Music Ð"±Ndustry

MUSIC INDUSTRY

We can determine music industry as; “The industry which produce, market, distribute, sell music in”. The music industry can be classified in two categories according to case: Traditional and New Business Model. But traditional model is preferred less than new business model in last years especially. Therefore; we can say music industry want to transit to new model completely. There are some advantages and disadvantages for that.

Music Industry

Traditioanal Model

In the traditional model cassettes and cds are used to promote and distribute music by record labels.

New Business Model

Internet is key component of the new business model. Musicians can produce and market their music easily and less costly. This facilitates time and money saving. Low cost entry and easily communication provides to market and reach more consumers. The consumers can communicate other music lovers. They search about musician, music and share ideas. Not only ideas but music can be shared by internet. So, we can say one function of internet is “sharing”. In addition of that, the consumers purchase music which they like on the internet. There is no time or location restriction for them by this way. So, this facilitates buying process for the consumers. “Purchasing” is other function of new business model. Another one is “download”. This motivates the music lovers. Most of customers buy music after listened on the internet.

The case is about how the music industry is affected by internet. The main problems of the industry are copyrights, the use of internet, earning share of the artist.

Earnings share of the artist

In traditional business model; the value chain is consuming very much time and money. Because every stage (A&R Development, Recording, Manufacturing, Marketing, Distribution and Retailing) links to each other and requires to pass from one to another. So, this increases costs and the artists gain less. Each stage takes share from the artists’ revenue. Distribution and the marketing are getting the most share in the value chain. An artist can hardly earn $1 on average after the sale of a $16 cd. On the other hand, promotion is an important tool for musicians to compete in music industry. This can not be made easily in traditional model. There are six major players. And, these players dominate in the industry. They control on distribution and marketing channels largely.

Copyrights

Music piracy is the major big problem. In the traditional business model music industry had been struggling with the music piracy for so long. Customers were trying to find new ways against the overpriced music and limited sources. This problem is tried to be solved all around the world. But this traditional business model can not produce new technological methods. Because dominant players have resistance to new digital developments and they are lack of motivation and desire.

The use of internet

Use of internet has positive effects and also negative effects. Internet increased the availability of music products. Internet changed distribution systems for music. These new distribution systems have some new formats such as MP3. Consumers are enjoying the format of mp3. By mp3, you are downloading music file into your personal computer freely or cheaper. By the way, protection of intellectual property rights and control of them is too hard. Also, this caused to increase piracy of copyright. This damages the industry and discourages musicians. Increasing legal restrictions can not be accepted as a certain and good solution because it decreases the balance between consumers and musicians. Internet decreased the cost of entry to the market and increased communication of a huge market of potential consumers that decreased the need for record labels so even artists could able to produce and market their own music that is a problem of record labels.

COMPETITORS and BUYERS in MUSIC INDUSTRY

Of course; there are two sides of music industry as each industry: Buyers and sellers. Buyers who are music lovers and sellers who are main competitors to produce, market, sell music. And we can see musicians as a part of sellers.

Buyers are interested in music. They can be young or old, women or men, rich or poor according to case. Just they like listening to music. They purchase music which they want to listen. According to the survey %80 of the consumers would like to buy music after they have immediate information about the artist and the title of the song. If the consumers are able to buy as soon as they hear the music, the %60 percent of them would like to purchase more music. After hearing the music online one third of the consumers are likely to purchase cds in stores. Most of the buyers are using internet to reach music. Young buyers prefer to download mp3 from internet and to listen the mp3 on a portable player. Most of the mp3 format is shared between consumers. Some of the buyers prefer to buy cds and cassettes from the stores or from the internet via mail. Some of the consumers do not buy music products; they just use TV and radio channels to listen music.

But internet provides music with less cost or no cost. Therefore; some of buyers do not want to pay any money for it. This attitude of buyers discourages both of the industry and musicians. New music can not be produced, musicians, companies, recorders can not earn from the industry. But some of them pay, although they have chance to download. This is a motivation tool for industry.

Players In The Music Industry

There are dominant players in the case for music industry. These players are responsible for distribution of music to buyers.

Sony Corporation

Sony is one of the most important music companies in the world. We can give it as an example of traditional record label. Sony is a comprehensive company that the range of its products varies. Sony operates in the music, motion pictures, tv production, computer entertainment operations, audiovisual electronics.

Sony is successful in the music industry because it contains all the elements to produce