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History of Musical content:
- Since the late 19th Century Musical content has traditionally always
been distributed physically, starting when Thomas Edison invented the
Phonograph, which allowed music to be recorded on to a physical
cylinder and played back through a large horn (Albright, 2015).
(Phonograph, n.d.)
- Following this development an early interpretation of the flat “record”
that we all recognise now was introduced and this stuck throughout the
20th century. It has been claimed that the development of this way to
consume music is what started the mass music market, and until the late
1940’s when the original Shellac 78RPM records were starting to be
replaced by long playing 33 rpm vinyl records, it was the predominant
way for people to listen to music in their own home (Haven, 2006).
History of Musical content:
- After records started to be manufactured from Vinyl little
changes occur in how musical content was distributed and
consumed.
- This is until Compact Cassettes were introduced in the
1960’s, consumers for their small and portable nature
adopted them and they became popular through to the
1980’s (Rogers, 2013).
(Deviantart.com, n.d.)
- Next in the musical content pipeline came the Compact Disc, this was
introduced originally in 1979 but took off in popularity from 1982 when
production CD players were introduced by Philips (News.bbc.co.uk, 2007).
It then became the predominant form of musical content consumption for
consumers.
History of Musical content:
(Kratochvil, n.d.)
The Innovation of File-Sharing:
- This is where the Online Music Economy begins, in the same scenario as
the physical distribution the online distribution of music starts with a
technological development. Through the late 1980’s and early 1990’s there
was a new innovation called mp3 technology, mp3 was a new easily
transferable format for audio files conceived by Karlheinz Brandenburg
(Ganz, 2011).
- From the development of this technology came new problems for the
music industry. The creation of an audio file that was easily transferrable
alongside the rapid advancement of the Internet meant that the industry
was trying to catch up on how this new format could be monetised.
The Innovation of File-Sharing:
- In light of this in the spring of 1999 new web software was launched from
America; it was called Napster (Lamont, 2013).
- Napster was a web programme that allowed the distribution of audio files
through a process called file sharing. This involved users of the site
allowing access to their collection of musical content and allowing it to be
shared among the network of Napster users.
- By late 1999 over 4 million tracks were available on Napster and by 2000
over 20 million users were online using the site to acquire the musical
content (Lamont, 2013) without any charge or fee being passed on to the
copyright holders.
(Napster Logo, n.d.)
- This was an important issue for the major labels at the time; if files
could be shared between consumers in this new digital format for free
then the copyright holders wouldn’t earn any royalty income from selling
their records.
The Innovation of File-Sharing:
- The realisation of the seriousness surrounding this issue forced the
labels to meet in Washington at the Record Industry Association of
America (RIAA) to discuss what Napster was and what could be done
about it. After the labels met they decided that they would take legal
action against Napster for breach of Copyright (Lamont, 2013). The
case went to court with the RIAA and Major Labels at the time claiming
copyright infringement had taken place within the operations of the
Napster community (The Guardian, 2000).
The Innovation of File-Sharing:
- As a result of the legal action taken against them Napster closed down
its original peer-to-peer file sharing service in 2001.
- In addition to Napster there were other file sharing services that
became available around the same time as Napster. LimeWire and
Gnutella were released in 2000, again they were both peer-to-peer file-
sharing services that involved users sharing content with each other.
- Gnutella was owned by a sub-company of AOL so was quickly shut
down however LimeWire continued its reign right up until 2010 when
along with another popular file sharing site The Pirate Bay it was closed
down with a court injunction (Gearlog, 2010).
Arrival of ITunes Music Store:
- Following the trouble that easy access digital music files had caused
the music industry, a change occurred which showed a way in which it
could be monetised.
- Steve Jobs was the CEO of apple and after the explosion of file
sharing was developing an idea which he hoped would change the way
people thought about digital music files. After developing his idea Jobs
pitched it to the major labels at the time, they agreed to it on the basis
that it operated within certain restrictions (Chen, 2010).
(Anon, 2015)
- Therefore in April 2003 Apple Launched the ITunes Music Store, a
programme released as an add-on to the already existing ITunes 4 a
self-titled “Digital Music Jukebox”. The innovation of the ITunes store
was the way it changed how musical content was purchased. It allowed
the track-by-track purchasing of music for as little as 99 cents per track
(Apple.com, n.d.).
