Music Industry Essay Example

Table of contents

Over the past couple of century’s music has been a form of art and cultural activity; in the 21st century, the demand for consuming music as part of daily life has created a billion-dollar global music industry. The creation of advanced technology and the introduction of the Internet have evolved the industry radically into a digital streaming revolution. This phenomenon is no longer limiting musicians to send music by mail to DJs, radio stations, or music labels; instead, musicians are connecting with a broader audience by promoting music on other platforms. These platforms allow established artists to release new music quicker and upcoming artists to self-publish in order to get recognized by music industry management. Nevertheless, artists have the opportunity to transform the landscape of music by uploading music to digital platforms such as SoundCloud, Itunes, Spotify, Youtube, Vimeo, Tidal, and so much more. The possibilities for accessing music are endless. In general, technological changes influence the quality of music and shake the consolidation of the music industry to a direct-to-fan marketing approach by creating a medium that allowed music to be available to the masses. The era of streaming music transitions into free, ad-supported, and paid subscription services that offer unlimited instant access to music libraries on any device. The digital age of music radically centers on a new dynamic of communication with the interaction of fans to creators, growth in sales, record-breaking promotional tactics, and access to new developments in technology. In order to transition to the future, the world needs to understand the history behind the music industry moving into a mass-market approach with streaming services that prompt a new era of controversy and success.

The Evolution of the Music Industry

The development of the music industry and marketing are intertwined when people gained access to listen to music without necessarily being present for the live performance. The music industry transformed music from a service to a product into a business. Music, mainly produced by record labels, is recorded in a specific format, produced, distributed, and sold to the world. Although, music was associated with cultural and dance ritual events; the 18th century established the simple processes of the music industry by composing and printing music. In the 19th century, music was still promoted on sheets. In 1925, the United States tested electronic recording and Columbia and Victor conducted the first records. As of 2004, the major three record companies are Sony, Universal Music Group, and Warner Brothers. Demand and consumption brought by strong technological as well as scientific innovation serve as the emergence of mass media to distribute products. Marketing emphasizes the importance of a brand, recognizing the needs of the customers, and locating resources to satisfy customers. According to the first step in marketing music from the beginning has tried through their released recordings to satisfy the tastes and wishes of listeners. The music slowly evolved from the commodity of vinyl, cassettes, CD’s, and now downloadable content. The consumer presents all of the data and latest music on an electronic device with one click. Music on the Internet all started with file formats of the MP3, which “is compressing a sound arrangement into a very small file, to enable digital storage and transmission” (Wiener, 2017). The first audio file format prompted digital transfer and mass consumption of music. Napster was a free peer-to-peer file sharing service online but the first multi-billion dollar digital music service was through Apple products known as iTunes in 2003. Pandora pioneered personalized online streaming music approach by creating algorithmic technology to figure out with likes which artists you might enjoy. Now, the digital revolution has many established streaming music options. However, the dominating companies of the digital sphere of music are Spottily and Apple Music.

The Rise of Streaming

The digital revolution has shifted music consumption patterns from albums to playlists. Streaming focuses on the audience wants with a wide selection of non-stop music. “Digital music providers use human curation, artificial intelligence and machine learning to organize their massive libraries of available music in intuitive and compelling ways, giving consumers the ability to quickly and easily find music they already love and discover new music that personally resonates” (Digital Media Association, 2018). According to Jesse Kirshbaum (2018), music is being created and consumed at a higher rate than ever before and streaming has more than 140 million active users and more than 50 million paying subscribers. In 2018, Spottily has solidified its dominance and set the future of music. Originally based in Sweden, Spotify offers all unlimited tracks at one monthly price. The future of Spotify is a big step in marketing music. The company is predicted to be worth around 25 billion dollars and has more than 140 million active users (Parsons, 2018). Spotify has mass appeal for accurate engagement targeting and marketing to millennials.

YouTube, which has been around for ten years, creates a ubiquitous presence online of revamping the way companies use social media marketing to advertise their products and interact with users. The platform allows recording labels as well as artists to post content whether the content is music videos, lyric videos, or personal interaction videos (tour, live videos, etc). According to the RIAA’s 2014 sales figures, “streaming and digital downloads made up the lion’s share of total music revenues, while CD sales continued to slump year over year” (Tun, 2018). These services, especially Spotify, lead consumers to more discovery of highly valued music by lowering repeat listening and raising new music. Even though streaming music is free to access for users, platforms like Youtube and Spotify create critical concerns for the music industry due to piracy and how to adequately monetize streaming in order for the music industry to receive adequate compensation.

