Thursday, 10 January 2008

Is there a need for the big players of the music industry in the future?

It is rather obvious that the big record labels that have been ruling the music industry is not up to date with the demands of today's customers. The major players of the music industry (eg. the major record labels) seem to have an idea of themselves as prerequisites for a commercial supply of music. However, with current technology, such as computers and internet, dramatically cutting cost for recording and distribution of music this is not the case.

Today even small band can reach massive audience by internet marketing, this could be accomplished by sites built around users sharing information, often referred to as web 2.0. Proof of this is the phenomenal outreach of sites such as Youtube and Facebook. Furthermore, in a world where (digital) distribution of music is very cheap, everyone can make a song available for download.

So where should the big recording companies go to keep their power?

A hard question, one which I cannot answer. However, I have a few thoughts. A solution like Itunes is definetely one thing I see for the future, but (actually a big but) Itunes has serveral major flaws:
  • It requires downloading of a client. A future solution should be web based.
  • The file format is strange. You cannot do what you want with your downloaded music, it is even hard to find the files and use them outside of itunes or ipod. A more straightforward file management is needed.
  • It is too expensive. I believe it should cost maximum half of the cost at itunes, preferably free. This could be accomplished with efficient advertising.
The digital solution brings some where attractive possibilities:
  • To show the users new artists / music, for example via a service showing "if you like this band, then you might also like...".
  • Accesability, the possibility to keep larger library of music, which can be searched in easily. Also because of the low storage and distribution costs, a song or album needs to be sold much fewer times for it to be ecnomocially feasible to offer for the record label.
The record industry might be under pressure and far behind when it comes to keeping up with technology advances. But I believe the big record labels will still be around in 10 years, although their form might have changed a bit. Much of this could also be applied to the movie industry, which are to a large extent interconnected with the music industry. I guess the bottomline is, the record companies cannot make any money if all the customers have moved on to another market and to another technology.

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