it's truly not possible for me to say whether it's because you love Drake, or is it because it's Drake optimizing for a certain outcome." He says the tool is simply a way for labels to give an extra push to songs from artists they've invested in rather than having to spend marketing money up front at Facebook or Instagram in hopes of driving fans to Spotify. And even if a label pushes a song into the program, Lamb says, listeners will ultimately decide which songs succeed.

But independent labels and artists worry that the returns for relying on Spotify will quickly diminish. After all, if everyone's giving up part of their royalties for more visibility in playlists and radio streams, the advantage for doing so evaporates. To stand out, labels could need to give up even more of their streaming revenue to maintain that visibility. Very quickly, Spotify promotion will be reserved for those labels and artists most willing and able to forgo revenue for attention. And if you can't afford to give up any royalties? Good luck tapping into Spotify's 150 million subscribers. The algorithm, tinted by payola, will keep you out of the discovery stream.

Kevin Erickson, head of the Future of Music Coalition, says such schemes run counter to the basic promise of streaming. "Musicians need two basic things: access to audiences and sustainable compensation," he says. "Payola is fundamentally a threat to both. It allows huge companies to stand between artists and listeners, while driving down rates of compensation for every artist, at a time when artists' concerns about sustainability are especially acute."

It also breaks a core promise of Spotify's business model: that the music its listeners hear is organic, based only on the data the company collects about what listeners like and what songs fit that taste. Spotify and streaming in general was always meant to be a better deal for music fans, an experience tailored entirely to their tastes. "As a listener, you're losing out if you're getting more content from certain rights holders in your YouTube autoplay or in your Pandora stream or on your favorite Sirius XM channel or in your Spotify Discover playlists because the service wants to skimp on royalty payments," Erickson says.

Payola on digital services is a reflection of market power, but it also reinforces those services' market power, Ericksons says. Artificially low royalty rates disproportionately hurt musicians whose songs aren't built for mass scale and whose music speaks to specific community needs and values and isn't really "playlistable," he says. The problem for these kinds of small but crucial artists is that streaming only pays the bills at scale, but in order to even approach that scale, they're compelled to give up revenue. It's an unwinnable gambit, one that, because of Spotify's market power, even the most powerful major labels will feel pressure to participate in.

Luckily, at least before the pandemic, most middle-class bands could rely on gigs and tours to support their music and make it sustainable. Until market power interferes there as well.

Hundreds of small, independent music venues have shuttered for good. In an early pandemic survey, 90 percent of independent venue owners said they would likely close if the pandemic ended live music for more than six months and no federal support came. We've just entered year two, and while Congress has approved federal support, the money remains in limbo.

As independent venues atrophy, Wall Street investors and cash-rich monopolists are hunting for bargains. In October, Marc Geiger, Lollapalooza cofounder and former head of music at talent agency WME, announced that he had been gathering tens of millions of dollars in investor cash for a project he called SaveLive. It was, in essence, a private-sector rescue fund for independent venues on the brink of closing. Only, under Geiger's plans, the clubs would become his; an investment from SaveLive requires club owners to turn over a majority 51 percent stake. SaveLive's ownership demands make the venture look less like charity and more like the kind of corporate rollup operation Live Nation has been running for years.

For more than two decades, Live Nation has been the lynchpin for the vast and now nearly complete consolidation of the live music industry.

Live Nation's consolidation of the industry was rapid and aggressive, spending around $1 billion in just 18 months in the late 1990s buying independent concert promoters and venue owners. By 1999, when radio titan Clear Channel paid $4.4 billion for the company (then called SFX), it was the largest music venue owner and concert promoter. Antitrust enforcers took no action to stop the deal.

By 2005, Clear Channel had spun off its live music division into a new, standalone company: Live Nation, the country's largest artists manager and concert promoter and second-largest venue owner. Today, Live Nation is once again part of a massive broadcasting and live music conglomerate that wields immense power.

Live Nation has since combined with the ticketing monopoly Ticketmaster, satellite radio monopolist SiriusXM, and online radio leader Pandora as part of media mega-conglomerate Liberty Media. Last year, Liberty Media was approved to take control of iHeartMedia, the largest radio station owner in the country; prior to 2014 iHeart was known as Clear Channel. The proverbial band was back together, antitrust concerns and all. Competition and consumer advocates stridently opposed every corporate tie-up along the way; my organization was part of a coalition that argued against the Liberty/iHeart deal last year. Antitrust enforcers permitted every one.