Arrival of ITunes Music Store:
- This was such a new development for the industry as traditionally in the
physical content realm it had be known that if consumers wanted to
purchase a track of an album that wasn’t a single they would have to
commit to a full album. A great example of this is Pink Floyd’s A Great
Gig In The Sky off of the album Dark Side Of The Moon (Songfacts.com,
n.d.).
(Anon, 2015)
Arrival of ITunes Music Store:
- When developing ITunes Music Store Jobs stated that being easy to
use, having a complete library and being easy to use would attract
consumers from the free marketplace of file sharing to the monetised
alternative (Chen, 2010).
- As the programme showed more than a million song purchases in its
first week, Apple convinced the labels to lift one of the restrictions, which
was allowing ITunes to be downloaded onto windows Software in
addition to Mac’s own software (Chen, 2010).
(Anon, 2015)
Arrival of ITunes Music Store:
- Apple’s, in particular, Steve Job’s quick reaction to the file sharing
epidemic shows that they mastered the online music marketplace with
one move. Giving consumers an easy none troublesome alternative to
the file-sharing community worked for Jobs and it was assisted by the
fact that he had the brand and technological products to push the idea in
the right direction.
(Anon, 2015)
Innovation From Streaming Services of Musical Content:
- In addition to the new innovations mentioned that the Online Music
Industry was facing, there were also other innovations taking place that
would have lasting effect
- Streaming musical content is the process of listening to music in real
time via data being streamed to a device constantly, as opposed to
downloading the content first and then listening back to it after
(Bbc.co.uk, n.d.).
Innovation From Streaming Services of Musical Content:
- This way of consuming music started out in amongst the file sharing
movement at the turn of the century, it was first adopted and presented
to the public on a successful level in the form of Rhapsody. Rhapsody
was one of the first companies that used the streaming format to
distribute music to a vast number of people (Evangelista, 2002).
- It was launched in December 2001 by its parent company Listen.com
and without any major labels licensing their music to the site it received
criticism from the off (Evangelista, 2001).
- Come 2002 the site had become the first streaming service to have
licensing agreements from all five major labels of the time and also
around 50 independents (Evangelista, 2002). This cemented Rhapsody
as the leading innovator in the Music streaming world at the time.
Innovation From Streaming Services of Musical Content:
- However Rhapsody is not the leading music streaming service that it
once was, throughout its first years the lack of CD burning options, offline
availability and ownership of content meant that Rhapsody struggled to
ensure it was the major music consumption tool.
- This shows along with a report from Fortune magazine that the
consumers at the time were not ready for the music-streaming model,
and that Rhapsody came before its time (Nieva, 2011).
Innovation From Streaming Services of Musical Content:
- As the file-sharing community became smaller and smaller with sites
such as Rhapsody passed over and over through different parent
companies (Nieva, 2011), there was a gap for a streaming model for
consuming musical content.
- Spotify was launched in 2008 by a team from Sweden (Pullen, 2015), it
is a Music Streaming Service that had a business model not dissimilar to
Rhapsody’s.
Innovation From Streaming Services of Musical Content:
(Spotify's progress so far, n.d.)
- However as can be seen in the
figure graph to the left, within its
first year it was pushing towards
3 million users on its free ad-
supported service.
- Again in reference to the graph
it can be seen that this continued
to grow year on year to a
combined user total of 75 million
people, with 2010 showing the
first signs of consumers paying
for the premium service at $9.99.
- The Data in the graph on the previous slide shows that in addition to
Spotify, there are various active Music Streaming Services in the more
contemporary period: Last FM, Blink Box Music, Vevo, Deezer, Google
Play Music, YouTube and also very recently Apple Music who aren’t
featured in the Graph.
Innovation From Streaming Services of Musical Content:
- The most interesting point to be taken from the data is that as of 2014
YouTube held the largest market share in the UK by over 11%, this is in
light of the deal that YouTube arranged with the biggest Music Publishers
and Labels in the business (Robertson, 2012).
