Music industry in the 21st century
Encyclopedia
In the first decade of the 21st century consumers began to use computers and computer networks as the primary means to record, distribute, store and play music. This technological shift caused widespread economic changes and fundamentally changed the relationships between artists, record companies, promoters, retail music stores, the technology industry and the consumer. The rise of digital music consumption options contributed to a few fundamental changes in consumption. First the decline of album sales. With the A la carte sales models increasing in popularity, consumers no longer download entire albums but rather choose single songs.
The initial stage (from approximately 1998 to 2001) of the digital music revolution was the emergence of peer-to-peer
(P2P) networks that allowed the free exchange of music files (such as Kazaa
and Napster). By 2001, the cost of hard drive space had dropped to a level that allowed pocket-sized computers to store large libraries of music. The iPod
and iTunes
system for music storage and playback became immensely popular, and many consumers began to transfer their physical recording media (such as CDs) onto computer hard drives. The iTunes music store offered legal downloads beginning in 2003, and competitors soon followed, offering a variety of online music services, such as internet radio
. Digital music distribution was aided by the widespread acceptance of broadband
in the middle of the decade. At the same time, recording software (such as Avid
's ProTools) began to be used almost exclusively to make records, rendering expensive multitrack tape machines (such as the 1967 Studer
) almost obsolete.
The chief economic impact of these changes was a dramatic decline in revenues from recorded music. In the 21st century, consumers spent far less money on recorded music than they had in 1990s, in all formats. Total revenues for CDs, vinyl
, cassettes and digital downloads
in the U.S. dropped from a high of $14.6 billion in 1999 to $9 billion in 2008.
The popularity of internet music distribution
has increased and by 2007 more units were sold over the internet than in any other form.
However, as The Economist
reported, "paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs."
The 2000s period stands in stark contrast from the "CD boom" of 1984-1995, when profit margins averaged above 30% and industry executives were notorious for their high profile, even frivolous spending.
The major record labels consistently failed to heed warnings or to support any measures that embraced the change in technology. In the early years of the decade, the industry fought illegal file sharing
, successfully shutting down Napster in 2001 and threatening thousands of individuals with legal action. This failed to slow the decline in revenue and was a public relations disaster. Some academic studies have even suggested that downloads were not the true cause of the decline.
The turmoil in the industry changed the balance of power among all the various players. The major music-only stores such as Tower Records
(which once wielded considerable influence in the industry) went bankrupt, replaced by box stores (such as Wal-Mart
and Best Buy
). Recording artists began to rely primarily on live performance
s and merchandise for their income, which in turn made them more dependent on music promoters such as Live Nation
(which dominates tour promotion and owns a large number of music venue
s.)
In order to benefit from all of an artist's income streams, record companies began to rely on the "360 deal
", a new business relationship pioneered by Robbie Williams
and EMI
in 2007.
At the other extreme, record companies also used simple manufacturing and distribution deal
s, which gives a higher percentage to the artist, but does not cover the expense of marketing and promotion. Many newer artists no longer see any kind of "record deal" as an integral part of their business plan
at all. Inexpensive recording hardware and software made it possible to create high quality music in a bedroom and distribute it over the internet to a worldwide audience.
This, in turn, caused problems for recording studio
s, record producer
s and audio engineers: the Los Angeles Times
reported that, by 2009, as many as half of the recording facilities in that city had failed.
Consumers benefited enormously from the ease with which music can be shared from computer to computer, whether over the internet or by the exchange of physical CDs. This has given consumers unparalleled choice in music consumption and has opened up performers to niche
markets to which they previously had little access. According to Nielson Soundscan, by 2009 CDs accounted for 79 percent of album sales, with 20 percent coming from digital, representing both a 10 percent drop and gain for both formats in 2 years.
Record sales
Manufacture Shipments
Record stores
service created by Shawn Fanning
while he was attending Northeastern University in Boston
and operating between June 1999 and July 2001. Its technology allowed people to easily copy and distribute MP3
files among each other, bypassing the established market for such songs and thus leading to the music industry's accusations of massive copyright violations.
The first peer-to-peer case was A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001). The court found that Napster was contributory liable for the copyright infringement
of its end-users because it "knowingly encourages and assists the infringement of plaintiffs' copyrights." Although the original service was shut down by court order, it paved the way for larger decentralized peer-to-peer file-distribution programs such as Kazaa
, Morpheus
, Grokster
, iMesh
, and Limewire
, which have been much harder to control because they practice more technically and legally creative approaches.
However, a widely cited paper published in February 2007 concludes that file sharing has no negative effect on CD sales. This paper by Olberholzer-Gee and Strumpf, was published in the Journal of Political Economy, and is the only paper which analyzes actual downloads on file sharing networks. Data gathered from tracking downloading on OpenNap servers indicates that most users logged on very rarely and when they did log on they only downloaded a little more than one CD’s worth of songs. To show how these downloads affected album sales they tracked sales and downloads of 500 random albums of varying genres and after doing so found that illegal downloads would only be a small force in the decrease in album sales, possibly even slightly improving album sales of the top albums in stores at the time. CNET News.com staff writer John Borland reports, “even high levels of file-swapping seemed to translate into an effect on album sales that was "statistically indistinguishable from zero".
In March 2007 the Wall Street Journal found that CD sales have dropped 20 percent in one year, which the Wall Street Journal interpreted as the latest sign of the shift in the way people acquire their music. BigChampagne LLC has reported that around one billion songs a month are being traded on illegal file-sharing networks. As a result of this decline in CD sales, a significant amount of record stores are going out of business and “...making it harder for consumers to find and purchase older titles in stores.”
On December 19, 2008, the Wall Street Journal reported the following:
observed that three main business models have risen to dominance. They are a-la-carte, subscription service, and advertisement-based.
(Apple Inc.), who surpassed Wal-Mart
to become the US’s largest music retailer in April 2008. Sector leaders include:
Rolling Stone
reported a price war
between MP3 stores, iTunes
and Amazon.com
. Bill Carr, vice president of digital media
for Amazon.com
mentioned the following of digital music "one of the great benefits of the digital business versus the CD business is that we can experiment with price changes for an hour, a day or however long we like, with no impact on inventory".
, is theorized to maximize revenues in the long run. The sector leader is Napster
, which costs $12.95/month and offers 6 million downloads and now offers a $5 a month program. Napster
’s net revenue for the quarter ending on June 30, 2008 was $30.3 million. Sector leaders include:
free of charge to the consumer, while funding is derived from advertisement. The model is widespread as seen by the success of AOL Music, Yahoo! Music
and YouTube
(multimedia provider). Many of these services are internet radio stations, as they offer continuous streaming music, while others are not continuously streaming. Many of these services offer multimedia or additional services. For example, MySpace
(owned by Fox Interactive Media
) offers social-networking as its flagship service. comScore
reports the top 10 in internet radio viewership in the United States:
Other sector players:
See also List of Internet stations
YouTube
(owned by Google Inc.) is the premier site for finding music videos for both independent bands and mainstream bands that have released their music on CD or digitally, while also being useful for finding rare songs. YouTube
is a multimedia provider, so it is difficult to say how much entertainment it has provided to music consumers, however it did provide about one-third of all 11 billion online video views in the US in the month of April 2008.