The ways this corporate behemoth threatens the industry are myriad. Critics worry the combined company could again close off its powerful distribution channels to artists, labels, and venues outside of its orbit. The combined company could use its 850 radio stations, its monopoly satellite broadcaster, and its powerful online radio service to promote Live Nation artists, tours, and festivals, all served exclusively by Ticketmaster. Independent artists and small businesses in each slice of the industry could be shut out.

The company's power to steer business away from rivals is not theoretical. In late 2019 the Justice Department found that, for years, Live Nation had abused its monopoly by steering its artists and tours away from venues that refused to use Ticketmaster. The government could have sued for monopoly violations but instead simply amended the agreement it struck with the companies when they merged a decade ago.

As the head of Made in Memphis Entertainment, Tony Alexander does a little of everything. He runs a record label, one of just a handful of Black-owned labels in Music City. He runs an independent distribution company, manages artists, publishes songs-more or less every service an independent artist might need to reach the market. And Alexander says his artists need one thing more than anything else: independent venues.

Most of the soul, R&B, and hip hop artists Alexander works with are just in the process of building a following. They need exposure, something that opening for a more popular act can deliver. But in Alexander's experience booking gigs in bigger cities, bigger acts almost always have management companies. When those management companies also own and control live music venues, there's just no choice about the clubs his musicians perform in. Independent venues "are running into pressures," he says; they sometimes struggle to host the kind of talent that sells out shows and keeps the lights on. "In Memphis, that's a big deal," Alexander says. "Most live venues are small businesses."

Independent venue owners also worry that Live Nation will begin throwing its cash around. Last month, the company announced it's sitting on $2.5 billion in cash reserves, and it received a $500 million injection from Saudi investors in April 2020-luxuries entirely unavailable to independent venues and promoters. Today, Live Nation's stock price is at an all-time high, three times higher than it was in March 2020, even though it has hosted scant few concerts in the past year year.

Time and again, critics who opposed the myriad mergers that created the modern, top-heavy music industry told Congress, regulatory agencies, and the public that the deals gave too much power to a few companies, in violation of the antitrust laws.

Our twin antitrust agencies, the Justice Department and the Federal Trade Commission, reviewed every deal and investigated conduct over and over. Under both Republican and Democratic administrations, the agencies did nothing, and today the industry is more consolidated than ever.

After years of inaction, the country's antitrust apparatus appears poised for a revival that could end consolidation and disperse power in the modern music industry. Late last year, the FTC sued Facebook under anti-monopoly laws for illegally acquiring rivals Instagram and WhatsApp as a way to kill competition between the apps. The case marked the first major monopoly case at the commission in years and demonstrated a willingness to unwind harmful mergers, which could certainly be applied to music industry giants.

Legislative action to strengthen antitrust laws also appears imminent. Last month, Senator Amy Klobuchar introduced a sweeping antitrust bill that would force some big companies to prove that a merger would be good for competition before the government would permit it. It would also make clear that the law applies to companies that abuse their power as buyers of goods, services, and creative output, significant for corporations that control the industry's most important input: the music itself.

More significant antitrust reforms may come out of the House of Representatives. Last year's House Judiciary Committee report, in response to a yearlong investigation of monopoly power in big tech, recommended transforming the law to drastically curtail corporate power. Along with proposed break-ups of big tech firms, the report recommended new rules to limit the power of dominant digital platforms to exploit the creators and businesses that depend on their infrastructure. It also called for making some mergers presumptively illegal-a presumption that would have almost certainly stopped last year's Liberty Media-iHeartMedia megadeal.

Emboldening the antitrust cops to stop harmful mergers matters in the music business, as consolidation continues apace. In February, Sony spent $430 million to buy AWAL, one of the few big, independent distributors of digital music, showcasing the majors' continuing push to control distribution beyond record stores. And Liberty Media just completed the creation of an in-house "blank check" acquisition company, flush with more than $500 million to target a company "in the media, digital media, music, entertainment, communications, telecommunications, and technology industries."

