The Internet & The Decline of Physical Sales of Music

In February I handed in an essay on the decline of physical sales and the challenges and opportunities presented by the internet. I have decided to publish the essay as I believe that some of you might find it quite interesting. I got 82% for this assignment so I think it is worth sharing with you all, and hope you find it interesting.

According to IFPI’s website (The International Federation of the Phonographic Industry – who represent the music industry) physical sales statistics are at their lowest yet, with the percentage of money being made from physical sales (CD, Vinyl etc.) is at 51%, while digital sales (iTunes etc.) are at 39%, performance rights (broadcast, internet, radio and venues) at 7% and synchronisation revenues at 2% (TV advertisements, films and brand partnerships) [, 2015]. This is a 60% decline in physical sales since 2011.

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Above is a chart from the IFPI showing the digital revenue breakdown for 2008-2013. As you can see, the percentage of digital downloads have increased by only 3% from 2008 to 2013, whereas the percentage of subscriptions has increased by 13%, and ad-supported streaming has increased by 5%. We can see that the percentage of mobile access to music has decreased by 21% due to the increase of users subscribing and downloading music.

While these statistics show problems for today’s musicians, composers, producers and creative artists, there are some opportunities that are created by the internet. The fact that the public can purchase music at their fingers tips with a click of the mouse, and the internet is an engine for advertising for free, the use of social media is a tool that can be used for marketing and promotional purposes that will reach people from across the globe. Word of mouth is easily spread from one town, city, country to another and artists can pick and choose where they have their music bought from and how they would like their music to be heard. Taylor Swift has recently taken a stand against Spotify as she removed all of her music over the royalties that they pay to artists. She has been named by Hannah Ellis-Peterson of the Guardian (a UK news source) as “The most powerful 24-year-old in the music industry”.

Musicians, composers, producers and creative artists are able to create a network of fans and contacts from all around the world using social media, and online promotional material. Advertisements can be either self generated on social media (i.e. uploading a flyer or poster to Facebook, Twitter or Instagram) or you can pay a small fee and have automatic advertisements pop up at the side of web pages as people browse. Musicians who are undiscovered are able to upload their music to YouTube and SoundCloud to promote themselves with the hope that they are noticed by someone important within the industry.

This is like the pebble and the boulder idea in the book “We Think” by Charles Leadbeater; the pebbles being the musicians on YouTube getting their music watched by thousands of users. There are a large number of pebbles rising up, taking over the very large companies, referred to as ‘boulders’. “The scene would have resembled a large, sandy beach, with crowds organised around a few very large boulders. These boulders were the big media companies…Now imagine the scene on this same beach in five years time. A few very big boulders are still showing, but many have been drowned by a rising tide of pebbles. As you stand surveying the beach every minute hundreds of thousands of people come to drop their pebbles”. The author goes on to say that “Some of the pebbles they drop are very small: a blog post or a comment on YouTube”. You can see this every day on every social media platform, at least once a day you see people sharing videos of young undiscovered artists and performers, who are seen to be the next big thing, and these are the people who are uploading to YouTube, SoundCloud and other distributional engines.

Another example of how powerful the internet can be, is the “I love Bees” game highlighted in “We Think” by Charles Leadbeater. It is an account of an international online game which was started by a link to a website named “I love Bees” being flashed on screen at the end of an advertisement for the game ‘Halo’ at a cinema. The movie and gaming fans were so curious that they visited the website and discovered it was about an old lady who had gone missing. Co-ordinates would be sent through emails, mp3 files, blogs and websites to the participants of the game. A group of gamers named “The Beekeepers” had discovered that the co-ordinates led to places all over the world, and at each location there was a phone box. All phone boxes were attended to and thousands of people took part. “The 600,000 players of I Love Bees show that a mass of independent people, with different information, skills and outlooks, working together in the right way, can discover, analyse, co-ordinate, create and innovate together at scale without much by way of a traditional organisation.”(Leadbeater and Powell, 2009).  This shows that the internet is a huge tool for people to communicate, work together and come together as a community through their computer screens. If it is so easy to participate, collaborate and be creative in a game with someone at the other end of the world, then how easy is it for people to participate in the sharing, listening and distribution of music online? Every day you see people go viral on the internet, whether it is a video of them singing, a video of them making a statement or a video of someone doing a stunt. The power of the internet is never ending, and if you connect to the right people then you are sure to have your music shared thousands of times over, and eventually have yourself recognised within the industry.