The site is also testing three new landing pages dedicated to the popular categories of news, movies, and music. Each page will be populated with the most popular content on the site related to that category. Some have even hailed YouTube
as being the "digital successor to MTV" as they seem to be positioning themselves in that manner. Currently, they have mixed relations with labels as evidenced by their icy relationship with Warner Music Group
but more optimistic relationship with Universal Music.
MySpace
(owned by Fox Interactive Media
) is also a key player and Rolling Stone
reports that it hosts more than 70 million users monthly and that “visitors to the site can hear both Bob Dylan
’s or The White Stripes
' entire catalogue”. Unlike many services, MySpace has been successful in making copyright deals with the RIAA's "Big Four", which is Sony BMG, Warner Music Group
, Universal Music and EMI
, in September 2008. In January 2009, MySpace
made partnerships with the following independent labels: Nettwerk
, INgrooves, Iris Distribution, RoyaltyShare, and Wind-up Entertainment. In March 2009, CNET News reported that there are more than 5 million bands with music on the streaming-and-discovery music service, and more than 100 million playlists have been created.
Pandora Internet Radio is distinctive from both YouTube
and MySpace
in that it offers consumers continuously streaming media
rather than non-continuous music, which makes it highly similar to terrestrial radio
or television
. However, it can be contrasted with radio
in that it offers music recommendation. YouTube
is similar to Pandora
in that it also offers recommendation, but is distinct in that content is user-generated
.
A new type of service that has also become popular is sites that allow consumers to pay what they wish or pay by advertising on social networking sites. Sites like Noisetrade.com and comeandlive.com are examples of sites that sponsor artists and allow users to download music in exchange for advertising for the artist. Music is essentially free to users essentially costing only the time it takes to post information about the artist downloaded on facebook, Twitter, or email. Another example was the release of the most recent Radiohead album In Rainbows in which users could download the album and name their own price. The idea of pay-what-you-want music consumption is new, but catching on with users and growing.
The Recording Industry Association of America
(RIAA) reported data on the music industry’s sales by format
over the ten-year period from 1998 until 2007. The data in the table below is from the 2007 report.
Format Market share
Note: These figures represent data collected only from RIAA member labels, which constitutes only a portion of total online music exchanged.
Statistical analysis suggests the large-scale change in distribution:
In 2008, physical album sales fell 20 percent to 362.6 million from 450.5 million, while digital album sales rose 32 percent to a record 65.8 million units.
) notes:
devices that stores, organizes and plays audio files
. Some DAPs (digital audio players) are also referred to as portable media player
s as they have image-viewing and/or video-playing support. The first mass-produced DAP was created in 1997 by SaeHan Information Systems, which domestically sold its “MPMan” player in the middle of 1998. In October 2001, Apple Computer (now known as Apple Inc.) unveiled the first generation iPod
, the 5 GB hard drive based DAP with a 1.8" Toshiba
drive. With the development of a minimalistic user interface
and a smaller form factor, the iPod was initially notable within users of the Macintosh
community. In July 2002, Apple introduced the second generation update to the iPod. It was compatible with Windows
computers through Musicmatch Jukebox
(now known as Y!Music Musicmatch Jukebox). The iPod series, which grew to include microdrive
and flash-based players, has become the market leader in DAPs.
, which enables network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency
.
The key advantage of 3G enabled phones over MP3 players is their greater web integration. This enables users to readily access a far larger quantity of songs than MP3 player users can. For an MP3 player, songs must be stored before the user leaves their computer, but with 3G enabled phones the device is not separated from the source. It is projected that revenue from mobile media and entertainment (MME) services in the US will more than double during the next five years.
Online music stores
The initial stage (from approximately 1998 to 2001) of the digital music revolution was the emergence of peer-to-peer
Peer-to-peer
Peer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...
(P2P) networks that allowed the free exchange of music files (such as Kazaa
Kazaa
Kazaa Media Desktop started as a peer-to-peer file sharing application using the FastTrack protocol licensed by Joltid Ltd. and operated as Kazaa by Sharman Networks...
and Napster). By 2001, the cost of hard drive space had dropped to a level that allowed pocket-sized computers to store large libraries of music. The iPod
IPod
iPod is a line of portable media players created and marketed by Apple Inc. The product line-up currently consists of the hard drive-based iPod Classic, the touchscreen iPod Touch, the compact iPod Nano, and the ultra-compact iPod Shuffle...
and iTunes
ITunes
iTunes is a media player computer program, used for playing, downloading, and organizing digital music and video files on desktop computers. It can also manage contents on iPod, iPhone, iPod Touch and iPad....
system for music storage and playback became immensely popular, and many consumers began to transfer their physical recording media (such as CDs) onto computer hard drives. The iTunes music store offered legal downloads beginning in 2003, and competitors soon followed, offering a variety of online music services, such as internet radio
Internet radio
Internet radio is an audio service transmitted via the Internet...
. Digital music distribution was aided by the widespread acceptance of broadband
Broadband
The term broadband refers to a telecommunications signal or device of greater bandwidth, in some sense, than another standard or usual signal or device . Different criteria for "broad" have been applied in different contexts and at different times...
in the middle of the decade. At the same time, recording software (such as Avid
AVID
AVID stands for:* Advancement Via Individual Determination, a college-readiness system designed to increase the number of students who enroll in four-year colleges in the U.S....
's ProTools) began to be used almost exclusively to make records, rendering expensive multitrack tape machines (such as the 1967 Studer
Studer
Studer is a Swiss manufacturer of professional audio equipment, founded in Zurich in 1948 by Willi Studer. It is known primarily for the design and manufacture of analog tape recorders and mixing consoles. Studer also produce other technology solutions, such as telephony management systems and...
) almost obsolete.
The chief economic impact of these changes was a dramatic decline in revenues from recorded music. In the 21st century, consumers spent far less money on recorded music than they had in 1990s, in all formats. Total revenues for CDs, vinyl
Gramophone record
A gramophone record, commonly known as a phonograph record , vinyl record , or colloquially, a record, is an analog sound storage medium consisting of a flat disc with an inscribed, modulated spiral groove...
, cassettes and digital downloads
Music download
A music download is the transferral of music from an Internet-facing computer or website to a user's local computer. This term encompasses both legal downloads and downloads of copyright material without permission or payment...
in the U.S. dropped from a high of $14.6 billion in 1999 to $9 billion in 2008.
The popularity of internet music distribution
Music download
A music download is the transferral of music from an Internet-facing computer or website to a user's local computer. This term encompasses both legal downloads and downloads of copyright material without permission or payment...
has increased and by 2007 more units were sold over the internet than in any other form.
However, as The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
reported, "paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs."
The 2000s period stands in stark contrast from the "CD boom" of 1984-1995, when profit margins averaged above 30% and industry executives were notorious for their high profile, even frivolous spending.
The major record labels consistently failed to heed warnings or to support any measures that embraced the change in technology. In the early years of the decade, the industry fought illegal file sharing
File sharing
File sharing is the practice of distributing or providing access to digitally stored information, such as computer programs, multimedia , documents, or electronic books. It may be implemented through a variety of ways...