The report's recommendations, if enacted into law, could also help stop harmful conduct in the music industry. An expanded monopoly law that includes an explicit ban on self-preferencing could prevent a conglomerate like Liberty Media from using its radio and streaming properties to boost the tours and artists controlled by Live Nation. A presumption of dominance for companies with a 30 percent share of any one market would touch many of the industry's corporate titans, exposing them to further monopoly scrutiny. With legal clarity and more assertive enforcement, independent artists, venues, and labels could sustain themselves without gatekeepers driving down artist revenue and charging increasing tolls to reach audiences, without major labels reasserting control of music distribution, and without live-music conglomerates cordoning off the most popular artists and tours from independent venues.

Independent artists, label heads, and venue owners can imagine a bright future for the industry. There are more bands, artists, and music today than ever before. Distribution is drastically simplified compared to the slog of manufacturing and shipping physical albums. The money is flowing. It can all work, if monopoly power in the industry is brought to heel.
Updated 3/19/20 7:30 pm ET: This story has been update to correct that Live Nation has hosted some concerts in the past year. Updated 3/17/20 12:10 pm ET: This story has been update to clarify that Spotify's Marquee feature requires an up-front payment.
WIRED Opinion publishes articles by outside contributors representing a wide range of viewpoints. Read more opinions here, and see our submission guidelines here. Submit an op-ed at opinion@wired.com.

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Big Music Needs to Be Broken Up to Save the Industry

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The Covid-19 pandemic has shattered the music industry. By taking away live music for what will likely be 18 months or more, Covid has ended the revenue stream that animated an entire music ecosystem. This is particularly true for independent artists with few other means of making a living in today's industry.

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THE EMERGENCE OF ACCESS-BASED MUSIC SERVICES: THE REAL-TIME LISTENING EXPERIENCE (TECH)

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THE EMERGENCE OF ACCESS-BASED MUSIC SERVICES: THE REAL-TIME LISTENING EXPERIENCE (TECH)

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In 1999 the global recorded music industry had experienced a period of growth that had lasted for almost a quarter of a century. Approximately one billion records were sold worldwide in 1974, and by the end of the century, the number of records sold was more than three times as high. At the end of the nineties, spirits among record label executives were high and few music industry executives at this time expected that a team of teenage Internet hackers, led by Shawn Fanning (at the time a student at Northeastern University in Boston) would ignite the turbulent process that eventually would undermine the foundations of the industry.

Shawn Fanning created and launched a file sharing service called Napster that allowed users to download and share music without compensating the recognized rights holders. Napster was fairly quickly sued by the music industry establishment and was eventually forced to shut down the service. However, a string of other, increasingly sophisticated services immediately followed suit. Even though the traditional music industry used very aggressive methods, both legal and technical, to stop the explosion of online-piracy services such as Napster, Kazaa, Limewire, Grokster, DC++, and The Pirate Bay, it was to no avail. As soon as one file sharing service was brought to justice and required to cease its operations, new services emerged and took its place. By the end of 2013, the sales of physically distributed recorded music (e.g., cassettes, CD, vinyl) measured in unit sales, were back at the same relatively low levels of the early 1970s.

During the 15 years that has passed since Napster was launched, the music industry has been completely transformed and the model that ruled the industry during most of the past century has been largely abandoned.

This rapid transformation of the music industry is a classic example of how an innovation is able to disrupt an entire industry and make existing industry competencies obsolete. The power and influence of the pre-Internet music industry was largely based on the ability to control physical distribution. Internet makes physical music distribution increasingly irrelevant and the incumbent major music companies have been required to redefine themselves in order to survive. This chapter will examine the impact of the Internet on the music industry and present the state of the music industry in an age of digital distribution.

Three Music Industries

In order to understand the dynamics of the music industry, it is first of all necessary to recognize that the music industry is not one, but a number of different industries that are all closely related but which at the same time are based on different logics and structures. The overall music industry is based on the creation and exploitation of music-based intellectual properties. Composers and songwriters create songs, lyrics, and arrangements that are performed live on stage; recorded and distributed to consumers; or licensed for some other kind of use, for instance sheet music or as background music for other media (advertising, television, etc.). This basic structure has given rise to three core music industries: the recorded music industry-focused on recording and distribution of music to consumers; the music licensing industry-primarily licensing compositions and arrangements to businesses; and live music-focused on producing and promoting live entertainment, such as concerts, tours, etc. There are other companies that sometimes are recognized as members of the music industrial family, such as makers of music instruments, software, stage equipment, music merchandise, etc. However, while these are important industry sectors they are traditionally not considered to be integral parts of the industry's core.