Innovation From Streaming Services of Musical Content:
- However six months after its launch in 2015 Apple Music gained the
same amount of paid subscription users that Spotify did in its first six
years of operations (Garrahan and Bradshaw, 2016).
- This suggests that Apple Music is in a position to take over Spotify and
YouTube as the leading Music Streaming Service. In the same
circumstance as it did in the File-sharing period, Apple’s innovation and
ease of use to the consumer has shown that it can be a dominant figure
in the Online Music Industry in regards to the delivery Musical Content to
consumers.
- The Streaming Model has shown the Music Industry a new innovation
in the digital age, it has shown that we are now moving from an
ownership to a rental society when it comes to the music we consume.
What does the Future hold?
- In the future the Online Music Economy will only grow as more and
more services and companies move online to conduct their business.
- With the rapid rate of growth shown by Apple Music it can only be
expected that it will overtake Spotify as the predominant Steaming
Service.
- However because as a society we have changed from an ownership
society to a rental society, there is the possibility that we will go back to
the old mind-set and require a physical attachment to the musical
content we consume.
References:
Albright, D. (2015). The Evolution of Music Consumption: How We Got
Here. [online] MakeUseOf. Available at: http://www.makeuseof.com/tag/the-
evolution-of-music-consumption-how-we-got-here/ [Accessed 12 Apr.
2016].
Anon, (2015). [image] Available at:
http://iadvise.blogspot.co.uk/2015/10/apple-logo.html [Accessed 14 Apr.
2016].
Apple.com. (n.d.). Apple - Press Info - Apple Launches the iTunes Music
Store. [online] Available at:
https://www.apple.com/pr/library/2003/04/28Apple-Launches-the-iTunes-
Music-Store.html [Accessed 13 Apr. 2016].
References:
Bbc.co.uk. (n.d.). BBC - WebWise - What is streaming?. [online] Available
at: http://www.bbc.co.uk/webwise/guides/about-streaming [Accessed 14
Apr. 2016].
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WIRED. Available at: http://www.wired.com/2010/04/0428itunes-music-
store-opens/ [Accessed 13 Apr. 2016].
Deviantart.com. (n.d.). Compact Cassette I. [online] Available at:
http://www.deviantart.com/art/Compact-Cassette-I-118738349 [Accessed
14 Apr. 2016].
References:
Evangelista, B. (2001). Music firms open online services, but will fans pay?.
[online] SFGate. Available at: http://www.sfgate.com/business/article/Music-
firms-open-online-services-but-will-fans-2845907.php [Accessed 14 Apr.
2016].
Evangelista, B. (2002). Industry starting to endorse Net music / Listen.com
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http://www.sfgate.com/business/article/Industry-starting-to-endorse-Net-
music-2801248.php [Accessed 14 Apr. 2016].
Ganz, J. (2011). The MP3: A History Of Innovation And Betrayal. [online]
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history-of-innovation-and-betrayal [Accessed 12 Apr. 2016].
References:
Garrahan, M. and Bradshaw, T. (2016). Apple’s music streaming
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http://www.ft.com/cms/s/0%2F742955d2-b79b-11e5-bf7e-
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history-of-file-sharing-1359473/ [Accessed 13 Apr. 2016].
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References:
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Guardian. Available at:
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References:
Nieva, R. (2011). Rhapsody: Life in a Spotify world. [online] Fortune.
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[Accessed 14 Apr. 2016].
Phonograph. (n.d.). [image] Available at: http://uwyoming.org/phonograph/
[Accessed 14 Apr. 2016].
Pullen, J. (2015). Everything You Need to Know About Spotify. [online]
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Apr. 2016].
Robertson, A. (2012). YouTube signs music licensing deal with BMG and
eight other publishers. [online] The Verge. Available at:
http://www.theverge.com/2012/6/6/3067636/youtube-music-licensing-deal-
bmg [Accessed 14 Apr. 2016].
References:
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[online] the Guardian. Available at:
http://www.theguardian.com/music/2013/aug/30/cassette-store-day-music-
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[online] Available at: http://www.songfacts.com/detail.php?id=2665
[Accessed 14 Apr. 2016].
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