, successfully shutting down Napster in 2001 and threatening thousands of individuals with legal action. This failed to slow the decline in revenue and was a public relations disaster. Some academic studies have even suggested that downloads were not the true cause of the decline.
The turmoil in the industry changed the balance of power among all the various players. The major music-only stores such as Tower Records
Tower Records
Tower Records was a retail music chain that was based in Sacramento, California. It currently exists as an international franchise and an online music store....
(which once wielded considerable influence in the industry) went bankrupt, replaced by box stores (such as Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
and Best Buy
Best Buy
Best Buy Co., Inc. is an American specialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Mexico, Canada & China. The company's subsidiaries include Geek Squad, CinemaNow, Magnolia Audio Video, Pacific Sales, and, in Canada operates...
). Recording artists began to rely primarily on live performance
Concert
A concert is a live performance before an audience. The performance may be by a single musician, sometimes then called a recital, or by a musical ensemble, such as an orchestra, a choir, or a musical band...
s and merchandise for their income, which in turn made them more dependent on music promoters such as Live Nation
Live Nation
Live Nation is a live-events company based in Beverly Hills, California, focused on concert promotions. Live Nation formed in 2005 as a spin-off from Clear Channel Communications, which then merged with Ticketmaster in 2010 to become Live Nation Entertainment....
(which dominates tour promotion and owns a large number of music venue
Music venue
A music venue is any location used for a concert or musical performance. Music venues range in size and location, from an outdoor bandshell or bandstand or a concert hall to an indoor sports stadium. Typically, different types of venues host different genres of music...
s.)
In order to benefit from all of an artist's income streams, record companies began to rely on the "360 deal
360 deal
In the music industry, a 360 deal is a business relationship between an artist and a music industry company. The company agrees to provide financial support for the artist, including direct advances as well as funds for marketing, promotion and touring...
", a new business relationship pioneered by Robbie Williams
Robbie Williams
Robert Peter "Robbie" Williams is an English singer-songwriter, vocal coach and occasional actor. He is a member of the pop group Take That. Williams rose to fame in the band's first run in the early- to mid-1990s. After many disagreements with the management and certain group members, Williams...
and EMI
EMI
The EMI Group, also known as EMI Music or simply EMI, is a multinational music company headquartered in London, United Kingdom. It is the fourth-largest business group and family of record labels in the recording industry and one of the "big four" record companies. EMI Group also has a major...
in 2007.
At the other extreme, record companies also used simple manufacturing and distribution deal
Distribution deal
A distribution deal is a legal agreement between one party and another, to handle distribution of a product....
s, which gives a higher percentage to the artist, but does not cover the expense of marketing and promotion. Many newer artists no longer see any kind of "record deal" as an integral part of their business plan
Business plan
A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals....
at all. Inexpensive recording hardware and software made it possible to create high quality music in a bedroom and distribute it over the internet to a worldwide audience.
This, in turn, caused problems for recording studio
Recording studio
A recording studio is a facility for sound recording and mixing. Ideally both the recording and monitoring spaces are specially designed by an acoustician to achieve optimum acoustic properties...
s, record producer
Record producer
A record producer is an individual working within the music industry, whose job is to oversee and manage the recording of an artist's music...
s and audio engineers: the Los Angeles Times
Los Angeles Times
The Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
reported that, by 2009, as many as half of the recording facilities in that city had failed.
Consumers benefited enormously from the ease with which music can be shared from computer to computer, whether over the internet or by the exchange of physical CDs. This has given consumers unparalleled choice in music consumption and has opened up performers to niche
Niche market
A niche market is the subset of the market on which a specific product is focusing; therefore the market niche defines the specific product features aimed at satisfying specific market needs, as well as the price range, production quality and the demographics that is intended to impact...
markets to which they previously had little access. According to Nielson Soundscan, by 2009 CDs accounted for 79 percent of album sales, with 20 percent coming from digital, representing both a 10 percent drop and gain for both formats in 2 years.
Industry Finances
| Year | Record sales (Retail values in billions USD) |
US Shipment Value (at Suggested List Price in millions USD) | Consumers purchasing at record stores | |||||
|---|---|---|---|---|---|---|---|---|
| Worldwide | US | |||||||
| Sales | Change | Sales | Change | Volume | Change | |||
| 1999 | 14,584.5 | 44.5% | ||||||
| 2000 | 36.9 | 14.0 | 14,323.0 | 1.79% | 42.4% | |||
| 2001 | 33.7 | 8.7% | 13.4 | 4.3% | 13,740.9 | 4.06% | 42.5% | |
| 2002 | 32.2 | 4.5% | 12.6 | 6.0% | 12,614.2 | 8.20% | 36.8% | |
| 2003 | 32.0 | 0.6% | 11.8 | 6.3% | 11,854.4 | 6.02% | 33.2% | |
| 2004 | 33.6 | 5.0% | 12.2 | 3.4% | 12,345.0 | 4.14% | 32.5% | |
| 2005 | 33.5 | 0.3% | 12.3 | 0.8% | 12,296.9 | 0.39% | 39.4% | |
| 2006 | 31.8 | 5.1% | 11.5 | 6.5% | 11,758.2 | 4.38% | 35.4% | |
| 2007 | 29.9 | 6.0% | 10.4 | 9.6% | 10,372.1 | 11.79% | 31.1% | |
| 2008 | 8,480.2 | 18.24% | 30.0% | |||||
| Total for period (adj. for inflation) |
19.0% ( 32.1% ) |
25.7% ( 37.7% ) |
41.9% ( 55.0% ) (using CPI) |
33% | ||||
Record sales
- Table is a meta-analysis of eight IFPIIFPIThe International Federation of the Phonographic Industry is the organisation that represents the interests of the recording industry worldwide. It is a not-for-profit members' organisation registered in Switzerland...
annual reports - In 2008, 123m physical albums were sold in the UK, compared with 131m in 2007 and 151m in 2006. At an average price of £7.72, CDs were more than 25% cheaper in 2008 than in 2000.
Manufacture Shipments
- The figures below (in millions) indicate the overall size of the U.S. sound recording industry based on manufacturers' shipments at suggested list prices.
Record stores
- The transition from CDs to digital downloads has been shrinking the record industry most of the decade, leading to mass layoffs, and artist-roster cuts at major labels. CD sales have dropped 48.9% since 2000 in USA. Approximately 2,680 record stores closed in the U.S. between 2005 and early 2009. In the UK, all the national specialist music retailers have collapsed except for HMVHMVHis Master's Voice is a trademark in the music business, and for many years was the name of a large record label. The name was coined in 1899 as the title of a painting of the dog Nipper listening to a wind-up gramophone...
