This report establishes the importance of "business" within the music industry.
This report establishes the importance of "business" within the music industry.
Within the last 10 years the music industry has changed dramatically; it has entered into a digital revolution, resulting on both positive and negative changes. The creation of DAB radio has allowed music to be shared on a greater platform, however billions of pounds have also been lost through piracy due to the creation of Peer to Peer file sharing. Hardrives on computers have also becoming less expensive. Soundcloud have said that
“It's no secret that in the past decade the way we engage with music has changed dramatically, owing partly to the rise in online music services—from Napster and iTunes to piracy and (if you believe the record industry suits) Bitcoin. It's certainly true that the sale of physical music has been in decline for some time, though it still remains the dominant format for music purchases in the UK. But digital downloads are nipping at its heels in a big way, and have already overtaken physical sales in the US.
Downloads, however, aren't the only threat to conventional streams of musical revenue. On-demand streaming services are amassing an increasingly large audience and producing growing revenues, according to the record industry body IFPI. But just because revenue from streaming is growing doesn't mean it's making up for losses in other areas, and that's why artists and record companies are so worried.”
Although the creation, and increasing popularity, of online streaming and videos has caused the music industry to make a massive hit from piracy, it has enabled unlimited ways in which music can be promoted for very little expense.
Many other changes within the media industry have affected the music business, such as the rise of the smartphone. This has enabled people to use their phones as MP3 players. The decline of analog recording services because of new hardware, such as firewire mixers (which are also inexpensive) have put a number of local studios, and other recording businesses, out of business. Modern day recording has also never been easier. You can pick up reasonably priced mixers on most high streets, and plug them straight into your own computer. This has given birth to the 'bedroom studio.,
The rise and fall of music companies in the last ten years has seen bigger companies dominate the market meaning that smaller companies have been going out of business. This has also led to companies merging together to create bigger businesses, or often bigger companies that can afford to, buying smaller business to take over, or even just taking on their clientele. This can be seen in the merging of EMI, which is a UK / European music company, with UMG, a much larger music company based in America.
The BBC said: (BBC News Online, 2012).
"Competition in the music business is crucial to preserve choice, cultural diversity and innovation. We have paid close attention to digital innovation, which is changing the way that people listen to music."
This chart shows the figures of the number of online views that music labels have received ten years.
By looking at this chart we are able to see that all labels have a large number of online views.
If you consider how many people are watching and listening and downloading music online, it must be having an effect on CD and vinyl sales.
If we now take a look at the below chart on single sales we can see how digital sales have increased dramatically, whereas compact disc sales have dropped. I believe the increase in digital music will eventually make compact discs obsolete. This has been seen in that past with the cassette tape exactly what happened to the cassette when CD's were first introduced.
Record labels are vital within the music business. The main objectives of record labels are to develop artists and to try and tailor them to how they want them to be perceived by the public. They also help promote the artist through different media platforms such as:
These are music forums, blogs and many other different types of social media. As seen in Fig 1, the large amount of viral views suggest this is the best way to get noticed.
The label is also in charge of fabricating the artist’s music and merchandise; this is where A and R (artists and repertoire) comes in. The A and R department are the first department within the label to communicate with the artists as the A&R department find the talent and then show the talent to the label, the A&R department will always act as a buffer/liaison between the record label and the artists and helps to creates a very personal relationship between them.
The A&R department controls the majority of the artistic side of the artists, deciding on how they want the artists to sound (in recording and performance). It is also common for the A&R department to help decide on release dates.
There are three main sectors in A&R, which are normally the A&R talent scouts, A&R managers and the head of the A&R department who oversees how everything is achieved whether it’s the recording process or promoting the artists.
When the record labels decide to merchandise then they have to incorporate and collaborate with other companies. This allows them to distribute music, tickets and artist merchandise. It is also important to make sure the legal department from the record label is there to help and advise to make sure everything is above board.
The legal department is there to handle all the different contracts for the artists and the record label. They also work on the logistics and on negotiations between companies. The legal department also has a team of attorneys that will work closely with the label/artists if any lawsuits were to occur.
There are many companies, which can collaborate with the labels, for example the main company that does the merchandising for universal music group is Bravado.
Bravado works very close to universal music group by providing the company with a world wide high quality standard merchandise. Which goes out to a worldwide audience across seven different continents.