This takes me on to my next point which is the fact that the internet can also present a series of problems for industry professionals. This is where Spotify comes in to conversation again, where musical content is available for free to consumers and money is generated from the advertisements that are between songs if you don’t subscribe to a paying membership. YouTube is also a big platform for free music, and again profit comes from advertising. Of course, you can have a monthly subscription for Spotify, but that is only £9.99 a month which is the price of a brand new album. Imagine going to a record shop and buying every album in there for £9.99, which in effect is what is provided for consumers of Spotify, as there is no obligation to stick to the subscription, you can cancel at any time and you don’t even need to subscribe to use Spotify, you just have to be able to put up with the odd advertisement between songs. Of course there are also the risks of piracy; there are many audio ripping websites available that can take music from a YouTube link that you copy and paste into the website, and it rips the audio from the video creating an MP3 in to your downloads folder. This makes it too easy for people to take music for free, creating more of a battle for musicians and artists.

Hannah Ellis-Peterson of the Guardian said that “Swift initially refused to release her 2012 album Red on Spotify, critising the fact that artists receive between just $0.006 and $0.0084 per song play”. The Guardian also stated that Taylor Swift said herself that “Music is art, and art is important and rare. Important, rare things are valuable. Valuable things should be paid for. It’s my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album’s price point is. I hope they don’t underestimate themselves or undervalue their art”. As a consequence of platforms such as Spotify, YouTube, and iTunes, physical sales have decreased and artists are having to rely on live performance and merchandise a lot more. What Taylor Swift said is completely valid, she is right in saying that art is important and rare, and music is art. You don’t go into an art gallery and take art for free, you aren’t allowed to take photos in art galleries; it is not an accepted thing to do. So why do people do the same with music? People will pay thousands of pounds, sometimes millions of pounds for a piece of art that hangs on the wall, not doing anything else – but they are not willing to pay £9.99 for an album and would rather take it for free from the internet. This is why artists like Taylor Swift have to stand their ground, this is their career and how they survive.

The future of music heavily relies on the nature of the internet. I do not believe that certain genres will take over, but I do believe that the amount of music that is around will increase, and will never stop. The internet gives the opportunity for future artists to upload music to SoundCloud, YouTube, iTunes and other platforms for music with a click of a button. Music these days is recorded straight into a computer, mixed, mastered, bounced and sent straight off (via the internet) to publishing companies, media companies, record labels or even just straight to the internet itself. Electronic music is on the rise, as it is easier for “bedroom” producers to create music. You only need a piece of software like Logic Pro, or Ableton and a keyboard to create something commercial and upload straight to SoundCloud. However this does not mean that other genres are on the decrease. I think that whatever genre it is, people are finding ways of getting their music out there. Whether it is through paying for a recording session for demos, getting basic equipment to record yourself or playing live performances, the internet plays a huge role in every aspect of this from advertisement to distribution of material.

As a result of the internet, physical sales of CDs, Vinyls and Singles have decreased, but the rise of internet sales has compromised this. The internet has made music more accessible through platforms such as YouTube, Spotify, iTunes and SoundCloud. You can buy an album or a single with the click of a button, and this is the same for movies and games too. It allows us to get creative with other people all across the globe, making it easier for our music to distributed and heard. We are able to find inspiration from many different cultures and incorporate it into our own work. Illegal download is something that may cause problems for artists, however I do think that the number of people who are buying music over the internet or via subscription is increasing and they would rather do that than download illegally. You can see this from the statistics chart at the beginning of this essay. The demand for live shows is on the rise, artists and musicians in the present day and in the future will make most of their money from live events, merchandise and publicity events.


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