, a variety retailer that was once the UK's largest music retailer.1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Consumers purchasing at record stores 44.5 42.4 42.5 36.8 33.2 32.5 39.4 35.4 31.1 30.0 %
Dawn of P2P: Napster
Napster was an online music file sharingPeer-to-peer file sharing
P2P or Peer-to-peer file sharing allows users to download files such as music, movies, and games using a P2P software client that searches for other connected computers. The "peers" are computer systems connected to each other through internet. Thus, the only requirements for a computer to join...
service created by Shawn Fanning
Shawn Fanning
Shawn Fanning is an American computer programmer, serial entrepreneur, and angel investor. He developed Napster, one of the first popular peer-to-peer file sharing platforms, in 1998. The popularity of Napster was widespread and Fanning was featured on the cover of Time magazine...
while he was attending Northeastern University in Boston
Boston
Boston is the capital of and largest city in Massachusetts, and is one of the oldest cities in the United States. The largest city in New England, Boston is regarded as the unofficial "Capital of New England" for its economic and cultural impact on the entire New England region. The city proper had...
and operating between June 1999 and July 2001. Its technology allowed people to easily copy and distribute MP3
MP3
MPEG-1 or MPEG-2 Audio Layer III, more commonly referred to as MP3, is a patented digital audio encoding format using a form of lossy data compression...
files among each other, bypassing the established market for such songs and thus leading to the music industry's accusations of massive copyright violations.
The first peer-to-peer case was A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001). The court found that Napster was contributory liable for the copyright infringement
Copyright infringement
Copyright infringement is the unauthorized or prohibited use of works under copyright, infringing the copyright holder's exclusive rights, such as the right to reproduce or perform the copyrighted work, or to make derivative works.- "Piracy" :...
of its end-users because it "knowingly encourages and assists the infringement of plaintiffs' copyrights." Although the original service was shut down by court order, it paved the way for larger decentralized peer-to-peer file-distribution programs such as Kazaa
Kazaa
Kazaa Media Desktop started as a peer-to-peer file sharing application using the FastTrack protocol licensed by Joltid Ltd. and operated as Kazaa by Sharman Networks...
, Morpheus
Morpheus
Morpheus may refer to:Characters*Morpheus , the principal god of dreams in the Greek mythology*Morpheus , a moniker for Dream, a fictional character in the comic book The Sandman...
, Grokster
Grokster
Grokster Ltd. was a privately owned software company based in Nevis, West Indies that created the Grokster peer-to-peer file-sharing client in 2001 that utilized the FastTrack protocol. Grokster Ltd. was rendered extinct in late 2005 by the United States Supreme Court's decision in MGM Studios,...
, iMesh
IMesh
iMesh is a media and file sharing client that's available in 9 languages. It uses a proprietary, centralized, P2P network operating on ports 80, 443 and 1863. iMesh is owned by an American company iMesh, Inc. and maintains a development center in Israel...
, and Limewire
LimeWire
LimeWire is a free peer-to-peer file sharing client program that runs on Windows, Mac OS X, Linux, and other operating systems supported by the Java software platform. LimeWire uses the gnutella network as well as the BitTorrent protocol. A free software version and a purchasable "enhanced"...
, which have been much harder to control because they practice more technically and legally creative approaches.
File sharing and its effects
A number of studies have found that file sharing has a negative impact on record sales. Examples of such studies include three papers published in the April 2006 issue of the Journal of Law and Economics (Liebowitz, Rob and Waldfogel, Zentner). Alejandro Zentner notes in another paper published in 2005, that music sales have globally dropped from approximately $38 billion in 1999 to $32 billion in 2003, and that this downward trend coincides with the advent of Napster in June 1999. Using aggregate data Stan J. Liebowitz argues in a series of papers (2005, 2006) that file sharing had a significant negative impact on record sales.However, a widely cited paper published in February 2007 concludes that file sharing has no negative effect on CD sales. This paper by Olberholzer-Gee and Strumpf, was published in the Journal of Political Economy, and is the only paper which analyzes actual downloads on file sharing networks. Data gathered from tracking downloading on OpenNap servers indicates that most users logged on very rarely and when they did log on they only downloaded a little more than one CD’s worth of songs. To show how these downloads affected album sales they tracked sales and downloads of 500 random albums of varying genres and after doing so found that illegal downloads would only be a small force in the decrease in album sales, possibly even slightly improving album sales of the top albums in stores at the time. CNET News.com staff writer John Borland reports, “even high levels of file-swapping seemed to translate into an effect on album sales that was "statistically indistinguishable from zero".
In March 2007 the Wall Street Journal found that CD sales have dropped 20 percent in one year, which the Wall Street Journal interpreted as the latest sign of the shift in the way people acquire their music. BigChampagne LLC has reported that around one billion songs a month are being traded on illegal file-sharing networks. As a result of this decline in CD sales, a significant amount of record stores are going out of business and “...making it harder for consumers to find and purchase older titles in stores.”
On December 19, 2008, the Wall Street Journal reported the following:
After years of suing thousands of people for allegedly stealing music via the Internet, the recording industry is set to drop its legal assault as it searches for more effective ways to combat online music piracy.The decision represents an abrupt shift of strategy for the industry, which has opened legal proceedings against about 35,000 people since 2003. Critics say the legal offensive ultimately did little to stem the tide of illegally downloaded music. And it created a public-relations disaster for the industry, whose lawsuits targeted, among others, several single mothers, a dead person and a 13-year-old girl. Instead, the Recording Industry Association of America said it plans to try an approach that relies on the cooperation of Internet-service providers.
Digital business models
With the explosion of formats and the creation of legitimate digital content, the IFPIIFPI
The International Federation of the Phonographic Industry is the organisation that represents the interests of the recording industry worldwide. It is a not-for-profit members' organisation registered in Switzerland...
observed that three main business models have risen to dominance. They are a-la-carte, subscription service, and advertisement-based.
A-la-carte (MP3 Store)
A-la-carte is a service that sells individual songs, typically for $0.99 and now $1.29. They are known to consumers as "MP3 Stores". The leading provider is iTunes StoreITunes Store
The iTunes Store is a software-based online digital media store operated by Apple. Opening as the iTunes Music Store on April 28, 2003, with over 200,000 items to purchase, it is, as of April 2008, the number-one music vendor in the United States...
(Apple Inc.), who surpassed Wal-Mart
Wal-Mart
Wal-Mart Stores, Inc. , branded as Walmart since 2008 and Wal-Mart before then, is an American public multinational corporation that runs chains of large discount department stores and warehouse stores. The company is the world's 18th largest public corporation, according to the Forbes Global 2000...
to become the US’s largest music retailer in April 2008. Sector leaders include:
- iTunes StoreITunes StoreThe iTunes Store is a software-based online digital media store operated by Apple. Opening as the iTunes Music Store on April 28, 2003, with over 200,000 items to purchase, it is, as of April 2008, the number-one music vendor in the United States...