The Advantages and Disadvantages of Digital Content

The act of protecting digital content in the music industry from unauthorized distribution is a big concern for online music. The industry is reluctant to set a new distribution channel due to fear of losing sales because of online streaming services, which bypasses record companies, and piracy. Piracy is known as an unauthorized user copying and distributing copies of someone’s work of art without the knowledge of the artist, composer, or recording company. Therefore, the development of secure digital music by reliable and effective technology is unsuccessful due to the music being on the public Internet. However, a research study by Pew Research Center assesses how artists and musicians use the Internet. The study concluded, “American artists have embraced the Internet as a creative and inspiration-enhancing workspace to collaborate, communicate, and promote their work”(Madden, 2004). In addition, two-thirds of the respondents declared that the Internet has a big impact on improving the ability to market music and reach fans.

The division comes from concern about copyright laws in which 64 percent of all artists think that the copyright owner should have complete ownership over their work. The current law specifies that the copyright for a specific piece of work last for the length of the artist’s lifetime plus 70 years. However, a majority of the artists say purveyors of art are protected more under copyright regulations than the original creators. The most intriguing part of the article was that these artists claim that downloading music has not changed the amount of money spent on concerts, CDs, etc. Like many individuals, half of these artists said they could not always tell if music downloaded from the Internet was legal or illegal (Madden, 2004). Technology and social networking create a whole new marketing mix and communication channel for the music industry. Now, the music industry needs to learn how to use new channels in marketing such as the web, mobile, and Internet TV. A digital mindset applies the same principles of targeting and the significance of value; however, the digital environment increases customer satisfaction due to the difficulty of differentiating from competitors (Maattanen, 2015). Engagement adds a new element to the marketing mix because artists need to deliver relevant content that is interesting for consumers. The product is in digital format; the price becomes lowered for compensation along with one-price subscriptions, and promotion techniques on social media to increase growth.

Music on a Larger Scale

Overall, music-streaming services establish a marketing strategy that uses mass distribution and mass media. The goal is to market to as many people as possible across all demographics. For instance, digital is the growing popularity of more diverse genres and artists in the music industry. Without using mass marketing and digital services, Despacito would never reach one billion views in just 97 days and Chance the Rapper would never be the first ‘streaming-only’ artist to capture the Grammy for both Best Rap Album and Best New Artist. Music is offered on a mass-scale that is easily accessible anywhere at any time. People spend way more time on a smartphone, tablet, or computer which means offline marketing is transitioning to be ineffective (Digital Media Association, 2018).

The Future of the Music Industry

The key concepts in the future of the music industry are the desire for creativity as well as succession and entrepreneurial aspects. With access to streaming services, the music industry will continue to boom for years to come with strong opportunities utilizing data and new product innovation. YouTube will learn to better understand consumer’s tastes and real-time data on video posts. Revenues will go back to rights holders and shifting the music industry back to the beginning of ownership. New bundles will occur every year such as with Spotify and Hulu. Smartphones will play a crucial role where technology sensors of location and activities such as running ignite a new world of activating music to these sensors. Therefore, music platforms can know and play specific playlists. Nonetheless, Spotify is in the process of launching EchoNest and wealth of data analytics can create a customization to play music based on whether we are excited, stressed, etc (Dredge, 2015). Consumers now have the ability to access new tools to interact and have fun with music. The future is on the horizon and music is going beyond the play button. Data Analytics will better serve artists and the audience. Artists, management, and record companies will have a greater understanding of who is listening to a particular artist’s music, who is engaging with the artist on different social media platforms, and how to better serve their audience (Paakkonen, 2017). Engagement will go to a whole other extreme with new systems allowing detailed, timely information that evaluate marketing success.

Streaming connects consumers to creators. The next frontier for digital music content is to leverage opportunities for home and car. The smartphone has already been achieved through apps, the Internet, and other platforms. Consumers need new experiences with music; therefore new smart speaker technology or in-car infotainment. These new ideas will fuel the growth for music consumption and add to music on the go.


Music has a global impact with fans that resonate with a life story, relationships, and mood. In 2018, music has landed in a new realm of digital media with new advances and software. Therefore, consumers can interact and experience music on a whole new level. Steaming platforms have increased exposure to new and old artists through online. Consumers are gaining new listening habits, greater transiency, unlimited music with subscriptions, and so much more. However, streaming does have some downfalls such as decreasing artists’ revenues and piracy. The music market can only improve and get better with time. Technology is continuously evolving and new innovations are an inmate to fuel an exciting future for the digital world.

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