How Is the Music Industry Being Affected by iTunes - Coursework Example

How is the music industry being affected by iTunes and other services that allow sto buy individual songs as opposed to entire albums? Picture a life without music. I am sure you will not be able to imagine a life without it. Music is something that we come across quite frequently and it is an important part of our lives. Friedrich Nietzsche wrote in a letter addressed to Peter Gast in 1888 ‘Life without music is simply an error, a strain, an exile.’ This shows how important Nietzsche, the famous German philosopher, considered music to be in the life of an individual (Stambaugh 27). The contemporary world has seen a great change in the music industry with the advent of the Internet and the facility to download individual songs rather than buying whole music albums from the neighborhood’s music shop. The fact is that the Internet has added a new dimension to the music industry business. According to Joshua Friedlander, vice-president of RIAA, ‘There have been a lot of changes over the past 10 years, in which the industry is adapting to consumer demands of how they listen to music, when and where, and we’ve had some growing pains in terms of monetizing those changes’ (Stolpmann 7). Gone are the days when people used to buy cassettes or records of their favorite artists. They were replaced by CDs and DVDs however now these are also growing redundant as people are switching to downloading or buying music albums or songs online. ITunes and other services such as Amazon MP3, Napster, Zune Marketplace and Rhapsody have changed the landscape of the music industry however in my opinion the music industry was on a decline before these services emerged and their impact with regards to providing relief to the industry has not been very significant (though I agree that the launch of such services is a step in the right direction for the industry). Although I agree that instead of buying the whole CD just for one song people nowadays prefer buying their favorite single. Previously people were forced to buy the whole album of a particular artist or band on CD if they liked a particular song however now people have the choice of buying only the song they prefer instead of the whole album. This means that people save on their cost and can buy many more such singles instead of wasting their money on just a single album, whose songs they will hardly listen to except for that one song. Hence services like Amazon and iTunes allow people to choose amongst various songs from a plethora of songs in their database. With services such as iTunes, music has become increasingly accessible for the consumers. It is now very easy to transfer your favorite song to your handheld device allowing you to listen to your favorite song on the go. Instead of going to the neighborhood’s music shop to buy the album that had your favorite song now you can just sit at home and buy your favorite song online. Artists who worked hard on making their whole album a success are at a disadvantage as others can easily steal their spotlight by introducing their one single hit and then disappearing into anonymity. This has no doubt led to a decline in the artists’ creativity as we no longer see albums with all the songs that were a hit. On the other hand however, there has been an increase in the sale of individual songs because they are cheaper than the whole album. In fact by 2010, iTunes had sold 10,000,000,000 songs and the online music store is still going strong with consumers buying thousands of songs from the iTunes store every day. However the increase in sales does not add that much in revenue that it can offset the decline in revenue from the fall in sales of music CDs. In a study conducted by Elberse, she found out that for every one percent rise in the consumers who shift to buying music online there is a six percent drop in the sale of albums. Sales of a ‘mixed bundle’ (the album plus its single) fell from $15000 in 2005 to just $7000 in 2007 (a staggering 50% decline in 2 years). Although the record companies are selling a lot of songs they still don’t make half the revenue because now people have the choice of buying the individual song rather than the whole album (Berinato). Record companies need to understand that selling CDs to consumers will be extremely difficult in the future and they must concentrate on generating more individual song sales by collaborating with AmazonMP3, iTunes and other services. Even after the all the lawsuits and laws passed with regards to music copyright, piracy still remains a big thorn in the bush for record companies who lose out on a large part of their revenue because consumers are able to buy the songs they want to listen to for free. In 1998, with the appearance of P2P networks like Napster and Kazaa one could easily copy and distribute music freely over the Internet. This was a major blow to the music industry as it adversely affected the revenue of the industry and at that time the issue of violating copyrights came to a forefront. At that time computer storage was increasing, music was becoming more and more accessible (and free). Hence consumers of the industry were attracted more towards digital music obtained through Napster or Kazaa and with the almost unlimited storage at their disposal computer users were able to stuff their hard drives with voluminous amount of music which was almost free. The music industry decided to combat the threat of P2P networking and in 2001 it was successfully able to close down Napster’s operations. Despite all the efforts of the music industry, people are still involved in piracy and are downloading music online for free. There are torrents through which one can buy whole discographies of their favorite bands or artists. Between the years 1998 to 2003 music piracy is estimated to have cost the industry $6 billion (Baldauf and Stair 330). I believe there is nothing wrong if people are able to copy or download online music for free. This is my opinion and others may not share the same view as mine. I