Impact of Internet on the Music Industry

• Introduction

Internet has been supportive to businesses in various ways since its introduction after the invention of computers. The introduction of computers and the internet technology has contributed to various changes in the global market for music and specifically to the music industry. Technology has shaped the world of technology in a way that people have increasingly taken entertainment and technology as part of their life. Other than being a source of leisure and entertainment, the music industry has been a major source of income and has contributed much on the global economy. The internet contributes much to the development of the music industry but there are many problems facing the music industry today. This paper is based on a research on the impact of the internet on the music industry.

Many artists in the music industry have increased their popularity and profitability due to increased internet applications that assist them in their creativity, online marketing, as well as using the internet as a storage media for most of their music file. These artists are also assisted by internet in the way they budget their income given that a significant percentage of music artists are not adequately educated by rely on their magnificent talents (Harper, 2012). The industry is an industry created through a combination of various creativity talents and an insignificant aspect of education. Financial skills in the music industry is of importance since budgeting and planning for one’s wealth may not be adequate without a significant aspect of education. It is through an element of education that the internet can benefit the various artists in the music industry today as they make use of the underutilized internet resources (Harper, 2012).

Internet as one of the latest technologies in the music industry has some impacts on the industry through various contributions such as online music sale, online shopping, idea generation through social networks, as well the use of internet as a storage media of music file (Harper, 2012). The internet also offers a wide choice on internet or online transactions. Internet evolution has taken shape within a short period that is estimated to be less than a decade. The internet is itself a massive investment but has been taken as one of the key constituents of all businesses and more by the music industry. Music investors use the internet to communicate with music consumers via social media networks such as twitter, Facebook, and LinkedIn among others (Harper, 2012).

Today it has become easy to copy music from the internet without having to pay for it. This aspect of internet technology makes it easier for music consumers to gain from the music industry at the expense of the producers. The harm in this case is that the potentiality of the music industry is hardly maximized to the illegal transactions and benefits that would not have been present if it were not for the internet technology. The internet makes the distribution of music easy in which producers on the other end benefit by incurring little or no cost in the distribution of music files (Leurdijk & Nieuwenhuis, 2012).

Besides the loses and profitability that the internet contributes to music producers and consumers as well as other players in the music industry, the internet has increasingly contributed to barriers of entry into the industry. The main effect in this case is that internet technologies in the music industry is the destabilization of the supply chain in music sales by posing challenges to the pre-web role as well as decreasing the domination of the supply chain in the music industry. Internet technologies have also contributed to changes in the entry barriers that are primary in the industry. This change in barriers of entry has come about as a result of exploitation of music artists’ ownership of their production copyrights through their accessibility over the internet (Lewis, Graham, & Hardaker, 2005). The internet has made it difficult to protect the originality of music as well as an artist’s copyright in the use of certain creativities in music.

The value of music has therefore decreased significantly due to lack of protection as the internet gives access to everything at no cost or just for the exchange of the internet access requirements such as data bundles or internet credit. While this is the case, the industry keep to grow but its growth is not to the required potential since efforts have not been put in place to fight against any of the many internet crimes as far as music is concerned. Artists are increasing their profitability in a way that covers the billions of money lost due to the increased access of music through online sources (Lewis, Graham, & Hardaker, 2005). One factor that boosts music producers despite the many illegal transactions that tent to diminish the industry’s potential is social media marketing. Music producers understand that the only way they can survive and prosper in the market for their music products is by gaining fame. To gain fame, the internet becomes an important tool that every musician is targeting today. The cost of social media network usage is to minimal that it is claimed to be an underutilized resource. Musicians have faced enough threat from practices that deteriorate the right of protection on one’s creativity.