In the pre-Internet music industry, recorded music was the biggest of the three and the one that generated the most revenues. Most aspiring artists and bands in the traditional music industry dreamed about being able to sign a contract with a record label. A contract meant that the record label bankrolled a professional studio recording and allowed the artist entry into the record labels' international distribution system, something which otherwise was beyond reach of most unsigned bands. The second music industry sector-music licensing-was much smaller and more mundane than the recorded music industry sector. Music publishers, who were operating in this business, were largely a business-to-business industry without any direct interaction with the audience. Their main responsibility was to ensure that license fees were collected when a song was used in whatever context and that these fees subsequently were fairly distributed among the composers and lyricists. The third music industry sector-live music-generated its revenues from sales of concert tickets. Although live music has a long and proud history, it came to play second fiddle to the recording industry during the twentieth century. Record sales was undoubtedly the most important revenue stream and record labels generally considered concert tours as a way to promote a studio album, and were not really concerned whether the tour was profitable or not. Sometimes the record label even paid tour support, which would enable bands to go on tour and promote the album even though the actual tour was running with a loss.

This music industry structure, including the relationships between the three industries, was developed during the mid-twentieth century and was deeply cemented when the Internet emerged to challenge the entire system. The short-term impact of the Internet on the music industries primarily concerned the distribution of recorded music to consumers. This means that while the recorded music industry was severely affected by the loss of distribution control and rampant online piracy, the other two music industry sectors were initially left more or less unaffected. As a matter of fact, while the recorded music industry has suffered during the past 15 years, the other two industries have gained in strength and prominence. There are several reasons why this shift in balance has happened.

One of the primarily reasons is simply that as one revenue stream is diminishing, the music industry is required to reevaluate its other businesses and try to compensate for the lost revenues from recorded music by increasing revenues from music licensing and live music.

For instance, revenues from music licensing have more than doubled during the past 15 years due to new and more active licensing practices, but also due to the fact that the media industries have changed in a similar way as the music industry. There are now considerably more television channels, radio channels, videogames, Internet websites, and other outlets than only two decades ago, and most of these outlets need music as their primary or secondary content. Music publishers have also in general been more nimble than the record labels to address the demand from new media outlets. A clear example of how music publishers changed their business practices is how they strive to establish themselves as a one-stop shop for musical intellectual properties, where media outlets can clear all their music licenses with a single contract. That may sound like an obvious service, but in the traditional music industry it was not always the case. Rather, there was one legal entity holding the rights to the composition and another legal entity controlling the rights of the recording of the musical work (the master). Music publishers in the age of digital distribution increasingly control both the master and the composition, which makes the licensing process more efficient. The music licensing industry has during the past 15 years evolved into the most profitable music industry sector and is often also considered as the most innovative and agile sector of the three.

While music licensing is the most profitable music industry sector, live music has developed into the largest music sector. There is a fairly straightforward explanation why live music has experienced a surge during the past 15 years. Live music is simply easier to control than recorded music. A musical band that is in demand can grow their revenues from live music by increasing the number of concerts and raising the ticket prices. Even though the financial crisis of 2007-08 put a dent in the growth of the live music industry, it has nevertheless surpassed the recorded music industry in size. During most of the second half of the previous century, the largest music company was a record company, but after the Internet transformation of the music industry the world's largest music company is Live Nation, a U.S.-based live music company spun off from Clear Channel in 2005. This is a further marker of the changing power relationships in the music industry. It should be noted, though, that the boundaries between the three industries are not as clear as they were during the pre-Internet era. Music companies, including Live Nation, serve as a general business partner to artists and composers and support their activities regardless of whether they concern live concerts, merchandise, licensing, or distribution and promotion of recorded music to consumers. This means that it is no longer entirely easy to categorize a music company into one of the three industries, but, nevertheless, in the case of Live Nation its revenues are still mainly generated via live concerts, which still makes it relevant to refer to them as primarily a live music company.