Here are some of Bravado’s clientele:
The Beatles,
The Rolling Stones,
Bob Marley,
Run DMC,
Paul McCartney,
Lady Gaga,
Michael Jackson,
Justin Bieber,
Eminem,
Kanye West,
Metallica,
Lil Wayne,
Katy Perry,
Guns ‘N Roses,
Red Hot Chili Peppers,
Green Day,
Black Sabbath, and
The Killers.
Publishers are also vital within the music industry. The fundamental objectives of the publishers are to control and collect royalties, issue licenses and to exploit the music.
Before royalties can be collected the artist needs to be signed up to Performing rights society (PRS)(www.prsformusic.com) or Phonographic performance limited (PPL) (www.ppluk.com) both of these companies offer royalties being distributed out evenly throughout artists and companies. Before collecting royalties, if an artist is signed up to a label, licenses need to be drawn up for how much of the royalties are handed to the record label the publisher and the artist .
The publisher will also exploit the artists music for the use of motion picture (film/television) and also radio but the publisher will also come up with other means of marketing the artists music so the royalties can be obtained such as remixes and sound packs that the royalties can be claimed from.
Royalties can also be gained by live performance as every licensed venue pays a yearly fee to PRS/PPL.
The live sector also plays an important role. The key attributes of the live sector consist of many different sectors; one of the key attributes is live performance, which can mean festivals, acoustic sets or tours. There are many different types of tours, these include 'toilet tours' which is where an artist travels around playing small venues; the scatter approach, which is where the artist plays wherever they can obtain gigs; support tours, where the artist goes on tour with another artist and plays the support slot; headline tours, where the artist travels the countries performing at big venues to a specific audience; and residency tours, where the artist plays on the regular. However, to even consider touring the artist, record label and the publisher need to work out the logistics. For example promoting the tour, how they are going to sell the tickets , how they are going to sell and produce there merchandise and also taking up the costs of fees and how much income the artist / publisher/agent and the label will get.
Depending on how big the act/ artist is will depend on how much merchandise will be sold. The merchandise offers alternative ways of making money, this can offer a major amount on profit.
Hiring promoters and street teams can help the tour to reach out to more people. There are three different types of promoters; freelance, which are promoters that work for themselves and make deals with the band on what and how they will earn. Most promoters normally take a percentage of the venue entry fee. In-house promoters, who come and promote for the venue and will normally earn a set wage, this can cause problems in promotion because if the band hire a freelance promoter then the promoter will be motivated by the amount they get back, rather than in-house, who just get a set wage. Finally, there are major promoters, these work for the record label / publisher and they normally receive incentives to do well or the same as freelance that they get a percentage of the door takings.
With all the promoters mostly trying to sell tickets on the street and on the door, this does not taking into account that tickets (for bigger gigs/tours) are normally sold online. This means promoters are also used to bombard all social media platforms with info, prices and venue to try and push sales.
Most publishers use these websites to sell tickets on:
www.ticketmaster.com / uk
All these websites offer competitive rates on ticket sales.
Link to ticket masters service charge information page:
All gigs and tours are normally found and booked by agents who are hired by the record label. They also pitch the artist for support tours and support acts to other record labels.
The live sector can be a very lucrative business as it offers many different ways of income for all those involved, merchandise sales, ticket sales, music sales and other artists paying for the privilege to perform as a support.
All artists and bands are different, and this is reflected in the way they choose to work. Some bands/artists would rather go for the "do it yourself" approach and do everything independently and be involved in all of the steps. Other artists/bands will look for the right contract to sign and then leave all of the logistics to the record labels and publishers. Some artists are about the money and some are about the music, showing that no too artists are like.
In the last couple of years there has been a rise in more independent record labels. There are now a lot of scam record labels about who sign short contracts, and also record labels who want to change artists/bands to tailor them to there own specifications. This can be seen with current singer/song writer Jessie J. She approached a record label and was not signed because she was not what the label was looking for. She went away and changed her style, came back and gave them what they wanted. This resulted in her finally getting signed.
Being a manager is tough job, as normally the manager deals with everything and anything to do with the artist so the artist/artists can focus on the creative side of making their music. They leave the manager to worry about the logistics and doing everything else for them. The main job role of the manager is to oversee the day to day running of the business side of the artist or the band; normally the manager takes a percentage of what the artist/band receives. A manager is not always necessary, as someone in the band or the artist themselves can take up the job role.