Copyright is mainly applied to recorded music. This kind of protection acts as a security for one’s ownership of creative work and maintains its originality and denial of free access and use without the consent of the producer or the owner (Lewis, Graham, & Hardaker, 2005). The owner may not always be the producer since the artist may be hired or he could sell the right of ownership to another subject dealing in the industry. The right of ownership in music is expressed to the composer and lyrics and the major parts of any music. Another artist or musician without the aurization of the ownr can hardly use the composer or lyrics of a given music creativity (Lewis, Graham, & Hardaker, 2005). Copyright ensures that the rewards of the music writer are provided adequately and to the maximum level possible. This compensation is however doomed by the availability of internet resources that make it easy to enjoy another person’s creativity at no cost at all.

Contractual transactions on the other hand have the rights in the music industry assigned to various market intermediaries as a way of evading risk of losses by producers. In an oligopolistic industry structure, the various contractual terms comes as a reflection of the bargaining power of the players within the industry. About five companies today appropriate the intellectual property right to creative works and music records accounts for about 80 per cent of all global music sales and the property rights. This implies that the rights are not taken into consideration accordingly. Five companies working to promote the idea of Intellectual Property Rights include the EMI in the United Kingdom, the Bertelsmann in Germany, the, Warner Company in the United States of America, Sony in Japan, and the Universal Company in France (Lewis, Graham, & Hardaker, 2005). In order to maximize their operations and profitability, these companies employ various financial and marketing strategies. An instance is a merging strategy planned between Warner with EMI, and the strategy failed when the merging was called off by the fall of October 2000. The failure was caused by an intervention by the then European Commission. On another aspect, Sony, the Japanese company merged with the Bertelsmann Company of Germany. The merging in this case involved only the non-Japanese music operations with the German Company. At the same time, Time Warner Music Company was forced by circumstances to sell its business to a private group. These business changes are all because of increased technologies in the internet and computer industry rendering the music industry less productive and full of great unfair practices.

• Research Questions

1. How does free music downloading affect the music industry growth?
2. Does internet technology contribute to the growth of the music industry?
   • Research objective

The research aims to find out how free music downloading affects the music industry growth and whether internet technology contributes to the growth of the industry.

• Background of the Music Industry and technological Change

For many centuries, the music industry has prevailed in various ways. Music used to be performed by musicians in traditional setting and practices, as well as music styles like fork music. During the olden days, music was performed main for a purpose but not entirely as a form of entertainment. The traditional music industry was not constructed with an idea of financial benefits but based on various reasons including praises for kings and significant people in the society. Music was also created as a way of worshiping God or gods. The fall of 19^th century saw music industry take a new shape as far as financial benefit is concerned (Harper, 2012). This century was also the beginning of modern error. It is during the same century that industrial technologies and work process began shaping the market of music making music grow from live performance by an individual to the music industry (Harper, 2012). The industry began as a small industry in which case people could produce songs by themselves and distribute as an individual or as a small group of musicians. Today the music industry controls the production and sale of music files by individuals. The industry has grown in power to a point of dictating the production and sale of music within the market of music. The issue of internet is however reconstructing this aspect making even consumers to access music and share it without significant restrictions (Harper, 2012). These practices make the cost of production in the industry high and sometimes too elevated to create barriers of entry into the industry by new music producers (Leurdijk & Nieuwenhuis, 2012).

A reference back to the 19^th century shows the transformation of music in a thorough way due to the introduction of music recording technologies. The recording technologies can as a result of new inventions such as the gramophone. Its introduction to the market and music industry by Columbia, Edison, and Victor marked the highest stride in the music industry. Now, music was changing from printed sheets to recorded music. Little did people know that this was not the end of technology and that new and more improvised methods of music storage and distribution were yet to come along. The world of music was changing swiftly as technology was being advance in all scope. Later in the 20^th century, computers were yet another way of shaping the music industry. The introduction of computers in the late 20^th century made the industry grow even wider (Harper, 2012).