This section has presented how the three main music industry sectors have been affected by the introduction of the Internet and how the size, strength, routines, and relationships between the industry sectors have been transformed. The next section will turn its attention specifically to recorded music and examine how new business models for music distribution may be able to lead the recorded music industry on a path toward recovery.

A Growing Digital Music Market

The music industry went to great lengths at the beginning of the century to put a stop to online piracy; however, they were not equally ambitious and innovative in developing new models for legal online distribution. Certainly, there were a few feeble attempts from the major record labels at the time, but the most important criterion in the development of these services seemed to be that they should not in any way threaten the existing revenue streams but should only add additional revenue to the companies. The majors did succeed with one of their goals, which is that the new services should not compete with the existing physical sales. However, unfortunately the services could not compete with anything, especially not with online piracy.

The first company that was able to create a successful online service for legal sales and distribution of music was not a music industry player at all-it was Apple Computer (as it was called at the time). In 2003, Apple was able to convince the major labels that music consumers would buy music legally if they were offered an extremely simple service that allowed them to buy and download music for less than a dollar per track. The service was called iTunes Music Store. In one sense,

iTunes was a radical change for the music industry. It was the first online retailer that was able to offer the music catalogs from all the major music companies, it used an entirely novel pricing model, and it allowed consumers to de-bundle the music album and only buy the tracks that they actually liked.

On the other hand, iTunes can also be considered as a very careful and incremental innovation, as the major labels' positions and power structures remained largely unscathed. The rights holders still controlled their properties and the structures that guided the royalties paid per every track that was sold was predictable and transparent. Apple were correct in their prediction of consumer behavior and the iTunes Music Store can not be considered as anything but an enormous success. In 2013, iTunes Music Store is the world's largest music retailer (offline and online) and it has sold more than 25 billion songs since its launch in 2003. The service has evolved substantially during its decade-long existence, and a number of competitors using more or less the same business model have entered the digital download music market. Even though the competition has increased, iTunes remains on top with a market share of more than 50 percent of the global digital music market. Figure 1 indicates how the global recorded music market has evolved since 1973, and shows that while the digital music market has been able to partially compensate for the decline of physical sales, the total recorded music market still has lost more than 50 percent of its sales since the peak in 1999.

Fig. 1

Recorded Music Volume, 1973-2012.
Note: Digital includes full-length albums and singles split by 4. Vinyl includes LPs and EPs split by 4. Music DVDs are not included. Source: IFPI 2013

While digital download services, such as iTunes Music Store, introduce a gradual change to the music business logic, there are other legal music services that are far more radical and thereby also far more controversial. These services do not offer individual tracks for purchase at a set price-they rather offer the users access to a large music library that they are able to listen to at their leisure. The users normally pay a monthly subscription fee that allows them to listen to as many songs in the library as they want, how often as they want.

This may sound like an appealing proposition, but these legal access-based music services have struggled both to convince record labels to license their catalogs to the services as well as to convince users that it is possible to enjoy music without actually buying and owning a copy of the track or album.

There is a considerable entrepreneurial activity in this segment of the music business, and services go live and bust on a weekly basis. Many service providers are still desperately looking for the business model that can attract music listeners and satisfy rights holders. The challenges are certainly considerable but the music service that so far has received the most attention of the international music industry and the one that could possibly have found the right path is a service called Spotify. Spotify is a useful vehicle for explaining the logic of the music industry in the age of digital distribution, and this section will present how service drives the music industrial transformation forward. Even if it eventually turns out that Spotify is unable to create a business model that is sustainable in the long term, it has already been able to transform the mindsets of both users and rights holders and will most likely be a music technological milestone on the magnitude of the Walkman, the Compact Disc, and Apple iTunes.

The Emergence of Access-Based Music Services

Spotify was founded in 2006 by Daniel Ek and Martin Lorentzon with the ambition to create a legal ad-supported music service that was free for the music listener but that generated licensing revenues to copyright holders.

Spotify was by no means the first attempt to create a legal service that could compete with illegal file sharing. Most predecessors had for various reasons failed miserably with their projects, which may be one reasonable explanation why the rights holders that Spotify was negotiating with were not particularly enthusiastic about engaging in another risky online music project. Despite all their initial skepticism, on October 7, 2008, the company announced that after two years of discussions and negotiations, they had signed agreements with the music industry's leading rights holders to distribute their music to audiences in a handful of European countries. In order to succeed where many others had failed, Spotify had been forced to make a number of concessions. In addition to offering the major rights holders shares in the company, they were also required to implement a fundamental change in their business model. Instead of offering a service that was solely funded by ads, they also developed a more advanced version of the service, which was funded by subscription fees.

