The Role of Competition in the Music Industry - Essay Example

The Role of Competition in the Music Industry Student Institution affiliation Date Introduction This article begins by looking at various players in the music industry. It examines the actual people that have made the business to expand and how their rights can be protected from piracy. In addition, how deferent people define what constitute this carrier; it may refer to musicians, music engineers or remixes. In general term, a producer is an overall manager that plays the role of recording, mixing and mastering process (Shepherd 2009). The manager has the general vision of the music to be produced, the sound, the aim of the project, and creating a distinct perspective that will inspire, enable and provoke the performer. The producer should have the ability to make a good record that is more than the overall parts. Each producer should be creative in his or her own way so as to bring unique skills, approach and end results. In this essay we will look at different production managers and the role they play together with the creativity needed in their field of specialization. The music engineer People always confuse this with a classic record producer- who is in charge of mixing desk, looks at compression settings, reverb tail and drum sounds (Shepherd 2009). The producer’s studio is like a work shop with instruments that he uses in a virtuoso, extending his working hours so as to come up with a unique sonic masterpiece. The Mentor A large number of producers don’t have the right to technical expertise in the music. Even though they are audiophile, they don’t work at the recording desk, but can only choose the mix engineer to help them work out their projects. A good example is Rick Rubin who is a self –confessed audiophile (Shepherd 2009). Music mentors role focuses on artist’s intent, providing moral and improving his or her performance. They coach artist to have the best quality of music in accordance to their capability, using the available means possible. Rubin is one talented guy who can inspire and invigorate an artist and help them re-focus on their core strength (Shepherd 2009). The musician This is the least recognized skill in the music industry but the main fundamental musicality skill required. The producer can only comment, add value to the music, advice the songwriter and the artist on arrangement and how the performance is going to be done. Some producers are also musicians themselves. Some of the producers may have a role to play on the music they have worked on like Daniel Lannois who played the part of guitarist in the U2s Joshua Tree. Another multi-instrumentalist called Trevor Horn, almost worked on every part of Frankie Goes to Hollywood’s “Welcome to the Pleasure dome” album (Shepherd, 2009). Songwriting Apart from music production, another genre in the music industry is songwriting. In addition, the role of a composer is very important in this business because without him there is no music to produce. This the person that studies what the market require, which artist can bring out the massage content in the paper musically and on what topic to handle. The songwriter bears the copy right of the song since it’s his own creativity. The role of competition in music industry This industry is a major export sector that has grown rapidly over the years. This is due to its uniqueness in creative expression and the intangible asserts connected to it. Ones intellectual ability plays a basic function in evaluating its performance. Some countries like Brazil and India have recognized the economic export value of this business that has helped them in developing their culture. However, in the 3rd world countries, little has been done to evaluate its economic prospects hence their policy makers are reluctant to accord it full credentials. In trying to address this problem, some measure like enforcing copyright has been put in place. A discussion on the technological change has also come up that helped to move from conventional neo-classical point of view. These changes have been incorporated into learning institutions, and enhanced relation between music producers and consumers of the technological knowledge. The major focus area has been on the intellectual property in the industrial research and development. This is an area where patent right is the main role (Andersen et. al. 2000). The reason of this research is to how audio-visuals production is related to rent creation more than traditionally manufactured goods. Specifically refer to institutional methods and the copyright. In addition to that we look at the duties carried out in this business sector; in the developing countries where the copyright policies are weak, the need to become competitive diminishes. The world wide music business Music is a talent based on creativity and is a highly preserved asset. The origin of the modern music industry can be traced back to the twentieth century when there was a technological breakthrough. This led to music recording production rather than relying on traditional performance. The present state of music industry is due to increase income and individual experience that was seen in the post war period and mainly the rising financial independence of the new generation. In 1950s, the industry was majorly dominated by US economy with record sales of five hundred million dollars. By 1998 more than four billion sales records was made, generating an income of about four hundred and thirty-nine billion dollars. To add to this pirated sales record earned five billion dollars (Ricardo 1981), Music also got tied to other entertainment media like TV, films and video thereby generating more income. Europe and North America are the major players that dominate the music market worldwide. Their sales record covers around one third of total global sales. In the Asian market, the dominant player is Japan. However, the 3rd world countries show growing sales in the music economy. For instance, the rise in sales in the Latin America was at eight percent each year over the past period, and this is projected to rise to ten percent in the next five years to follow. In Africa, the sale is still low, but analysis projects it to improve in the subsequent periods. Historically, the music business has been volatile. The unpredictable nature of the demand market results in non-price factors like fissionability, herd behavior, and experiment carried out have had profound influence in the music business (Andersen et. al. 2000). Incorporating and channeling these impact brought considerations to the major firms in the industry and a growth in investment strategies. The supply analyst shows that the technological advancement brought better and affordable means of delivering the music products to people. Technology led to emergence of new commodities form the music industry into the market. The change in the technology also led to monopoly of the music market by large firms that tend towards high levels of concentration through vertical integration (Fink 1989). From mid 1960s, some small major players in the international market have concentrated the growth in the music industry. Current estimate of seventy-five percent of the worldwide market shows that it is controlled by five big media houses. These giant media firms are BMG, EMI, Music, Polygram, WEA Group, and Sony Music (RIAA 1998). These corporations are highly diversified, with a revenue income between 10% and thirty-three per cent that is generated from the global income. These firms practices oligopolistic business that help them maintain their top position in the music industry. This behavior enable them to acquire huge sums of capital giving them the ability to take risk and cost associated with the indentifying and nurturing new artistic talent that may arise in the market. They are able to venture into marketing a risky product that requires large capital. Despite the industry being dominated by large player, there still exist small independent and differentiated firms that provide various services to the market. Some of these independent