The New Music Industry

It’s a really good example of how advances in IT can completely change an industry. It might be one of the best examples. It has microeconomic and employment implications within the industry itself and broader effects in how consumers ultimately use the new technologies available to them. So let’s do a case study of sorts using the music industry. And I think most people should be able to relate to this in one way or another.

The groundwork for the massive change within the music industry probably started when Napster first allowed people to download free music from the internet. If anyone doesn’t remember what happened with Napster, read here:

http://www.theguardian.com/music/2013/feb/24/napster-music-free-file-sharing

A few years later, Apple introduced the iPod, made some deals and got some licenses from the record labels, and now users have easy access to cheap music online. After Napster, it was inevitable. Now there are plenty of options for people to get music online.

So before the digital music era, everyone who wanted to get the music they wanted had to go to a store and do something like this: 

(source:  http://phatbootyent.com)

Now all you need to do is go on the interweb and search for whatever music you’d like to hear, and it will most likely be readily available to you. And it offers consumers a much broader and easier access to listen to new music. This in effect creates greater competition between the musicians themselves and decreases the barriers of entry for new musicians. A Rolling Stone article has Amanda Palmer, former singer and keyboardist of the Dresden Dolls, use the term “working-class musician” to describe the new environment of the music industry. You can read that article here: http://www.rollingstone.com/music/news/survival-of-the-fittest-in-the-new-music-industry-20121108

Of course the record companies themselves were the biggest losers. You could argue artists may have been negatively impacted from losing the revenue from record sales, but like the Rolling Stone article says, record sales were never a huge factor in the artist’s incomes. If anything, social media has now provided musicians with a greater benefit than what they previously would have gained in physical record sales. The biggest winners in this new market are of course the consumers. And someone has to design, build, and maintain all of the IT systems involved in making this digital market work, so new jobs were created outside of the music industry.

So is the music industry better off because of the new digital environment? I guess it depends how you look at it. Either way, it definitely has changed. And like the saying goes, it isn’t the strongest or smartest that survive, it is those most adaptable to change.