New technologies were accompanied by various marketing strategies in the sense that the sale of music was being believed to be captivated through free music sample that would certainly turn to music hits. Computers made it easy for people to copy and reproduce original music file by buyers would then evade the cost of purchasing the music products or the same buyers would resale these music products. This increased the supply of music making it hard for some artists to recover their initial costs of production from the sale of music recordings. Computers on the other hand have advanced to give way to the internet technology, which is the largest promoter of the music industry as well as the greatest enemy to music artists. The internet made it easier for people to down music lyrics and files in all computer formats at no additional costs rather than the cost of accessing internet, which is increasingly reducing. As competition takes a higher notch in the music industry, musicians market themselves by uploading their latest music files in which case anybody with internet access can download the music files without any significant complication. The internet has grown from simple form to a complex asset whereby businesses and individuals store their most valuable documentations and recordings. The music industry has adopted the same in which case music files are largely stored on the internet. Internet crime has however increased rendering and form of protection almost useless since internet hackers are able to access critical files and distribute them freely over other websites

• The Music Industry and General Characteristics Economically

The main actors in the music industry include music writers, live performers, music recorders, music sellers or distributors, and music consumers. In the music industry, there is a distinction among all the music players. Each one of the music players has to benefit from music production and sale accordingly but the benefits on some players are doomed by the increased use of internet technologies. The music writer has to benefit from his or her creativity, the live performer would benefit by exposing his o her talent in singing and dancing, while music sellers and distributors benefits from the profit margins in every music file they sell to the final consumers. Consumers on the other hand gain their benefits by listening and watching music as a form of entertainment. The effect of internet in this case could be felt when one of the players in the market is oppressed by the illegal acquisition of music products through the wrong channel. Free downloading of music may not be termed as illegal but a practice that increases consumers’ benefits and decreases the profitability of the producers as well as other players in the distribution channel for music. Each of the cases of the music industry players therefore has a specific capacity of generating revenue and the progress of the industry.

A single individual can perform most of the economic and creative activities but specialization is usually required in order to improve performance and ensure that more people participate in the industry. Specialization also leads to innovations and in each position of the various players, there specific qualifications or requirements without which the industry may not have grown to what it is today. In the distribution aspect of the industry, marketing and economic skills are required as well as management skills. In a situation whereby a person has to perform all the activities, he or she would have to write the music, act as the live performer, record his or her own music, and then distribute. The music, for the case of artists, the distribution and marketing efforts may not be as beneficial to them as spending more time in creating new works and perhaps do some live performances. The internet offers an aid to most of these activities in which case the writer of music can maximize the benefits of his or her creativity.

• Methodology

This section is based on the various ways of obtaining the information and data needed for the research. It shows how the methods used to obtain information are effects and why they were used in collecting, information while other methods were not used (Crossman, 2013). The section also provides the data collected and arranges the data in a way that would ease the research analysis. The research uses mainly secondary data in providing answer to how the internet affects the music industry. The data is not on a specific region but from a wide scope from which comparison would be made to establish the main effect of the music industry by internet.

• Data Collection

The data in this research is mainly obtained from secondary sources. Secondary data sources are wide and include various books and publications, journal articles, as well as the internet. The internet provides a variety of sources especially considering that every aspect of information that is important and exist in this world is available on the internet. The internet offers free access to most of these materials just like the case being discussed in the paper. Secondary data therefore means the data collected from a previously collected data by another researcher or data collected from existing information as provided by another person. Secondary data is usually cheaper and saves time from its characteristic of ensuring ready and quick access. The secondary data is advantageous in that it is economical form its aspect of saving expenses (Crossman, 2013).

This kind of data is usually time-saving since the researcher would only need to access the various works written by earlier researchers and start his or her research activity. In case the researcher wish to collect some primary data, secondary data would have made the primary data collection easier since secondary data, helps to show deficiencies in the data collected for a clearer analysis (Crossman, 2013). This can be seen in this topic where personal experience in the music industry and how the internet helps consumers evade various cost in music consumption due to the availability of free downloads from the internet. In the case of primary data collection, it would not be possible to collect information.............