- Amazon.comAmazon.comAmazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
Rolling Stone
Rolling Stone
Rolling Stone is a US-based magazine devoted to music, liberal politics, and popular culture that is published every two weeks. Rolling Stone was founded in San Francisco in 1967 by Jann Wenner and music critic Ralph J...
reported a price war
Price war
Price war is a term used in economic sector to indicate a state of intense competitive rivalry accompanied by a multi-lateral series of price reduction. One competitor will lower its price, then others will lower their prices to match. If one of them reduces their price again, a new round of...
between MP3 stores, iTunes
ITunes Store
The iTunes Store is a software-based online digital media store operated by Apple. Opening as the iTunes Music Store on April 28, 2003, with over 200,000 items to purchase, it is, as of April 2008, the number-one music vendor in the United States...
and Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
. Bill Carr, vice president of digital media
Digital media
Digital media is a form of electronic media where data is stored in digital form. It can refer to the technical aspect of storage and transmission Digital media is a form of electronic media where data is stored in digital (as opposed to analog) form. It can refer to the technical aspect of...
for Amazon.com
Amazon.com
Amazon.com, Inc. is a multinational electronic commerce company headquartered in Seattle, Washington, United States. It is the world's largest online retailer. Amazon has separate websites for the following countries: United States, Canada, United Kingdom, Germany, France, Italy, Spain, Japan, and...
mentioned the following of digital music "one of the great benefits of the digital business versus the CD business is that we can experiment with price changes for an hour, a day or however long we like, with no impact on inventory".
Subscription service
A subscription service offers the consumer unlimited downloads for a monthly fee. This approach, according to the Open Music ModelOpen Music Model
The Open Music Model is an economic and technological framework for the recording industry based on research conducted at the Massachusetts Institute of Technology...
, is theorized to maximize revenues in the long run. The sector leader is Napster
Napster (pay service)
Napster is an online music store and a Best Buy company. It was originally founded as a file sharing service. For more information about its founding mission as a free file sharing service, see Napster.-History:...
, which costs $12.95/month and offers 6 million downloads and now offers a $5 a month program. Napster
Napster (pay service)
Napster is an online music store and a Best Buy company. It was originally founded as a file sharing service. For more information about its founding mission as a free file sharing service, see Napster.-History:...
’s net revenue for the quarter ending on June 30, 2008 was $30.3 million. Sector leaders include:
- NapsterNapster (pay service)Napster is an online music store and a Best Buy company. It was originally founded as a file sharing service. For more information about its founding mission as a free file sharing service, see Napster.-History:...
- RhapsodyRhapsody (online music service)Rhapsody is an online music store subscription service, launched in December 2001, and available in the United States only. On April 6, 2010, Rhapsody officially declared its independence from RealNetworks. Downloaded files come with restrictions on their use, enforced by Helix, Rhapsody's version...
Advertisement-based service
Advertisement-based services offer musicMusic
Music is an art form whose medium is sound and silence. Its common elements are pitch , rhythm , dynamics, and the sonic qualities of timbre and texture...
free of charge to the consumer, while funding is derived from advertisement. The model is widespread as seen by the success of AOL Music, Yahoo! Music
Yahoo! Music
Yahoo! Music, owned by Yahoo!, is the provider of a variety of music services, including Internet radio, music videos, news, artist information, and original programming...
and YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
(multimedia provider). Many of these services are internet radio stations, as they offer continuous streaming music, while others are not continuously streaming. Many of these services offer multimedia or additional services. For example, MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
(owned by Fox Interactive Media
Fox Interactive Media
News Corporation's Digital Media Group , also known as News Corp. Digital Media and formerly Fox Interactive Media, oversees the Internet business operations of media giant News Corporation, and was formed to oversee News Corporation's new media acquisitions, including IGN Entertainment, MySpace...
) offers social-networking as its flagship service. comScore
ComScore
comScore is a Internet marketing research company providing marketing data and services to many of the Internet's largest businesses. comScore tracks all internet data on its surveyed computers in order to study online behavior....
reports the top 10 in internet radio viewership in the United States:
| Unique Visitors (000) | |||
|---|---|---|---|
| July '07 | July '08 | % Change | |
| Total Internet: Total Audience | 180,078 | 189,134 | 5 |
| AOL Music | 15,284 | 23,884 | 56 |
| Yahoo! Music Yahoo! Music Yahoo! Music, owned by Yahoo!, is the provider of a variety of music services, including Internet radio, music videos, news, artist information, and original programming... |
23,075 | 18,725 | -19 |
| Clear Channel Online Clear Channel Communications Clear Channel Communications, Inc. is an American media conglomerate company headquartered in San Antonio, Texas. It was founded in 1972 by Lowry Mays and Red McCombs, and was taken private by Bain Capital LLC and Thomas H. Lee Partners LP in a leveraged buyout in 2008... |
10,697 | 9,394 | -12 |
| Pandora Radio | 2,551 | 4,834 | 89 |
| Interactive One | 512 | 3,515 | 587 |
| CBS Radio CBS Radio CBS Radio, Inc., formerly known as Infinity Broadcasting Corporation, is one of the largest owners and operators of radio stations in the United States, third behind main rival Clear Channel Communications and Cumulus Media. CBS Radio owns around 130 radio stations across the country... |
3,469 | 3,240 | -7 |
| NPR.ORG NPR NPR, formerly National Public Radio, is a privately and publicly funded non-profit membership media organization that serves as a national syndicator to a network of 900 public radio stations in the United States. NPR was created in 1970, following congressional passage of the Public Broadcasting... |
1,717 | 2,538 | 48 |
| Citadel Broadcasting Corporation | 1,373 | 1,885 | 37 |
| Batanga.com Batanga.com Batanga, Inc. is a media company directed to a U.S. Hispanic audience. Batanga operates through several media vehicles, including Batanga.com - a streaming service hosted in Spain - Batanga Publishing and Batanga Live. Batanga, Inc. maintains offices in Miami and New York.Batanga.com also offers... |
1,239 | 1,810 | 46 |
| Disney Music Radio Disney Radio Disney is a radio network based in Burbank, California and headquartered out of the Disney Channel headquarters on West Alameda Ave., from where it has been based since November 2008. Prior to that, the network was based in Dallas, Texas... |
1,721 | 1,598 | -7 |
Other sector players:
- YouTubeYouTubeYouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
- MySpaceMySpaceMyspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
See also List of Internet stations
YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
(owned by Google Inc.) is the premier site for finding music videos for both independent bands and mainstream bands that have released their music on CD or digitally, while also being useful for finding rare songs. YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
is a multimedia provider, so it is difficult to say how much entertainment it has provided to music consumers, however it did provide about one-third of all 11 billion online video views in the US in the month of April 2008.
The site is also testing three new landing pages dedicated to the popular categories of news, movies, and music. Each page will be populated with the most popular content on the site related to that category. Some have even hailed YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
as being the "digital successor to MTV" as they seem to be positioning themselves in that manner. Currently, they have mixed relations with labels as evidenced by their icy relationship with Warner Music Group
Warner Music Group
Warner Music Group is the third largest business group and family of record labels in the recording industry, making it one of the big four record companies...
but more optimistic relationship with Universal Music.
MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
(owned by Fox Interactive Media
Fox Interactive Media
News Corporation's Digital Media Group , also known as News Corp. Digital Media and formerly Fox Interactive Media, oversees the Internet business operations of media giant News Corporation, and was formed to oversee News Corporation's new media acquisitions, including IGN Entertainment, MySpace...
) is also a key player and Rolling Stone
Rolling Stone
Rolling Stone is a US-based magazine devoted to music, liberal politics, and popular culture that is published every two weeks. Rolling Stone was founded in San Francisco in 1967 by Jann Wenner and music critic Ralph J...
reports that it hosts more than 70 million users monthly and that “visitors to the site can hear both Bob Dylan
Bob Dylan
Bob Dylan is an American singer-songwriter, musician, poet, film director and painter. He has been a major and profoundly influential figure in popular music and culture for five decades. Much of his most celebrated work dates from the 1960s when he was an informal chronicler and a seemingly...