There are also a few types of collection agencies that are used in the music business. The three main ones in England are PRS (Performing Rights Society), PPL(Phonographic Performance Limited), and VPL (Video Performance Limited). PRS and PPL are both linked, as you can either pay a one off fee of £50 to join either one of them or pay £100 for both, and both of these companies will collect your royalties for you and pay you every 3 months. This is not guaranteed income as you need to claim every time you perform and it can not be a lot but it can count towards a part of an artists income, there is also VPL (Video Performance Limited) which license your music videos, publically broadcast your videos and it also partners with PPL for the use of television other visual media.
Below is a chart that shows the increase of money in PRS: (PRS For Music, 2011)
In the last ten years there has been an increase in money earned. This is because more establishments and venues signing up for PRS.
In this chart it shows how many countries have and use PRS as you can see this is 90% of the world. (PRS For Music, 2011)
I believe in the next ten years I think the music industry will change greatly, because we are now in the digital age. This means many possibilities have been created for the music industry, musicians and companies. The use of the Internet and computers in this revolution is just going to advance over and over again. I trust that in the next ten years we will see cd sales drop even more that we saw in the last ten years, quite possible making the cd obsolete. I also think that music shops are going to disappear and we are going to see a rise in online music websites such www.play.com andwww.amazon.com.
Blogs and forums in the next ten years will also grow and maybe become one of the main resources of distribution. I also believe that self publishing and individual record labels will appear causing the bigger labels to begin to lose there clientele, as the artists and bands realize it is more lucrative to do everything them selves, the "DIY" approach.
The Internet grows every day, on a global scale, as more websites are created and advertising is distributed, more music sharing websites such as www.spotify.com,www.deezer.com and www.soundcloud.com will increase.
The majority of labels will be internet based, which will make a higher demand of music studios as the record labels will not own their own but hire them on a daily bases. This could result in the rise of DIY studios. However, I think that the downfall of the DIY studio approach is that sound quality may decrease because of the lack of professionals.
The more individual record labels that appear, the more jobs I believe will be lost by music industry professionals. I think that the music industry will not be able to sustain a steady source of income to those professionals.
In the future of the music I think that commercial music will take a step back, as less well known genres will take the stage. These genres include EDM electronic dance music, techno and house. I understand that these genres might not appeal to the older generation but the younger populations of the world do find those genres very appealing.
Due to the extremity of the loudness war and these electronic genres coming into their own, the future of the music industry might see the extinction of some musical instruments. All the fundamentals of future music are based around the audience and the public. They decide how many views and listens online music receives, how many compact discs are bought, and how many vinyl sales there are. In the current day and age, if the Internet was to go down, it would be very difficult for people to be able to listen to music. They would have to go back to basics, using cd players and vinyl players, as the majority of the music now has been downloaded from the Internet.
In conclusion, I think that streaming music on the Internet and online downloads will increase as time goes on. Other trend genres such as techno, EDM (electronic dance music) and house will carry on the way up. But I also believe because of the older generations opinions on how they listen to music, we will still keep vinyl and cd sales alive but on the bare minimum. Even though the way that music is recorded is changing, with the likes of the do it yourself approach getting more popular, I think that certain producers and musicians will still choose to record using tape, keeping the acoustic and analog world alive, although on a smaller scale.
Festivals and live concerts will also stay around but the appealing factor of one man on a stage with a laptop will also be on the rise as the sound quality and hardware will only get bigger and better. There are already so many Disc jockeys and producers in the world packing out stadiums what is to say that this wont carry on. There are no underlying facts to say that these things will happen but there is a huge assumption from many musicians, artists and people amongst the music industry.
References:
Jack Phillips (2014) The Future of the Music Industry, According to Soundcloud [Online] Available at http://http://motherboard.vice.com/en_uk/read/the-future-of-the-music-industry-according-to-soundcloud [Accessed 12 May 2014]
BBC News Online (2012) EMI-Universal deal cleared by EU and US regulators [Online] Available at http://http://www.bbc.co.uk/news/business-19672277 [Accessed 12 May 2014]
ROUTEBOT. (2012). Single Sales 1977-2012. [Online] 24 February 2012. Available at http://http://routenote.com/blog/music-single-sales/ [Accessed 12 May 2014
PRS For Music. (2011). PRS For Music International Income. [Online] 2011. Available at http://http://www.prsformusic.com/aboutus/press/latestpressreleases/Pages/InternationalincomefromBritishmusic.aspx [Accessed 12 May 2014