Music group

Music Past

Music Present 

Music Future

 

 

THE FUTURE OF MUSIC INDUSTRY ALBUM SALES WILL RELY ON SURPRISING AND DELIGHTING CONSUMERS.

 

The music industry business model has trained consumers to the tune of free which has made it hard and almost impossible to introduce a new “pay for” model. The music industry is turning to new ways to reach consumers. Music artist Beyoncé had success in trying a new approach when she recently released her new album exclusively on iTunes. In short, Beyoncé found new ways to surprise and delight her consumers, offer value, and they paid.

 

“Beyoncé created an album on which a music video, replete with footage from old home movies, accompanies each song, appealing to the fan who wants more than just a hit song — they want an album experience.”

 

                                                                                

 

Beyoncé waited to release her album, building the customers want for the album, even during her tour, and then she casually

released the album off-cycle using social media as her marketing plan. People stormed to buy the album. The call to action was “don’t be left out. “Beyoncé turned Twitter and Facebook into one massive word-of-mouth campaign”, it created a river of sales leads and recommendations. She used society’s social desires to be “in-the-know” and “the one you heard from first” as a springboard for others to get the album immediately.

 

Music industry album sales can expect to see the infusion of value and creative marketing in the future.

 

 

HOW THE BUSINESS MODEL IS CHANGING 

 

Considering the uncertainty of the industry’s future brings about many concerns for the business model moving forward. A variety of things have caused rapid changes in the market.  With the Internet providing various forms of entertainment, such as streaming/downloading music, as well as movies, games, etc. the music industry is now pressured to compete for their audiences commitment.

 

For the most part, the music industry has shown little interest in their willingness to compete for new manners such as licensing new services, like Spotify. Because the industry is leisurely approaching the future, it leaves little possibility for survival. But people will never stop requesting music. Oligopolies will need to approach these numerous innovative startups to prevent audiences from loosing interest in legal services.

 

WHAT'S BEING DONE ABOUT IT 

*from present section* How artists are rebuilding their revenue to prevent crashing and burning.

 

According to Mike Masnick, the founder and CEO of Floor64 and editor of the Techdirt blog, the music industry has come up with a new business model for the future. This model is as states..

 

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model

 

This business model expresses an artists interest in connecting with their fans to find out what they are looking for, and then giving them something they want available for purchase they will make money. This model has been proven to work, here are just a few examples.

 

 

                             

 

Trent Reznor, of the band Nine Inch Nails, has become a huge supporter of this business model. He came to the understanding that his music would end up on file sharing site anyways. So what did he do? He put it online for free. But what Reznor does afterwards is how he makes his money. He adds options for his fans that make them want to buy his albums. For example, with the release of the album Ghosts I-IV, he allowed fans to buy a two disc CD, for just $10. Also, there was a Deluxe Edition Package, for $75, which contained a box set around a single album, a DVD, a Blu-ray and a photobook of images. He also added an interesting option for $300 which was the Ultra-Deluxe Limited Edition Package, which was limited to just 2,500 copies available. This option included the box set, high quality vinyl’s, and some beautiful giclée print images. Most importantly though is that of these copies were signed by Reznor himself. In just 30 hours, all 2,500 copies sold out, which brought in $750,000 in just over a day and $1.6 million in the first week. All off of music that he gave away for free.

 

By offering additional packages including exclusive items that users who are streaming for free do not have access to, artists are able to avoid the fear of loosing profit as the digital age approaches.  

 

Another example is Josh Freese, who is a session drummer based in Los Angeles. Freese has appeared on well over 100 albums, but he lacked a solo career. When Freese decided to release his first solo album, he decided to follow the same business model that Reznor used. There were cheap options available, but for $50, you could get a personal 5 minute "thank you" phone call from Freese, where he said you could ask him anything you wanted. For $250, you could get lunch with Freese. There was also a $500 chance to get dinner with him at Sizzler. Freese was a unique person, so he made the options for his fans just as unique as he was. For $2,500 (limit of 5 available), he would provide a drum lesson, where you'd get to keep one of Freese's snare drums, visit the Hollywood Wax Museum with Josh and one of a rotating list of his rockstar friends and finally, you'd get to take and keep any three items from Josh's closet. For $10,000, you could have dinner with Josh and a rockstar friend, before hanging out at Disneyland with Josh. And at the end of the day, you would get to keep Josh's Volvo station wagon. Finally there was a $20,000 and $75,000 options available, which included many options such as having Josh join your band or be your personal assistant for a few weeks. You'd get to go on tour with Josh and he would also write and record a five-song EP about you. By giving his fans something they wanted, Freese was able to make money using this business model.

