Web 2.0 - effecting the music industryPresentation Transcript
By David West
What is Web 2.0?
Background on the music Industry?
How people are using web2.0 technologies to aid their interest in music
How artists are using web2.0
How music companies are using web2.0
Conclusion – the overall effect web2.0 is having
The concept was introduced by Tim O’Reilly
Web 2.0 is the next generation of the web having evolved and improved over time to offer more advanced and up to date services.
He has since produced a in-depth report showing the evidence of this by taking companies from web1.0 and comparing them to a similar web2.0 company.
See Delicious link.
The music industry make their money by signing artists to their record label. The artists usually send their material to them so the record label can sieve through all the demo tracks picking out the artists they wish to sign. They then lend the artists money for them to use to record their latest material. Record labels make their money back on record sales and profits that are made from the artists tours and gigs.
This has always been the way that the music industry has worked, but now with web 2.0 technologies things are starting to change as more and more is becoming possible.
As society today has changed people don’t wish to spend £8+ for an album that may only contain a couple of singles that they require.
This has brought about online distribution of music such as itunes which I will cover in further detail later.
P2P File Sharing – An application is installed on to a personal computer which allows the computer to share files with others over the internet.
Uploading and downloading music is illegal, but even knowing this people are still willing to perform this method of file sharing to obtain music, as it is hard to be traced and monitored from authorities.
As so many people use this technique it would be hard for the music industry to sue everyone. So the people they do catch they try and make an example of to scare other people from doing the same.
The music industries have been known to sue people that are caught with illegal music anything from $750 to $150,000 per song!!.
Even knowing this many people still download illegal music.
YouTube – YouTube is a video sharing website.
Many music videos are uploaded onto various media sharing websites allowing people to stream music without having a media application installed.
Its amazing how many music videos there are on YouTube.
www.vidtomp3.com is a website that allows users to convert YouTube and MySpace videos to mp3 format. (only non-copyright videos) But as users record the latest music videos themselves from TV they don't put copyright laws on them when they upload the video as they have already committed a crime as the material is not theirs in the first place. This allows people to have the latest music for nothing. Sometimes even before the material is for sale.
Originally new artists in the industry didn’t make much money when starting out as they are in debt to their record label.
Now with web2.0 technologies this is changing.
MySpace for example. A social networking website allows bands and artists to create their own profile. The artist can then put their material on the profile, allowing them to get their name out to the world. As users of the internet can access the profile 24hrs a day 7 days a week, news soon spreads around the world wide web.
A band benefiting from this exposure is “The Arctic Monkeys” . http://apcmag.com/3878/arctic_monkeys_were_they_really_a_p2p_myspace_fuelled_success_story
Record labels watching with a close eye on social networking sites to try and find the next big artist.
Some artists are now considering why they should even sign up to record labels. Knowing the power of the Internet being a key aspect in communication to their fans.
Radiohead have been the first to proceed with this idea, by allowing their fans to download their latest album for a price their fans see fit.
The idea was a success as an average customer paid $5 to $9. When if Radiohead would of gone through the normal procedure of getting a record label to release the album a band with Radiohead's stature would typically of made $2.50
The only cost that the band would of had to pay for, would of been the small cost in keeping their website maintained.
But I don't really see this kicking off as it may of been successful for radio head but they are already famous for what they do. When a new starting up artist would not of got the attention as they did. Meaning they would not of sold many records.
The industry have noticed all these changes, especially to their profit margins.
People don't want to spend a lot on purchasing music knowing they could get for free and with a very slim chance of being caught.
So the solution was to bring out music downloads. Where users could download the single track they wished for, rather than the album. Also for a lot cheaper price as no physical storage space or customer service is needed unlike with a record shop.
The first big step in this direction was brought about by Apple as they created an online store for digital music downloads along with designing a piece of software to manage the downloads (iTunes).
The online store allows users to purchase single tracks along with creating and purchasing their own playlists.
Along with this for every sale made a proportion of the profits go directly to the artist.
How music compaines are using web 2.0
The downside with purchasing music from iTunes is the fact that the music can only be played on Apples own hardware, as it has drm.
Even still 70% of online sales in America last year were purchased from Apples iTunes, seeing the success the four big music companies are worried.
They have just come about settling a deal with Amazon to offer non-drm music, which will allow people to play their content on any medium.
How music compaines are using web 2.0 con...
From the points I have made you can see a big shift in the way the music industries are producing and selling music.
Originally artists would show record labels their talents then if the record label thought they have a chance of making it big they would loan the artist/s money for recording etc. To now the labels looking for new talent through the use of networking sites.
Record sales dropping due to the ability of peer-to-peer file sharing, allowing people to illegally download music.
From going from a physical medium such as CD to now offering a digital form of music via download of the web as of online stores.
It looks very much like this is the future of the music industry - a digital form.