’s or The White Stripes
The White Stripes
The White Stripes was an American rock band, formed in 1997 in Detroit, Michigan. The group consisted of the songwriter Jack White and drummer Meg White . Jack and Meg White were previously married to each other, but are now divorced...
' entire catalogue”. Unlike many services, MySpace has been successful in making copyright deals with the RIAA's "Big Four", which is Sony BMG, Warner Music Group
Warner Music Group
Warner Music Group is the third largest business group and family of record labels in the recording industry, making it one of the big four record companies...
, Universal Music and EMI
EMI
The EMI Group, also known as EMI Music or simply EMI, is a multinational music company headquartered in London, United Kingdom. It is the fourth-largest business group and family of record labels in the recording industry and one of the "big four" record companies. EMI Group also has a major...
, in September 2008. In January 2009, MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
made partnerships with the following independent labels: Nettwerk
Nettwerk
The Nettwerk Music Group is the umbrella company for Nettwerk Management, Nettwerk Records, Nettwerk One Publishing, Nutone Records, and Artwerk. With over 150 employees, the Vancouver-based company has offices in New York, Los Angeles, London, Boston, Nashville, and Hamburg...
, INgrooves, Iris Distribution, RoyaltyShare, and Wind-up Entertainment. In March 2009, CNET News reported that there are more than 5 million bands with music on the streaming-and-discovery music service, and more than 100 million playlists have been created.
Pandora Internet Radio is distinctive from both YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
and MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
in that it offers consumers continuously streaming media
Streaming media
Streaming media is multimedia that is constantly received by and presented to an end-user while being delivered by a streaming provider.The term "presented" is used in this article in a general sense that includes audio or video playback. The name refers to the delivery method of the medium rather...
rather than non-continuous music, which makes it highly similar to terrestrial radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...
or television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
. However, it can be contrasted with radio
Radio
Radio is the transmission of signals through free space by modulation of electromagnetic waves with frequencies below those of visible light. Electromagnetic radiation travels by means of oscillating electromagnetic fields that pass through the air and the vacuum of space...
in that it offers music recommendation. YouTube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....
is similar to Pandora
Pandora
In Greek mythology, Pandora was the first woman. As Hesiod related it, each god helped create her by giving her unique gifts...
in that it also offers recommendation, but is distinct in that content is user-generated
User-generated content
User generated content covers a range of media content available in a range of modern communications technologies. It entered mainstream usage during 2005 having arisen in web publishing and new media content production circles...
.
A new type of service that has also become popular is sites that allow consumers to pay what they wish or pay by advertising on social networking sites. Sites like Noisetrade.com and comeandlive.com are examples of sites that sponsor artists and allow users to download music in exchange for advertising for the artist. Music is essentially free to users essentially costing only the time it takes to post information about the artist downloaded on facebook, Twitter, or email. Another example was the release of the most recent Radiohead album In Rainbows in which users could download the album and name their own price. The idea of pay-what-you-want music consumption is new, but catching on with users and growing.
Decline of analog, rise of digital
This trend has broader implications in the use of formats. It has been a trend in music, television, movies, and print.The Recording Industry Association of America
Recording Industry Association of America
The Recording Industry Association of America is a trade organization that represents the recording industry distributors in the United States...
(RIAA) reported data on the music industry’s sales by format
Audio format
An audio format is a medium for storing sound and music. The term is applied to both the physical recording media and the recording formats of the audio content – in computer science it is often limited to the audio file format, but its wider use usually refers to the physical method used to...
over the ten-year period from 1998 until 2007. The data in the table below is from the 2007 report.
Format Market share
Market share
Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 10-Year Change | 4-Year Change | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Full-length CDs | 74.8 | 83.2 | 89.3 | 89.2 | 90.5 | 87.8 | 90.3 | 87.0 | 85.6 | 82.6 | 7.8 | -7.7 |
| Full-length cassettes | 14.8 | 8.0 | 4.9 | 3.4 | 2.4 | 2.2 | 1.7 | 1.1 | 0.8 | 0.3 | -14.5 | -1.4 |
| Singles (all types) | 6.8 | 5.4 | 2.5 | 2.4 | 1.9 | 2.4 | 2.4 | 2.7 | 3.4 | 2.4 | -4.4 | 0 |
| Music videos/Video DVDs | 1.0 | 0.9 | 0.8 | 1.1 | 0.7 | 0.6 | 1.0 | 0.7 | 1.1 | 0.4 | -0.6 | -0.6 |
| DVD audio | NA | NA | NA | 1.1 | 1.3 | 2.7 | 1.7 | 0.8 | 1.3 | 1.2 | 1.2 | -0.5 |
| Digital Download | NA | NA | NA | 0.2 | 0.5 | 1.3 | 0.9 | 5.7 | 6.7 | 11.2 | 11.2 | 10.3 |
| SACD | NA | NA | NA | NA | NA | 0.5 | 0.8 | 1.2 | 0.0 | 0.6 | 0.6 | -0.2 |
| Vinyl LPs | 0.7 | 0.5 | 0.5 | 0.6 | 0.7 | 0.5 | 0.9 | 0.7 | 0.6 | 0.7 | 0 | -0.2 |
Note: These figures represent data collected only from RIAA member labels, which constitutes only a portion of total online music exchanged.
Statistical analysis suggests the large-scale change in distribution:
- Full-length CD distribution (by percentage of total music revenue) peaked in 2004.
- Between 2004 and 2007, Full length CD sales have experienced a linear decline of around 2% annually. During this time period, Digital Download has increased from 0.9% to 11.2%.
- Of the over 10% of total market growth taken by Digital Download, roughly 8% came from losses in Full-length CD sales.
- Full-length cassettes experienced the most loss (-14.5% market share) in the 10-Year period, although most of the loss (-13.1%) was experienced from 1998-2003. In 2007, they were outsold by Vinyl.
- As of 2007, only two formats had greater than 10% of the market: Full-length CDs and Digital Download.
- The ratio of digital to analog sales in 2004 it was roughly 1:99, but by 2007 it was roughly 1:9.
