Internet Changed Music Industry’s Marketing
Conflicting stories flood the Internet regarding music sales. For every source or stock table showing declining music sales, there is another source showing a graph of increased music sales. CD music sales may be declining, but music revenue is increasing, bringing in bigger numbers going into record company’s banking accounts. No one is going to purchase the same thing they can get for free off the Internet. The Internet changed the music industry’s marketing strategies and plans for continued sales by expanding to a more sophisticated way of producing and selling music.
The record companies and record stores must change the format of selling and promoting music. “Getting radio airplay or selling CD’s in shops is no longer the only way for a recording artists to reach their fan base” (Taylor, 2007). Technology made music mobile, more accessible, cheaper and faster to music listening audiences. Who’s is going carry around a CD’s player with a case of CD’s when they can carry a miniature MP’3 player capable of holding the capacity of five CD’s? Internet, just like the radio, only plays a selected or released number of songs from each album.
Playing selected music videos or songs will encourage music fans to purchase the entire package. What is happening is to get the full video or CD with all songs is actually more expensive. Ipods run at least $300. 00 and up, Iphones nearly 1,000. 00 compared to 80. 00-100. 00 for high quality CD players ten years ago. Many of these items require a service agreement for downloads. The service agreements are usually a two year contract, with a $100. 00 rebate to purchase a brand new $1,000. 00 product in the next two years. The Internet has increased the employment and financial security of the music company’s CEO’s.
Record companies have to promote sales by making more tours if they are to stay in business. Madonna switched from Warner Brothers, to Live Nation, a company promotes and tours much more often. This did hurt Warner Music’s stocks. “Warner Music Group Stock, for example, is trading around $9. 00 down from about 25. 00 just six months ago” ( Sloan, 2007). Tours no doubt make much more money than CD sales, especially in bulk rates. Internet drastically changed recording company’s strategies and plans promotions for promoting music. If they want to keep acceptable profit margins, they must continuously keep up with changing times.
Free downloads through file sharing, opens chances for consumers to get ripped off. File sharing opens opportunities for armatures experimenting with their home recording studio to pass off music as though it is from a professional studio. It also allows impersonations of the recording artists. Many people complain about reality talent shows. “Music charts have lost credibility and reflect marketing power behind over hyped artists rather than the nation’s musical tastes” (Yahoo Music News). Consumers interested in music collections have to purchase new technology and service contracts.
However, music is much more convenient and portable and heard much more than it was 25 years ago. Internet allowed basic music to be heard or accessible. However, getting full length music albums of the artists has become more expensive. The future of music industry will more likely than not be touring and promoting more and more concerts. Cheaper methods of generating music revenue has became complimentary. Technology sales, service contracts and concerts are on the uprise.
Sloan, P. , Fortune Senior Writer, Why Record Labels Matter More than Ever; CNNMoney.com November 2, 2007 retrieved November 5, 2007 http://money. cnn. com/2007/11/02/magazines/fortune/matchbox. fortune/index. htm? section=money_latest Taylor, G. , Record Industry’s Survival in the Digital Age; Telegraph. co. uk October 23, 2007 retrieved November 5, 2007 http://www. telegraph. co. uk/money/main. jhtml? xml=/money/2007/10/22/bcnbpi122. xml Editorial, Pop charts ‘have lost credibility Yahoo Music News; Published; November 4, 2007 Retrieved November 5, 2007