 

 

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PROSUMERISM

 

 

Even in the absence of licensing or copyright enforcement, plenty of musicians today are leading their role in the business, threatening professions within the industry, specifically, recording labels. Trent Reznor of Nine Inch Nails is a great example of a prosumer. He is eliminating the need for a label by directly controlling the activies that would otherwise be coordinated by management. The introduction of new innovative technologies, such as social media, can be used to musician's benefits. They are now able to govern the distribution of their music by advertising via Twitter, Facebook, etc. 

 

Digital tracking can now log who is listening to what music and where. When measured, artist's are able to use digital tracking to figure out where they are most popular and synchronize that with where to tour. 

 

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LEGAL VS ILLEGAL

 

PIRACY AND STREAMING MUSIC

 

There is no doubt that the music industry once suffered a massive decline due the extreme amount of people illegally downloading music using bitTorrent or LimeWire. But due to new access to legal methods of obtaining music, such as Pandora or Spotify, piracy is continuing to decrease.

 

Piracy is unauthorized downloading or file sharing, otherwise considered stealing, content from the Internet, which causes industries a decline of billions of dollars each year. Music is the most commonly pirated element from the Internet.

 

The future of music piracy is expected to generate concern for copyright laws, fair consumer use, privacy, and many facets, even artists themselves. It is probable that we will see many shifts in restrictions among the legalities of streaming music online.

 

According to the IFPI report, there are currently about 20 million paying subscribers to music streaming services worldwide, and the dollars they generate account for about 10% of all digital music revenue. That’s still a small sum compared to digital downloads, which topped 4.5 billion total units last year, amounting to more than two thirds of total digital revenue.

 

 

Although iTunes has acquired assorted competition, it is predictable that digital sales

from various streaming sources will continue to increase in the coming years.    

 

 

HOW TO PREVENT REVENUE FROM FALLING IN THE FUTURE

 

As streaming is becoming more and more popular, it will be vital that legal streaming services continue to request payment from consumers and offer paying customers special features and other benefits to avoid revenue from falling once again. Spotify converts 20% of their free users to paying subscribers each year.

 

For example, Pandora used a 40-hour limit on free mobile listening to convert frequent free listeners to premium subscribers.

 

 

By offereing access to higher quality sound and special features such as no advertising, a heavy Internet radio user is more inclined to become a monthly subscriber. 

 

There are now 500 or more different legal online music services worldwide, why not take advantage of them?

 

Which will you choose?

 

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INNOVATIONS IN TECHNOLOGY OFFER EVOLUTIONARY CHANGE FOR MUSIC INDUSTRY

 

          

 

Pink Floyd band member, Nick Mason, previously rejected the evolution of technology in the media industry. He resisted making their music available in digital form. In 2013, the band decided to accept streaming services as the reality of the industry as the future approaches. As it turns out, offering their music digitally through Spotify and iTunes, turned the band a high profit within the first year. “Spotify for us was a success,” Mason said. “A lot of people have been streaming our music, and importantly also a lot of people who weren’t yet familiar with our music… now it’s becoming clear that streaming is not another form of piracy, and you can argue that more music is being listened to now than…in the past.”

 

On the contrary, Pink Floyd has taken legal actions to fight Pandora for "robbing" artists of 85% of their money. Specifically, the band is mad that Pandora is promoting a law that would reduce the amount of royalties it has to pay whenever it plays a song. Pandora pays higher royalty rates than competing radio services because they’re required to pay both the songwriters and the performing musicians. Will the trend that is Pandora last? Both sides make a sober point.

 

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STREAMING LIVE CONCERTS

 

 

 

Something you can expect to see more of in the future from the music industry is the streaming of live concerts.  This will be a futuristic way for artists to connect with their fans, promote albums, advertise merchandise, and get real-time feedback from consumers.  Artist will be able to hang out with fans in real-time, earn money from ticket sales, and get paid right after the show. Artist and record labels have tinkered with the idea of full show broadcast for years. Barriers that gotten in the way of live concert streaming fully taking off have been securing rights to performances, whether the artist is signed to a record label or playing a cover version of a song owned by an outside publisher. Live streaming of concerts can be somewhat cost-prohibitive. "There are often union fees, bandwidth is actually a sizable hurdle, and you also have promoters who aren't into it -- they think it'll affect ticket sales." Afterall, this is where the moneys at. 