In 2008, physical album sales fell 20 percent to 362.6 million from 450.5 million, while digital album sales rose 32 percent to a record 65.8 million units.
| 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Record Store | 44.5 | 42.4 | 42.5 | 36.8 | 33.2 | 32.5 | 39.4 | 35.4 | 31.1 | 30.0 | % |
| Other Store | 38.3 | 40.8 | 42.4 | 50.7 | 52.8 | 53.8 | 32.0 | 32.7 | 29.7 | 28.4 | % |
| Record Club | 7.9 | 7.6 | 6.1 | 4.0 | 4.1 | 4.4 | 8.5 | 10.5 | 12.6 | 7.2 | % |
| TV, Newspaper, Magazine Ad Or 800 Number | 2.5 | 2.4 | 3.0 | 2.0 | 1.5 | 1.7 | 2.4 | 2.4 | 1.7 | 1.8 | % |
| Internet | 2.4 | 3.2 | 2.9 | 3.4 | 5.0 | 5.9 | 8.2 | 9.1 | 10.9 | 14.6 | % |
| Digital Download | NA | NA | NA | NA | NA | NA | 6.0 | 6.8 | 12.0 | 13.5 | % |
| Concert | NA | NA | NA | NA | NA | 1.6 | 2.7 | 2.0 | 1.5 | 3.0 | % |
Proliferation of formats
The advent of digital media has led to the sudden creation of many new music formats available to the average consumer. In 2003 there were less than 10 formats available, but by 2007 there were over 100. Today a single artist release can be packaged in multiple formats including video downloads, ringtones or mobile full tracks. As the International Federation of the Phonographic Industry (IFPIIFPI
The International Federation of the Phonographic Industry is the organisation that represents the interests of the recording industry worldwide. It is a not-for-profit members' organisation registered in Switzerland...
) notes:
Five years ago music distribution formats were numbered in single figures – today, they number in the hundreds…In the digital era, record companies are licensing music across a multitude of platforms, in scores of different formats and with hundreds of different partners.
MP3 players
Rise of MP3 players, which are consumer electronicsConsumer electronics
Consumer electronics are electronic equipment intended for everyday use, most often in entertainment, communications and office productivity. Radio broadcasting in the early 20th century brought the first major consumer product, the broadcast receiver...
devices that stores, organizes and plays audio files
Audio file format
An audio file format is a file format for storing digital audio data on a computer system. This data can be stored uncompressed, or compressed to reduce the file size. It can be a raw bitstream, but it is usually a container format or an audio data format with defined storage layer.-Types of...
. Some DAPs (digital audio players) are also referred to as portable media player
Portable media player
A portable media player or digital audio player, is a consumer electronics device that is capable of storing and playing digital media such as audio, images, video, documents, etc. the data is typically stored on a hard drive, microdrive, or flash memory. In contrast, analog portable audio...
s as they have image-viewing and/or video-playing support. The first mass-produced DAP was created in 1997 by SaeHan Information Systems, which domestically sold its “MPMan” player in the middle of 1998. In October 2001, Apple Computer (now known as Apple Inc.) unveiled the first generation iPod
IPod
iPod is a line of portable media players created and marketed by Apple Inc. The product line-up currently consists of the hard drive-based iPod Classic, the touchscreen iPod Touch, the compact iPod Nano, and the ultra-compact iPod Shuffle...
, the 5 GB hard drive based DAP with a 1.8" Toshiba
Toshiba
is a multinational electronics and electrical equipment corporation headquartered in Tokyo, Japan. It is a diversified manufacturer and marketer of electrical products, spanning information & communications equipment and systems, Internet-based solutions and services, electronic components and...
drive. With the development of a minimalistic user interface
User interface
The user interface, in the industrial design field of human–machine interaction, is the space where interaction between humans and machines occurs. The goal of interaction between a human and a machine at the user interface is effective operation and control of the machine, and feedback from the...
and a smaller form factor, the iPod was initially notable within users of the Macintosh
Macintosh
The Macintosh , or Mac, is a series of several lines of personal computers designed, developed, and marketed by Apple Inc. The first Macintosh was introduced by Apple's then-chairman Steve Jobs on January 24, 1984; it was the first commercially successful personal computer to feature a mouse and a...
community. In July 2002, Apple introduced the second generation update to the iPod. It was compatible with Windows
Microsoft Windows
Microsoft Windows is a series of operating systems produced by Microsoft.Microsoft introduced an operating environment named Windows on November 20, 1985 as an add-on to MS-DOS in response to the growing interest in graphical user interfaces . Microsoft Windows came to dominate the world's personal...
computers through Musicmatch Jukebox
Musicmatch Jukebox
Y!Music Musicmatch Jukebox, a remake of the original Musicmatch Jukebox made by Musicmatch, Inc., is an audio player that manages a digital audio library...
(now known as Y!Music Musicmatch Jukebox). The iPod series, which grew to include microdrive
Microdrive
Microdrive is a brand name for a miniature, 1-inch hard disk designed to fit in a CompactFlash Type II slot. The release of similar drives by other makers has led to them often being referred to as 'microdrives'...
and flash-based players, has become the market leader in DAPs.
Smartphones
The 21st century saw the birth of 3G enabled mobile phones3G
3G or 3rd generation mobile telecommunications is a generation of standards for mobile phones and mobile telecommunication services fulfilling the International Mobile Telecommunications-2000 specifications by the International Telecommunication Union...
, which enables network operators to offer users a wider range of more advanced services while achieving greater network capacity through improved spectral efficiency
Spectral efficiency
Spectral efficiency, spectrum efficiency or bandwidth efficiency refers to the information rate that can be transmitted over a given bandwidth in a specific communication system...
.
The key advantage of 3G enabled phones over MP3 players is their greater web integration. This enables users to readily access a far larger quantity of songs than MP3 player users can. For an MP3 player, songs must be stored before the user leaves their computer, but with 3G enabled phones the device is not separated from the source. It is projected that revenue from mobile media and entertainment (MME) services in the US will more than double during the next five years.
Consumer Genre Preferences in the U.S.
| Genre | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Rock | 25.2 | 24.8 | 24.4 | 24.7 | 25.2 | 23.9 | 31.5 | 34.0 | 32.4 | 31.8 | % |
| Rap/Hip-hop | 10.8 | 12.9 | 11.4 | 13.8 | 13.3 | 12.1 | 13.3 | 11.4 | 10.8 | 10.7 | % |
| R&B/Urban | 10.5 | 9.7 | 10.6 | 11.2 | 10.6 | 11.3 | 10.2 | 11.0 | 11.8 | 10.2 | % |
| Country | 10.8 | 10.7 | 10.5 | 10.7 | 10.4 | 13.0 | 12.5 | 13.0 | 11.5 | 11.9 | % |
| Pop | 10.3 | 11.0 | 12.1 | 9.0 | 8.9 | 10.0 | 8.1 | 7.1 | 10.7 | 9.1 | % |
| Religious | 5.1 | 4.8 | 6.7 | 6.7 | 5.8 | 6.0 | 5.3 | 5.5 | 3.9 | 6.5 | % |
| Classical | 3.5 | 2.7 | 3.2 | 3.1 | 3.0 | 2.0 | 2.4 | 1.9 | 2.3 | 1.9 | % |
| Jazz | 3.0 | 2.9 | 3.4 | 3.2 | 2.9 | 2.7 | 1.8 | 2.0 | 2.6 | 1.1 | % |
| Soundtracks | 0.8 | 0.7 | 1.4 | 1.1 | 1.4 | 1.1 | 0.9 | 0.8 | 0.8 | 0.8 | % |
| Oldies | 0.7 | 0.9 | 0.8 | 0.9 | 1.3 | 1.4 | 1.1 | 1.1 | 0.4 | 0.7 | % |
| New Age | 0.5 | 0.5 | 1.0 | 0.5 | 0.5 | 1.0 | 0.4 | 0.3 | 0.3 | 0.6 | % |
| Children’s | 0.4 | 0.6 | 0.5 | 0.4 | 0.6 | 2.8 | 2.3 | 2.9 | 2.9 | 3.0 | % |
| Other | 9.1 | 8.3 | 7.9 | 8.1 | 7.6 | 8.9 | 8.5 | 7.3 | 7.1 | 9.1 | % |
In the courtroom
- On December 19, 2008, the RIAA announced that it would stop suing file sharers, because the strategy is not working to stop the flow of illegal downloads. Instead, the RIAA is trying to work with ISP's to prevent P2P piracy. "The decision represents an abrupt shift of strategy for the industry, which has opened legal proceedings against about 35,000 people since 2003".