Spotify's model with two or more different service versions where the most basic version is free and the more advanced versions are offered on a subscription basis is usually called freemium-a play on the words free and premium. Often, the profit margin for the free version is very low, or even negative, and it is expected that it is the subscription fees that will generate enough revenues to make the service profitable. The logic behind a freemium service model is that users shall be willing to use the service for free and that they while using the service gradually will make behavioral and emotional investments in the service that will increase the costs and efforts to switch to another service. The goal is to make as many of the users of the free version to convert to the subscription version. In order to achieve that goal, the free version has to have a number of increasingly annoying features (such as advertising) or lack a few key features (such as the ability to use the service on certain devices) that are removed/available on the premium versions of the service. The challenge for Spotify and other freemium services is to balance the different versions in a way that stimulates the right customer behavior and entices users to become paying subscribers. To date, few music services manage this feat. Either the free version has been too good to motivate customers to upgrade their service or it has been too deprived of features to attract customers at all. In Spotify's case they have achieved a conversion rate of approximately 20 percent, which means that 20 percent of the total user base is using the premium version and pay a monthly subscription fee.

Spotify has received a considerable amount of attention from the music industry across the world, but some of this attention has been largely based on suspicion and criticism toward their business model and methods. The criticism has to some extent focused on whether the freemium model presented above is long-term sustainable or not, but even stronger criticism has been focused on how the revenues have been shared with rights holders on different levels in the value chain. There are at least two reasons why this criticism has emerged. First of all, music companies have since decades back been used to a royalty model where a licensee pays a fixed amount per song sold, played, or used in whatever way. That model is very difficult to apply to an access-based service since the revenues that are generated by the service is not based on songs sold, played, or used, but based on the number of users of the service. Providers of access-based music services-regardless if the services are funded by subscriptions or advertising-have argued that rather than paying a fixed amount per track that is listened to, they should simply share whatever revenues are generated with the rights holders. Without getting too deep into the accounting detail, such a scheme is very beneficial to the service provider but transfer a considerable part of the business risk to rights holders.

Rights holders argue that their revenues should not depend on the skills of the service's advertising sales team, but they should simply get paid for the music distributed to customers. In the past, a number of access-based service providers have been required to sign contracts that have generated fixed royalties per track to rights holders. However, such agreements make it very difficult to get an access-based music service off the ground, and several pioneers in the access-based music service market have not been able to survive for very long. One of the reasons why Spotify is considered as a milestone in the shaping of the new music economy is that the company seems to have successfully convinced the major music companies in certain markets that they should indeed share Spotify's business risk and instead of taking a fixed license fee per track, they should take a share of Spotify's revenue, regardless of how high or low it is. Spotify succeeded by making a number of concessions in their negotiations, for instance by offering the major music companies the opportunity to buy a minority share of Spotify's shares.

Spotify has reported that 70 percent of their revenues from ads and subscriptions has been paid in royalties to rights holders. At the end of 2013, the company has generated more than a billion dollars for rights holders around the world, which according to Spotify is proof that their model does work.

However, even though it seems possible to generate revenues from access-based music services, the new contract structure is a radical change in the music business attitude toward distributors, and it is by no means uncontroversial. Some of the criticisms expressed by artists and composers are caused by the fact that the royalties are primarily paid by the service providers to music companies and not directly to the composers, musicians, or artists. The creatives argue that they are not given a fair share of the revenues and some of them even actively choose not to license their music to the services such as Spotify because the revenues that end up in their pockets is almost ridiculously low and that they do not want to support a corrupt and unsustainable system.

