Changes In the Music Industry Part 2

These days’ popular big bands that are already established are making far less money on royalties. Today most major bands are making money from shows and tours. There are still big bucks to be made by big named groups and bands going on tour. They make a lot more money from this than recording new music. The reason why they still record music is because they are working on building and keeping a fan base for their tours.

Companies are starting to promote big acts because of the money to be made. Pepsi has promoted Justin Bierber. Ticket prices are skyrocketing too. I remember in the 80’s ticket prices being around 15 to 20 dollars per seat. These days it is not unheard of to pay anywhere from 100 to 200 hundred dollars for concert tickets and in some cases those are the cheap seats. So how did this all happen?

Websites like Napster started a revolution in the 90’s. People logged on and downloaded music from other computers that were connected into Napster’s network. People shared and downloaded music with each other. This was possible because of a new file sharing technology and a new file format called MP3. As downloading increased CD sales dropped. This led to a major loss of revenue for the record companies and as a result they have launched an all-out war against the consumer.

The recording industry has filed many lawsuits suing everyone from single mothers to teenage girls for illegally sharing music files. Some Recorded companies have even folded and new smaller startups have tried to enter the market. Record companies were able to get download information for those sharing music files from the courts. By going after the individual the record companies feel they can put a stop to piracy through fear and intimidation.

This has only served to infuriate the consumer. Even people who do not download illegally have been upset by this. They have been made targets as well. After five years of suing everyone the recording industry has dropped the legal campaign that has ensnared 35,000 individuals. Instead, an industry group is making deals with Internet-service providers to warn those sharing music files via the internet and email. This is according to articles that have appeared in the Wall Street Journal. This new strategy also eliminates the need for ISPs to disclose their customers’ identities to the RIAA. This was a controversial aspect of the litigation strategy.

In the past record companies took a very hard line against consumers. This helped lead to the rise of websites like iTunes and CD Baby. The industry has even argued that making a personal copy from a legally purchased CD is illegal. At the Thomas trial in Minnesota, Sony BMG’s chief of litigation, Jennifer Pariser, testified that “when an individual makes a copy of a song for himself, I suppose we can say he stole a song.” Copying a song you bought is a nice way of saying ‘steals just one copy.”  This is not a violation of copyright law! You are allowed to make backups of material you purchased for the sake of preservation.

Lawyers for consumers have pointed to a series of court rulings over the last few decades that found no violation of copyright law. The Recording industry’s legal crusade against its customers is a classic example of an old media company clinging to a business model that is outdated an on the verge of collapsed.

At issue is whether customers may copy their CDs onto their computers. This is an act at the very heart of the digital revolution. The Recording industry has a murky legal foundation. The RIAA’s own website has declared in the past that making a personal copy of a CD that you bought legitimately may not be a legal right. They are wrong. As a result of this the consumer has turned away from buying music on CD altogether. The damage has been done and CD sales would drastically drop over the years on into the new millennium.

What has all this push back from the music industry really accomplished? It has made the consumer abandon CD sales in favor of online downloads from sites like iTunes, Amazon and CD Baby. As a result the independent musician can now display their music thus competing with the major labels. It has leveled the playing field. This was something that was unheard of in the 20th century. Of course this further serves to reduce music sales for the major labels.

Legal online downloads have not helped the CD. iTunes and other legal sites that pay royalties have contributed to the death of the CD. CD players are getting harder to find and the whole thing seems to have gone the way of the dodo. All of this has been leading to the slow death to many of the major record companies. The industry has gone through a transformation that is still going on.

Companies like BMI and ASCAP are tasked with collecting royalties on behalf of musicians and record companies. They are requiring licenses for any business playing copyrighted music from any of their members. Even automated phone services can be sued for playing a copyright song without paying the royalties. Bar owners can be in trouble if a band comes to perform and copyright music is played.

Online Radio stations like Pandora seem to make owning MP3s and CDs obsolete and now the average consumer seems to feel a sense of entitlement to music. All of this means that a slow death is coming to the record industry, but instead of adjusting the business model the RIAA has fought it off as long as they could. They seem to be lashing out at the very consumers that helped established them as a viable industry. Caught in the middle are the recording artists and musicians. They are the ones who will suffer in lack of royalties. Now new musicians must think outside the box in order to survive. The option left to established recording artists seems to be tour or retire.

All that being said this does not mean you cannot make money in music. Just know that if you enter this industry then you will need to provide a product. That product is you! So why would anyone buy you? The answer is simple. Marketing! Proper marketing will sell good products and even bad products for a while. We will talk more about ways to market yourself and ways to make money in this industry. We are going to cover ways to market your music and yourself and several ways to make money.

As a local musician you can still make money, but you got to be smart. You got to market yourself. You’ve got to think outside the box. There are no long-term guarantees for this choice in profession. We will cover ways to make money as we examine this volatile industry. Let’s look at the basics of what you can do. In the next chapter we will cover basic ways you can get started.

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