In recent years, how has media ownership changed in one industry that you have studied?
In the past, the music industry dictated distribution and consumption habits to the audience.
You had to go to a shop to buy your CDs, and the industry controlled how much you paid, the
availability of the CD and how you listened to it. But recent technological developments have
meant that the audience now have much more choice over how they purchase and consume
music. This is a result of the internet.
An example of this switch to digital distribution is the collapse of pinnacle, an independent
distribution company who distributed CDs for over 400 independent labels. The increase in
digital downloading and sites such as myspace meant music fans could get this music easier
online so stopped buying it in the shops. This led to the company going into administration.
Matthew Tait said the collapse was due to “the sudden and steep downturn in the
In 2003, Eric Nicoli, then head of EMI records, stated that ‘digital [music] is the way forward
for industry growth.” Over the past 6 years, the record industry has seen a 940% rise In
income from digital sources. However, software like bearshare and frostwire don’t make it
easy. It is estimated that 95% of music downloaded is downloaded illegally, representing a
potential loss of $30bn a year for the industry.
Consumers don’t see anything wrong with this, according to a 2009 ‘youth and music’ survey
in which 70% of 15-24 year olds said they don’t feel guilty about illegal downloading. So how
can the industry deal with this problem?
EMI started by going online; to the place where the audience were. They needed to interact
with their audience who were already taking ownership of the music away from them; an
idea suggested by Avril Lavigne manager Terry McBride when he said ‘what the industry
need to do is monetise the behaviour of that fan.’ Parolophone, an imprint of EMI created a
website for Lily Allen, using synergy to sell the artist. Lily Allen already had a large Myspace
following, and kept in close contact with her fans through this and her blog. Parlophone
therefore included lots of interactive elements, allowing the fan to remix some of her tracks
for a personal touch, or to play a game to win a free sample of her music. This game could
be emailed to a friend, and spread around the web. EMI were using Lily Allen fan’s social
networks to do the marketing for them; an example of viral marketing. After the radio,
youtibe is now the most popular way for young people to find new music. Lily Allen now has
her own youtube channel along with links to her videos on the site. The audience have taken
the power away from the record labels, and this website gave the fans more of what they
wanted; close contact with the artist and ownership of her music.
EMI also noticed that convergent technologies such as mobile phones were allowing their
audience to listen to more music on portable devices. As part of a £40 million deal with
Robbie Williams, they released a memory card for mobile phones that contained some of his
music. 1 in every $10 spent by young people globally is spent on mobile technology. That’s
eight times more than is spent on music. EMI needed to access this market. More recently,
mobile devices can download songs directly from iTunes and Amazon, and phone packages
come bundled with free downloads, so the need to connect with these technologies is clearly
Since the internet has caused a widening of choice about where and how the audience listen
to their music, the music industry has had to work harder than ever to keep consumers
happy, especially when 61% of young people think a fair price for music is zero (Youth and
music survey). Fan loyalty and contact with artists, as well as keeping up with new
technology have become the main concerns for major labels such as EMI . They have had to
start listening to their consumers more, and no long have such power as the consumers will
go elsewhere for their product if they can find it cheaper and more conveniently. Perhaps
major labels like EMI will have to accept that they no longer have a place in the music
industry. With websites such as Myspace allowing the Arctic Monkeys chart-topping success
without any label support in 2005, the power is now truly with the people.