record firms operate by controlling a specific business niche in the market such as classical, R&B, county & western and jazz (Andersen et. al. 2000). Noticeable, these companies have served by creating alliance with the bigger players in the market. Another method of survival is by subcontracting production with companies with different sizes. There exist several recording studios with most producers preferring to subcontract their businesses with large firms. Independent companies are closer to the artist there by limiting big firms ability to be creative and experiment, and this is the main area that supports the music business sector. According to Andersen et al. (2000), continued role for large numbers of highly specialized companies demonstrates the geographical spreading of this business in a small number of main towns, for instance the major cities found in United States and Europe. The justification for this is the professional skill advantage that songwriters and musicians have that they can acquire from relating to the closely knit community of talent (Andersen et al. 2000). When looked at the industry point of view, it reflects the necessity for already made supply of some assets and an up hand of working with close communication. In these areas, trust has to be established like between artist and his or her producer. This system can also be observed in large firms since they need close connections and good understanding with the financial markets. This encourages a bond of oneness to grow between the borrowing company and the creditor. This is mostly applicable where large and risky investment project is involved. The effects music competition in talent and rents In the period of 1990s was marked with a change in the ease of doing music business globally. This was due to a shift towards technological advancement, that was majorly on widespread incorporation of new ideas and digital technological advancement. These changes concurred with the ongoing structural development seen in the European economic markets, particularly with the rising service economy. These developments were geared toward the basic use of ideas together with other intangible assets in underpinning competition processes in today’s globalizing world (Andersen et. al. 2000). The long-standing view and valuating the demerit associated with the size and impact addition of service activity in the economy complicate this role. The significance variation in this role is also a factor. The unpredicted nature of this economic idea makes it more tiresome. An idea that can be used jointly and together with its output that involves a reasonable fixed cost always has qualities of a good economic value. Because of this importance the owner of the idea can unlock the public from accessing it, opening the likelihood for the general economic exploitation. The price of a property right should be higher than its marginal cost and this should lead to a rise in rents. Consequently, since the price of a non-rival commodity is measured in size of their economic value, the need to expand an idea’s market importance should also be put in place. However, the problem that arises is that an idea that has a large market base is prone to piracy. This leads lower marginal cost in producing an idea and its distribution price. The main problem is seen mostly in production of cultural ideas that are expressed in tangible form, like sound recording, a written book or film. These products are usually produced within a short time and their rapid economic growth is the basic to effective rent creation. Some special investment made in order to promote an artist’s idea and establishing him or her always undermines such progress. Moreover, due to the nature of their idea being produced cheaply and easily, they are normally prone to piracy. This will affect the economic outcome from the investment made on them to produce their products that will be able to pay for the fixed cost and compensate the high degree of economic fluctuation. The external short comings that arise from the nature of this idea complicate effective organization of this business. The value of an idea in which ever stage needs to be carefully examined before releasing it to the market, as some unforeseen shortcomings may lead to improper coordination of this effort. Getting a good means to manage and protect ones creativity is an important consideration of producers. In addition, for one to make a good cultural idea, he or she needs to continuously borrow and test with already existing ones. In doing so, it requires creativity for the cultural work to flourish (Ricardo 1981). In the case where it is to be used jointly and limits need to be put in place. The cut down on cost and non-completive valuing, risk associated with it and fluctuation in market are the cultural features of the industry. Therefore strong institutional frame work including copyright plays a very important function in streamlining the work of this business sector. This system arises due to need to cut down on transaction cost, to avoid over pricing of the intangible resources. Nevertheless, this is the main duty of rent that creates problems too much economic analysis is the fundamental feature in understanding of audiovisual industries (Andersen et. al. 2000). The pricing of an idea based on rent rates was borrowed from a scholar Ricardo, who gave rent pricing to land use. He demonstrated that the pricing of land is based on its availability and need. This is where economist borrowed the idea of pricing other resources based on rents. These resources include things that are scarce to acquire like in the music industry which depends mostly on ones talent. In music industry, the talent is always fixed but the service rendered is of high value. Any income from this business would be equated to that good like land rates that are highly affected due to its limitless for its basic need. Some economist opposed the theory that land fall under a unique resource; hence, they came up with the theory of quasi-rent. This suggested that, as supply of some commodities was vibrant to price in common terms, which only changes after a period of time. And that as many items can gain rent, they were bound stay for just a short time before new ones get their way into the market (Ricardo 1981)Marshall showed that one’s natural talent can make him to gain a unique surplus income that cannot be compared to same investment made on education. This argument led to equating income earned from talent to that gained from land. Marshall noticed the exceptional qualities of a worker and manager in normal production output, in such companies, like the audio-visual. These require creative effort that cannot be complimented to labor and any other assets of input, but normally determines the degree of output created. The invent of rent may lead to an important part in transforming the business performance (Andersen et. al. 2000). Conclusion The creation of copyright has helped greatly in dissemination of one’s original work through modern economic activities. It enables a frame work where they can effectively manage short coming generated in carrying out combined consumption and discrimination of such activities. Therefore, they serve more than being a protective mechanism of an intellectual idea. In real sense they work in conjunction with the organization setup that facilitates the determination of product market value. It also helps to predict the service income generation. References Andersen, B Wright, R & Wright, Z. (2000), Copyrights, competition, and development, the case of the music industry, Geneva: United Nations Conference on Trade and Development. Fink, M (1989), Inside the Music Business, New York: Schemer Books. Ricardo, D (1981), On the Principles of Political Economy and Taxation, Cambridge: Cambridge University Press. Shepherd, I (2009), what is music production, production advice. Journal, Cambridge: Cambridge University Press. Marshall, A & Guillebaud, C (1961), Principles of economics (9th (variorum) Ed.). London: Macmillan for the Royal Economic Society. Read More