Category: Business

The below is a rant I wrote for a school discussion topic for my mass media behavior class and I thought I would post it here too.
The digital revolution and the growth of the internet has vastly changed the music business with the availability of cheap multiple track recording software, and the sharing and social networks the internet has made possible. I think that the idea of “making it” has drastically changed in the past fifteen years. I am reminded of the movie, Airheads, where the protagonists take hostage of a radio station in attempts to get their demo tape aired and get a recording contract. The idea that today any artist would be signed by only listening to their demo tape is laughable as well as the idea that signing the record contract would make the artist rich.

The digital age and file sharing has greatly hurt record companies and radio stations, but has been used by artists new and old to grow and strengthen their fan bases. For artists, selling records is no longer where the majority of their money comes in from, it’s from touring and merchandise, and ancillary revenue streams that come from being a star. The business of selling 20 dollar CDs as been replaced with 99 cent download singles and 3.99 dollar ring-tones; for too long record companies and the RIAA fought to protect their old business model instead of innovating and embarrassing new technology. They thought for too long that using DRM would force people to purchase their licensed digital goods, but often forced consumers to other places to find music.

Radio stations too are fighting to protect their long held business models in the new landscape of audio options that consumers have as the number of devices that listeners increases. With satellite radio, iPods, CDs, and internet radio, and others there is no lack of choices in audio entertainment where terrestrial radio once dominated. Video killed the radio star and the internet killed the radio station; radio stations can no longer charge their outlandish CPM rates with declining listener-ship and cheaper, more effective targeted advertising that is available on the internet. Radio ownership deregulation reduced the variety in programing and the days where DJs had actual influence on which songs get played are long gone. Clear Channel has national syndicated programming that airs across the country reducing costs and jobs; this also gives them huge sway with record companies that are trying to get their music played.

A topic that wasn’t covered in either side is the consolidation of music venues and ticketing agencies and the impact that has on newer artists. Earlier this year, Live Nation and Ticketmaster announced a proposed merger worth 2.5 billion dollars that would merge the largest ticket seller and largest venue/concert promoter. Luckily the merger has been meet with some vocal opposition, mainly in the UK as the merger would almost certainly create a monopoly on first rate concerts and shows. Already large music acts like Michael Jackson and Madonna sign deals with Live Nation because they no longer need the support of a record company to get their music out there, but the problem is for newer and indie acts that can be locked out of Live Nation venues. The merger could mean higher ticket prices and could almost eliminate the secondary ticket market.