Digital Media Worlds The New Economy of Media
Digital Media Worlds tracks the evolution of the media sector on its way toward a digital world. It focuses on core economic and management issues (cost structures, value network chain, business models) in industries such as book publishing, broadcasting,
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For centuries music used to be performed live by folk musicians and travelling troubadours or under patronage and supported by the aristocracy and churches. During the 19th century, modern, industrial work processes and technologies began to shape the music market, and music grew from a live performance practice into an industry. The music industry began as an industry of publishers who contracted composers and lyricists to produce songs that could be performed at concerts, vaudevilles, opera houses and music halls and whose sheet music could be edited and sold to private persons to be played at home. This industry was totally transformed when, by the end of the 19th century, new recording techniques and the gramophone were invented and introduced to the market by Edison, Columbia and Victor. The music industry’s core product changed from printed sheet music to shellac discs. First these were mainly used to promote the sale of gramophones, but gradually the manufacturing, recording and promotion of music itself became the industry’s core product. The role of publishers changed to administering composers’ and lyricists’ copyrights and collecting royalties from the sales of records and other kinds of music licensing (Wikström, 2010; Hull et al., 2011). Major changes in popular music followed from technological developments that made it possible to disseminate music to consumers on a larger scale or with better sound quality: sheet music, phonographs and jukeboxes followed by gramophones, recordings on LP, tape, compact disc (CD) and mp3. Digitization entered the music industry in the 1970s when digital technologies were introduced for producing and recording music. In the 1980s, with the introduction of the CD, these technologies extended to the field of distribution. In the 1990s and 2000s Internet technologies gained a major impact, by supporting all activities in 133
10.1057/9781137344250.0017 - The Music Industry, Andra Leurdijk, Ottilie Nieuwenhuis and Martijn Poel
Copyright material from www.palgraveconnect.com - licensed to University of Toronto - PalgraveConnect - 2014-12-22
Andra Leurdijk, Ottilie Nieuwenhuis and Martijn Poel
the value chain, from talent scouting through production, promotion, distribution and consumption. This chapter addresses the roles, strategies and position in the value chain of users, artists, record companies and providers of online music services in the past two decades. The first section sketches the major global market developments, while the second focuses on the European market and shows the economic meaning of the music industry in terms of employment, the number of firms and value added. The third section deals with the consequences of market developments for the value network and the reallocation of roles between main actors in the value network, stressing the role of new entrants. In the Conclusions, we try to assess which market players have gained or lost from market changes.
Market developments The global market Like most other media and content sectors, the music i
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