 

"There's clearly an open lane. No one has cracked the code to being the destination for consumers for live music in the digital space. Everyone's toying with it at this point,"

 

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FROM PHYSICAL TO DIGITAL

 

As you can see from the chart below, wholesale revenue has shifted from recorded music to live performances. Physical music is diminishing because of the up rise within the digitalization era. Digital music has become available with the click of a button and its’ easy access directly contributes to its’ increasing popularity. Note that publishing music is not having a negative effect in the industry; it is not making prominent progress for the industry either. While Internet radio services, like Pandora, are steadily increasing, live concerts have skyrocketed because of their intense, religious-like experiences. 

 

 

 

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THE FUTURE SOUND OF THE MUSIC INDUSTRY

 

The sound of music is evolving with the concepts and implementation of various musical instruments. The limits of human innovation are being pushed to take the sound of music to the next level. This section will showcase Instruments that can be expected to be seen in the future.

 

                                                 

Link to videos of these future instruments in action. 

http://weburbanist.com/2009/11/17/the-future-sounds-like-this-10-magnificently-modern-musical-instruments/

 

 

FUTURISTIC SOUNDS

 

 

 

 

start at 1:20 

 

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 Past                        Present                    Future  

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Citations

 

Stoute, Steve. "The Future of the Music Business: Farewell to Free (UPDATED)." World's Largest Professional Network. Linked In, 17 Dec. 2013. Web. 16 Feb. 2014.

N.d. Photograph. www.metalinsider.net. Metal Insider, 12 Feb. 2014. Web. 16 Feb. 2014.

N.d. Photograph. www.mydaily.co.uk. My Daily, 17 Jan. 2014. Web. 16 Feb. 2014.

Knopper, Steve. "Why Live Concert Streaming Has Yet To Take Off." Billboard. Billboard-biz Beta, 21 Feb. 2014. Web. 07 Mar. 2014.

"Play a Live Show Into Your Laptop." Watch Live Concerts from Your Couch. N.p., n.d. Web. 07 Mar. 2014.

N.d. Photograph. L.A. TIMES MUSIC BLOG. - Latimes.com. Las Angeles Times, 09 Dec. 2009. Web. 07 Mar. 2014.

Bell, Killian. N.d. Photograph. Cult of Mac. Cult Of Mac, 08 Feb. 2012. Web. 07 Mar. 2014.

N.d. Photograph. Making the DRAWDIO. The Heads on Fire Community, 29 July 2009. Web. 03 Mar. 2014.

N.d. Photograph. TGC Productions : Hidden Stash (Skateboarding/Music/Lifestyle): March 2009. TGC Productions, 31 Mar. 2009. Web. 03 Mar. 2014.

N.d. Photograph. SUZANNE TRIBE MUSIC: HAPI DRUM!!! Music for Relaxation. Web. 03 Mar. 2014.

N.d. Photograph. The Future Of Things Science and Technology of Tomorrow. The Future Of Things, 28 Feb. 2008. Web. 03 Mar. 2014.

N.d. Photograph. Sonicstate. 10 June 2009. Web. 03 Mar. 2014.

N.d. Photograph. Keyboard Update. Web. 03 Mar. 2014.

HAPI Drum "Origin" Model, E-Minor Demo, Steel Tongue Drum. 2008.

 http://www.youtube.com/watch?v=L5J8OLTk12M

(Added by William Murray Jr)

 "Business & Money." Business Money Revenue Up Piracy Down Has the Music Industry Finally Turned a Corner Comments. N.p., n.d. Web. 07 Mar. 2014.

 "Streaming Is the Future, Says Pink Floyd Drummer." Tech Europe RSS. N.p., n.d. Web. 09 Mar. 2014.

 "Pink Floyd vs Pandora: What the Fight’s about (and Who’s Right) — Tech News and Analysis." Gigaom. N.p., n.d. Web. 09 Mar. 2014.

"The Future Of Music Business Models (And Those Who Are Already There)." Techdirt.N.p., n.d. Web. 11 Mar. 2014.

 "Music Notes Blog." Http://www.riaa.com. N.p., n.d. Web. 10 Mar. 2014.

"About Us." MELabel. N.p., n.d. Web. 11 Mar. 2014.

"Marketing Mistake: Pandora 40 Hour Limit Half Baked or Huge Opportunity?" Leader4hire. N.p., n.d. Web. 10 Mar. 2014.

Masnick, Mike. "The Future Of Music Business Models (And Those Who Are Already There)." Techdirt. N.p., 25 Jan. 2010. Web. 11 Mar. 2014. 

(Added by Jessica Ostley)