One reason why this problem has occurred is a debate about the classification of the royalties generated by access-based music services. Music companies (i.e., in this case the old record companies) claim that the royalties shall be considered as unit-based music sales, which in that case would mean that the musicians receive between 10 and 20 percent of the royalties paid by Spotify to the music companies. The musicians claim on the other hand that Spotify cannot be compared to traditional record sales at all but should rather be categorized as a performance, which in that case would mean that the musicians are entitled to 50 percent of the revenues rather than 20. The conflict concerns to a great extent the interpretation of agreements between record companies and artists that were established before Spotify and even the Internet existed. The debate about what type of royalty a particular Internet-based music service should generate may seem like a legal issue with minor real-world implication, but it is an absolutely crucial question that will determine the structure of the future of the music industry. Much is at stake and it is unlikely that the music industry players will easily agree on a model that is perceived as fair to all parties.

This section has discussed the emergence of access-based music services and the challenges they have encountered as they try to enter the digital music economy. The next section takes this discussion one step forward by reflecting on how these services change the audiences' relationships with music. The section argues that access-based music is merely a transitional phase in the evolution of a new music economy and points at indications of how the industry increases its reliance on so-called context-based features and services.

The Real-Time Listening Experience

While revenues from recorded music have fallen dramatically during the past 15 years, people across the world do not listen less to music-rather they listen to more recorded music than ever before.

Recorded music permeates every aspect of our daily lives and legal access-based music services combined with illegal online file sharing services means that more or less every song is available everywhere, all the time. This access explosion transforms the way people use and relate to recorded music.

For instance, in the pre-Internet days recorded music was expensive and scarce. Music listeners chose what record to buy with care and the growing record collection in their living room cabinets served as a diary of their lives told via a number of record purchases. Music listeners owned their physical records in the same way as they had a strong sense of ownership about other physical objects, such as books, souvenirs, or furniture, and these objects served as tools for both identity formation and communication.

Institutions, such as collection and ownership, become increasingly irrelevant in the age of digital distribution and ubiquitous access to music. In the light of this observation, a relevant question is what the new role of recorded music as an identity marker in the age of digital distribution may be. The retrospective record collection served as such an identity marker in the pre-Internet age, but as music listeners abandon their physical collections they are required to search for new ways to use recorded music as a tool for communication of their identities to their friends and the world. The scenes that are increasingly used for that purpose are online-based social networks such as Facebook, Twitter, etc. Access-based music services are commonly interconnected with such social network services, and thereby allow music listeners to constantly announce to the world what track they are currently listening to. This stream of information is primarily of interest to advertising platforms and their clients since it allows them to profile the audience based on their listening habits and send them advertising messages that are adapted to their demographics and interests.

The shift from the retrospective collection to the real-time listening experience is a radical shift in music listeners' relationship to music. It diminishes the significance of the memory of past music experiences and moves the focus to the here and the now. It is interesting to note the kind of structures and behaviors that emerge as music consumption shifts from ownership to access and from the collection to the now playing. Amaral et al. (2009) have, for instance, shown that music listeners actively curate their music-listening feed in order to make sure that it does not reveal a track that does not fit with the image they want to exhibit. Some access-based music services have even created a "private-listening feature" in order to enable users to listen to music without sharing the experience with the world.

The access-based services are still in their early days and they still actively search for the optimal service and pricing structure that will allow them to compete and survive. Currently, the competition between the services is largely based on the size of their music catalogs, availability in different territories and different mobile platforms, etc. However, it is reasonable to assume that eventually all these services will asymptotically converge toward a similar music offering and will be available on all platforms and include more or less every song that has ever been recorded. According to basic economic theory, the competition between similar services or products will be based on price, profit margins will eventually shrink, and a few large players will eventually survive and compete in an oligopolistic market. Access-based music services will in other words become a commodity market and behave in a similar way as the markets for sugar or oil.

When the market has reached this gloomy state and the room for innovation and differentiation based on the pure access model is more or less exhausted, online music service providers will most likely look for other ways to differentiate their services and to keep up their profitability. One way of doing this is to go beyond the pure access model and to create services and features that provide a context to the songs in their catalog. The context may for instance enable music listeners a way to search and easily find the song they are looking for at a particular moment, it may allow users to share their music experiences with their friends, to organize their favorite music experiences in convenient ways, etc. Such context-based services provide a less deterministic and far more expansive space for innovation than those services that are based on a pure access model. While innovation within the access-model framework leads toward the same ultimate goal (universal access to all songs ever recorded), innovation within the context-model framework lacks such a knowable outcome. A provider of a context-based music service has a greater possibility to create a competitive advantage based on unique, innovative features than what is possible within the access-model framework.