recently downloaded discographies of Queen, Beatles, Elvis Presley and Michael Jackson. When I tried buying their CDs on a record store I found that the whole collection was not available and why should I waste my time and money by going to the store and paying to buy these when I can get them for free from the Internet. Although the emergence of iTunes music store has led to a reduction in piracy as many people buy songs through services such as AmazonMP3, iTunes or Zune Marketplace however music piracy still exists and the rate may be as high as 95 percent (Hendricks 111). The point I’m trying to make here is that despite all their efforts, the music industry will be impacted by piracy as people like me will continue to buy music for free through torrents. I agree that Apple’s decision to launch an online store for music, on 28th April 2003, was a positive step for the music industry. In its first year in operations the store sold approximately 70million songs. When it was launched iTunes faced a formidable task. Although Napster was shut down, Kazaa and other file-sharing sites were still operational and it was easy to copy music. There had been efforts in the past to launch a service similar to iTunes in MusicNet and Pressplay however they had no significant impact. However the sale of 70million songs showed that there still existed a market for paid online music (Waters). Five years after its launch, iTunes Music Store had become the leading vendor for music in US. Apple has more than 70% market for music downloads and has a monopoly in this market. Currently there are more than 14,000,000 songs in its database with more songs being added all the time. However iTunes’ success should not give us a false impression that other services are performing on the same level as iTunes. Despite the phenomenal success of iTunes, the music industry is still on a decline. In 2000 record sales were valued at $14 billion in the US. By 2003 the value had fallen to $11.8 billion and in 2007 the sales figure had dropped to a further $10.4 billion. As mentioned earlier the decline in sales revenue is because of the fall in demand of music albums and the lack of revenue generated from the sale of online music to compensate for this fall. Although I believe that the launch of such services is a significant step more needs to be done to boost the declining music industry. These services are still relatively new with iTunes being launched in 2003 and AmazonMP3 in September 2007. In the future these services may be able to have a more significant impact on the music industry (The iTunes Business Model and its Widespread Effects). However the biggest criticism that I have against the music industry (and which I believe is the reason for its decline) is that the music industry has become too commercial. Nietzsche in his letter labeled music as an essential part of life. However the definition of music for Nietzsche was completely different from what we consider music to be now. Music is a form of art. In Nietzsche’s time music was considered to be an art. Artists produced music not because they wanted money for it but they loved producing music and people valued it and paid for it. No wonder that there were artists such as Beethoven, Wagner, Brahms, Berlioz, Schumann and Listz who were famous for the music they produced. There have been other notable bands that were famous for their music such as Queen, The Beatles, The Hollies and artists such as Elvis Presley, Frank Sinatra and Jimmy Hendrix among others. However now we idolize the likes of Justin Bieber, Rebecca Black, Miley Cyrus (no offense to their fans world over) among others whose singles top the music charts all over the world. With time the essence of music has been lost. The blame largely falls on the society, that is, us who crave to listen to commercial music and this has led to a decline in the music industry (when I say decline in industry I am not viewing the monetary aspect but I refer to the fact that music is losing its essence). The music industry is changing. There is a vast difference of the type of music in Nietzsche’s time and our time. Due to the changes in technology there has been a shift in how music was distributed from cassette tapes to CDs to online buying through online stores. No longer are people forced to buy the whole album just to listen to their favorite songs. Although there is a decline in the industry’s revenue I believe that such a decline is only temporary and revenue will continue to rise once services such as iTunes, Napster and AmazonMP3 have a more significant impact on the music industry. Piracy also plays an important role to reduce the revenues of the music industry by providing songs to consumers for free. Record companies need to adapt to the changing landscape of the music industry and adopt new business models in the industry if they want to succeed. In the end I would reiterate my point that although the introduction of iTunes and others services is a step in the right direction however the music industry is still on a decline due to the lack of impact these services have on the industry. The music industry is one among those few who are having trouble in generating profits its transition to the digital media (Wiechmann 1). References: Baldauf, Kenneth J., and Stair, Ralph M. Succeeding with Technology. Cengage Learning, 2008. Berinato, Scott. The iTunes Effect and the Future of Content. Harvard Business Review. January 12, 2010. November 8, 2011 Hendricks, John A. The Twenty-First-Century Media Industy. Lexington Books, 2010. Stambaugh, Joan. The Other Nietzsche. SUNY Press, 1994. Stolpmann, Jan-Patrick. Monetizing Intellectual Property in the Changing Music Industry. GRIN Verlag, 2011. The iTunes Business Model and its Widespread Effects. January 28, 2011. November 8, 2011 Waters, Darren. “A Year of Revolution for iTunes.” BBC News Online. April 28, 2004. November 8, 2011 Wiechmann, Daniel. The Impact of Online Music Services on the Music Recording Industry: Opportunities and Challenges. GRIN Verlag, 2009. Read More