- On June 18, 2009 CNET News reported Jammie Thomas-Rasset was found guilty of willful copyright infringement in a Minneapolis federal court and must pay the recording industry $1.92 million. This legal battle, Capitol v. ThomasCapitol v. ThomasCapitol v. Thomas was the first file-sharing copyright infringement lawsuit in the United States brought by major record labels to be tried before a jury. The defendant, Jammie Thomas-Rasset, was found liable in a 2007 trial for infringing 24 songs and ordered to pay $222,000 in statutory damages...
, marked the first time the recording industry has argued a file-sharing case before a jury. - In France, a new law regarding illegal downloading, called HADOPI, is being debated. If passed, it would force the Internet provider to shut down the subscription while still receiving monthly payment. This double punishment is highly criticized.
In politics
- On January 5, 2009, president-elect Barack ObamaBarack ObamaBarack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
appointed Thomas J. PerrelliThomas J. PerrelliThomas John Perrelli is an American lawyer and the United States Associate Attorney General. Perrelli also served as Deputy Assistant Attorney General of the United States in the late 1990s.-Early life:...
to the position of United States Associate Attorney GeneralUnited States Associate Attorney GeneralThe Associate Attorney General is the third-ranking official in the United States Department of Justice. The Associate Attorney General advises and assists the Attorney General and the Deputy Attorney General in policies relating to civil justice, federal and local law enforcement, and public...
. Tom Perrelli represented the RIAA in a slew of cases, including a high-profile bid to unmask file sharers without the requirement of a judge reviewing the evidence first. Barack ObamaBarack ObamaBarack Hussein Obama II is the 44th and current President of the United States. He is the first African American to hold the office. Obama previously served as a United States Senator from Illinois, from January 2005 until he resigned following his victory in the 2008 presidential election.Born in...
's selection of Joe BidenJoe BidenJoseph Robinette "Joe" Biden, Jr. is the 47th and current Vice President of the United States, serving under President Barack Obama...
as vice presidentVice presidentA vice president is an officer in government or business who is below a president in rank. The name comes from the Latin vice meaning 'in place of'. In some countries, the vice president is called the deputy president...
showed that the presidential hopeful was comfortable with someone with firmly pro-RIAA views. Biden urged the criminal prosecutions of copyright-infringing peer-to-peerPeer-to-peerPeer-to-peer computing or networking is a distributed application architecture that partitions tasks or workloads among peers. Peers are equally privileged, equipotent participants in the application...
users and tried to create a new federal felonyFelonyA felony is a serious crime in the common law countries. The term originates from English common law where felonies were originally crimes which involved the confiscation of a convicted person's land and goods; other crimes were called misdemeanors...
involving playing unauthorized music.
In video games
- In the video game industry, the music category overtook the sports category as no. 2 top category in sales, behind action. 58 percent of players played music games, second only to 65 percent who played action games. About 50 percent played sports games, down from 55 percent in 2007 and 62 percent in 2005. The video game industry was worth $22 billion in 2008.
- Guitar Hero III: Legends of RockGuitar Hero III: Legends of RockGuitar Hero III: Legends of Rock is a music video game, the third main installment in the Guitar Hero series, and the fourth title overall...
, which launched in 2007, has become the first single game to surpass $1 billion in sales. The announcement came during a CES keynote by ActivisionActivisionActivision is an American publisher, majority owned by French conglomerate Vivendi SA. Its current CEO is Robert Kotick. It was founded on October 1, 1979 and was the world's first independent developer and distributor of video games for gaming consoles...
Publishing CEO, Mike GriffithMike GriffithMike Grenville Griffith, born at Beaconsfield, Buckinghamshire on 25 November 1943, was a cricketer who played for and captained Sussex. A middle-order right-handed batsman, he also kept wicket occasionally....
, and follows an announcement that the entire franchise had broken the same mark a year ago. Griffith said that Guitar HeroGuitar HeroGuitar Hero is a music video game developed by Harmonix Music Systems and published by RedOctane for the PlayStation 2 video game console. It is the first entry in the Guitar Hero series. Guitar Hero was released on November 8, 2005 in North America, April 7, 2006 in Europe and June 15, 2006 in...
s monumental success has trickled down to other industries, most especially the struggling music industry. According to Griffith, sales on everything connected to Guitar HeroGuitar HeroGuitar Hero is a music video game developed by Harmonix Music Systems and published by RedOctane for the PlayStation 2 video game console. It is the first entry in the Guitar Hero series. Guitar Hero was released on November 8, 2005 in North America, April 7, 2006 in Europe and June 15, 2006 in...
, from musicMusicMusic is an art form whose medium is sound and silence. Its common elements are pitch , rhythm , dynamics, and the sonic qualities of timbre and texture...
to real guitarGuitarThe guitar is a plucked string instrument, usually played with fingers or a pick. The guitar consists of a body with a rigid neck to which the strings, generally six in number, are attached. Guitars are traditionally constructed of various woods and strung with animal gut or, more recently, with...
s, has gone up.
See also
- Comparison of online music storesComparison of online music storesFor streaming services, see list of online music databases.The following table lists online music stores that carry a selection of songs by many record labels and artists. The stores listed below access passive databases and require access through a computer or some allow access and downloads...
- Comparison of portable media playersComparison of portable media playersThe following comparison of portable media players compares general and technical information for notable digital playback devices.- General :- Technical specifications :- Syncing and transfer :- Wifi Connectivity :- Audio formats :...
- Digital Rights ManagementDigital rights managementDigital rights management is a class of access control technologies that are used by hardware manufacturers, publishers, copyright holders and individuals with the intent to limit the use of digital content and devices after sale. DRM is any technology that inhibits uses of digital content that...
- File SharingFile sharingFile sharing is the practice of distributing or providing access to digitally stored information, such as computer programs, multimedia , documents, or electronic books. It may be implemented through a variety of ways...
- List of portable media players with Wi-Fi connectivity
- Loudness warLoudness warThe loudness war or loudness race is a pejorative term for the apparent competition to digitally master and release recordings with increasing loudness.The phenomenon was first reported with respect to mastering practices for 7" singles...
- Music in the 2000s
- Music industry
Online music stores
- RIAA
- Satellite RadioSatellite radioSatellite radio is an analogue or digital radio signal that is relayed through one or more satellites and thus can be received in a much wider geographical area than terrestrial FM radio stations...
- User-generated contentUser-generated contentUser generated content covers a range of media content available in a range of modern communications technologies. It entered mainstream usage during 2005 having arisen in web publishing and new media content production circles...