Survey of the Music Business Lecture 1 Fall 2019

1. Music Business Survey
Overview

2. What is the Music Business?
• The ”Music Business” is what occurs at the
intersection of ART & COMMERCE. Once you add
the commercial element to your music, everything
changes.
• The “music business” includes all business sectors
and business models that in some way, provide a
good or service in connection with commercially
exploited music.
• This course is about the business of music. Our
musical preferences take a back seat to the facts of
how the business works.
• The song and artist examples are given to make
specific points about topics in class.

3. State of the Industry: The Good, The
Bad & The Ugly
Exhibit A: The Artists

4. The Artists - THE INDEPENDENTS
The Good: Thousands of indie artists are out there making a
living from their music and the barriers to entry are low.
The Bad: It’s harder than ever to set yourself apart. Music
inventory and the choices available to find it are the highest in
history.
The Ugly: Family and a sense of normalcy are hard to come by
for many. Some indie artists are deep in debt and struggle to
manage their personal lives.
*The Key: Define for yourself, what “making it” is. SET GOALS
AND UNDERSTAND THE NECESSARY SACRIFICES TO
MEET THEM. SET YOUR “BOUNDRIES” AHEAD OF TIME TO
AVOID DANGEROUS COMPROMISE.
“Making it” today means
being able to make a living
from music. If you can earn
a decent living, $35,000 to
$70,000 a year
from music – you’ve made
it! There is a growing
musical middle class, both
artists and business
people.

5. Recorded Music
*The Good: U.S. recorded music will always be a major worldwide export of
goods and services. And up until about a decade ago - the U.S. recorded
music business was always extremely profitable.
*The Bad: The lack of foresight, vision, planning and attention to
technological advancements by industry leaders led to a scrambling together
of plans and hasty actions to meet sweeping changes in the industry. Record
company consolidation is a continuous reality.
* The Ugly: Recorded music has lost over 50% of it’s business since 1998
BUT the major label streaming battle is paying off. The major record co.’s
have equity interest in Spotify, which is contractually
“unallocated” income to their artists.
The KEY: Record companies that once only sold sound recordings to remain
profitable, are now diversifying their business models to include various other
services via “360 deals”. At the end of the day, there will always be major
stars signed at major labels because of the marketing and money.

6. State of the Industry: The Good, The Bad & The Ugly

7. State of the Industry: The Good, The Bad & The Ugly
30 Years of Recorded
Music
by Digital Music News

9. In 2016, for the first time ever, streaming music platforms generated the
majority of the U.S. music industry’s revenues. The streaming category includes
revenues from subscription services (such as paid versions of Spotify, TIDAL,
and Apple Music, among others), streaming radio services including those
revenues distributed by SoundExchange (like Pandora, SiriusXM, and other
Internet radio), and ad-supported on- demand streaming services (such as
YouTube, Vevo, and ad-supported Spotify).

10. State of the Industry: The Good, The Bad & The Ugly

11. Music Publishing & Songwriters
* The Good: Music publishing will always remain a good income
source. Strong licensing programs, successful song exploitation
and “evergreens” can potentially pay out huge dividends. You can’t
have music, without a song! You can’t have a music business
without music publishing.
*The Bad: The current new media licensing climate is a huge drain
of publishing resources and licensing income. (Google/YouTube,
Spotify, Amazon, Yahoo!, Rhapsody, TouchTunes, etc…).
Consolidation of publishing companies often results in a disservice
to employees and songwriters alike.
*The Ugly: Some government regulations in music publishing don’t
allow for “free market” rates and negotiating. Recent copyright
infringement legal battles are making for a very “cautious” creative
environment.
* The Key: Music publishing will remain a cornerstone of the music
business, it’s just in a transition period. Many companies are
diversifying their business models to generate new revenue and
remain competitive. Potential legal changes remain on the horizon
that could drastically effect the music publishing industry.

12. Touring & Concert Business
*The Good: There will always be talented acts people will
pay to see live. It’s especially good for Nashville. Many artists homebase in
Nashville and tour around the city. Here in town, venues like The Ryman,
Bridgestone Arena, Ascend Ampitheatre, The Grand Ol’ Opry, Marathon
Music Works, The High Watt, Exit/In and many others compete for tourist
and local music dollars.
*The Bad: Some say it’s the economy or corporate takeovers, regardless
business is down. More people than ever are listening to music, but they
are going out to concerts less as competition for the entertainment dollar
grows.
* The Ugly: The consolidation of the huge promoters and corporations
have cost jobs for many and caused prices to rise – likely contributing
towards the low attendance records. Price of gas, food, travel, insurance,
etc. makes it very hard to tour without extensive capital or going into debt.
*The Key: Live music entertainment is built into the fabric of Western
society. Most artists and local economies depend on this income to make a
living - so the question becomes one of music quality, audience demand
and price structures the markets can bear.

13. Music is always to
a Fast-Changing World
• Major recorded music companies
– Control market lion’s share
– Exploring new business models
• Musicians and recording artists
– Discovering ways to “do-it-yourself”
• New technologies
– Bring new opportunities
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14. • From Piano Rolls… to vinyl… to reel to reel… to 8
track… to cassettes… to DAT... to CD and CDR…
Historical Development
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Baskerville, Music Business Handbook and Career Guide, 12e
SAGE Publishing, 2020

15. • The new music business
– New capital and merchants
– New distribution and merchandising methods
– Large investments in record production
Historical Development
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16. • Dawn of digital millennium
– 21st-century digital technology emerged
o Compact disc
o MP3 format
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Historical Development

17. • iTunes arrives
– Legitimize and monetize file downloading
– Labels received a fixed amount
Historical Development
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18. • Digital threat grows
– P2P file sharing
o Virtually unregulatable
o Broadly accessible
o Distribute digitized music files
Historical Development
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19. • Congress and the courts
– Music industry fought back
o Audio Home Recording Act (AHRA) of 1992
o Digital Millennium Copyright Act (1998)
o Stop Online Piracy Act (SOPA)
o Record Industry Association of America (RIAA)
litigation
Historical Development
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20. The Digital Future in Context
• Industry has adapted
– Concert business is up
– Music publishing revenue is healthy
– Music use in TV and films
– Genres demonstrated resiliency
– Streaming behemoths
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21. The Digital Future in Context
• Digital revolution
– Changed consumer attitude
– Distribution made music freely accessible
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22. The Digital Future in Context
• Digital technology
– Made music entrepreneurial once again
o Less mythical
o More accessible
o Viable career choice
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