Today the number of context-based services grows alongside access-based music services and most often a music service offers both access to music as well as a range of features that allow users to do things with music. The customer problem that needs to be solved is not that the customer needs access to music but rather how to navigate and do things with that music. In other words, customer value is increasingly created by providing the audience with tools that allow them to do things with music rather than by providing the audience with basic access to music. This shift from providing access to music to providing services and features that are based on the assumption that access to music is already provided is part of a similar general transformation of the music industry. The discussion has up until now been focused on the distribution of music, but the shift from content to context can be also observed in other segments of the music industry value chain.

A number of artists and composers have during recent years implemented the context-focused model in the creative production of their musical works. Rather than only making polished recordings for the audience to experience and enjoy, they have created services and practices that involve the audience in the creative process and allow the fans to do things with music. The British singer-songwriter Imogen Heap is one example of this trend. Heap actively encouraged her fans to upload sounds, images, and videos during the production of her latest album. She used this material in her work both as inspiration and as actual building blocks to her songs. As a consequence, Heap's fans felt they were collaborating with their idol and were part of a communal, creative experience. Billy Bragg is also a singer-songwriter from Britain, but from a different generation and in a different genre than Heap. Bragg has also established a context-oriented experience for his fans, albeit perhaps primarily driven by his fans than by Bragg himself. Bragg reflects on his relationship with his fans and explains that he provides a "social framework" for his fans and that some of his fans don't even like his music but they enjoy being part of a social community (Baym 2012).

Other musical artists and producers go way beyond the traditional format of the song and create mobile applications that allow the users to play with music in different ways. London-based RjDj and San Francisco-based Smule are two examples of organizations that have developed such applications that challenge the boundaries between music and interactive videogames. These tendencies raise fundamental questions about the definitions of the music industry and music organizations. Will tools and software for playing with music become recognized as a vital part of the music industry and a fourth core sector of the industry, next to live music, music licensing. and recorded music? If so, what will this mean for established music companies, artists, and composers? When live music and music publishing became increasingly important industry sectors in the first years of this millennium, traditional record labels reinvented themselves, built new capabilities that allowed them to serve as record labels, music publishers, management companies, live music companies, etc. They turned into 360-degree music companies, which placed equal emphasis on all three music industry segments. If context-based services and software will continue to grow in importance, music companies will need to add yet another new competency and perhaps new business areas to their organizations that will enable them to capture the increasing value created by context-based music services.

The Music Industrial Transformation Continues

The recorded music industry has been radically transformed during the past 15 years, but much remains before the industry takes the definitive step and leaves the physical world behind. This chapter has discussed some aspects of how this transformation continues, and how access-based music services play a substantial role in this process. The chapter has also touched upon how the recorded music becomes increasingly marginalized as a revenue source and how other industry segments such as live music and music licensing become increasingly significant. Finally, it has also presented how the audiences' relationships with music change as a part of this transformation and how services and features that allow users to play with music rather than merely to play music move into center stage of the music industry in the digital age.

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The Music Industry in an Age of Digital Distribution | OpenMind

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In 1999 the global recorded music industry had experienced a period of growth that had lasted for almost a quarter of a century. Approximately one billion records were sold worldwide in 1974, and by the end of the century, the number of records sold was more than three times as high.

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2022 Outlook segment findings: Markets and Industries

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2022 Outlook segment findings: Markets and Industries

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1) What was the structure of the music industry before Covid and where was Spotify's position? What was Spotify's relationship with small enterprises?
2) How did Spotify's relationship with small and medium enterprises change during covid?
3) How did Spotify's relationship with small and medium enterprises change after covid?
4) What does the market look like now?
5) What theories explain this change?

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The openMind article on the future of Spotify: When the market has reached this gloomy state and the room for innovation and differentiation based on the pure access model is more or less exhausted, online music service providers will most likely look for other ways to differentiate their services and to keep up their profitability. One way of doing this is to go beyond the pure access model and to create services and features that provide a context to the songs in their catalog. The context may for instance enable music listeners a way to search and easily find the song they are looking for at a particular moment, it may allow users to share their music experiences with their friends, to organize their favorite music experiences in convenient ways, etc. Such context-based services provide a less deterministic and far more expansive space for innovation than those services that are based on a pure access model.