The Music Industry

Information about the music industry and how it works.

The Music Industry

• The music industry consists of the companies and individuals that make money by creating and selling music. Among the many individuals and organizations that operate within the industry are: the musicians who compose and perform the music; the companies and professionals who create and sell recorded music (e.g., music publishers, producers, recording studios, engineers, record labels, retail and online music stores, performance rights organizations).

Oligopoly – The big 4

• The EMI Group, also known as EMI Music or simply EMI, is a British multinational music company headquartered in London, United Kingdom. On 12 November 2011, it was announced that EMI has sold its recorded music operations to Universal Music Group for £1.2 billion ($1.9billion) and its music publishing operations to a Sony-led consortium for $2.2 billion.

• Universal Music Group (UMG) is a multinational music company. It is the largest of the big four record companies by its leading market share and its multitude of global operations.

• Time Warner's is one of the big 4. In April 1971, thanks mainly to the influence of Ahmet Ertegun, the Warner group announced a major coup with its acquisition of the worldwide rights to The Rolling Stones' new label Rolling Stones Records, following the expiration of the band's contract with Decca Records.

• Sony BMG Music Entertainment began as the result of a 50–50 joint venture between Sony Music Entertainment (part of Sony) and Bertelsmann Music Group (part of Bertelsmann) completed on March 4, 2004. It is one of the Big Four music companies, and includes ownership and distribution of recording labels such as Arista Records, Columbia Records, Epic Records, J Records, Jive Records, RCA Victor Records, RCA Records, Legacy Recordings, Sonic Wave America, and others.

Source of competition

• Piracy of CDs and Cassettes.

• In No.2 market, Japan, 236m CD-Rs wereburned in 2002, while legitimate CD sales were 229m.

• In Spain, two out of five records were pirated.

• MP3 file swapping

• Competition from new forms of entertainment including video games and DVD films

Promotion

• Due to the loss in CD selling and illegal downloads the music industry have to find more ways of making money. Music videos have become a massive part of selling an artist, nowadays even ‘official lyric videos’ have become increasingly popular. These can also put influence on the record charts.

• Merchandise for artists have gone up selling Tshirts, Perfumes, Wrist Bands etc.

• Social media has become a massive for Music companies to sell their products.

• Recently vinyl records have come back into fashion being advertised as a vintage way of listening to music. Many artists have started to sell their records on vinyl.

• Nowadays artists get their income from gigs, festivals and meet and greets.

Conglomerates

• Synergies through ties to film studios, TV networks, publishing etc.

• Film scores developed from corporate-owned library.

• Music video channels promote own artists.

• artists appear on talk shows.

• magazine articles.

Industry strategies

• commonly 5 renewable 1-album contracts.

• royalty system pays the artist 7-15%payable after costs are met (plus song writer publishing royalties).

• Decisions according to track records and reputations: celebrity power.

• Pre-selection systems: selecting that which is most likely to succeed in light of recent successes.

Recording

• This is a map of the recording process, In order for an artist to record they must first find a record label on which to record on, following this they should choose whether to cover a song, which they would have to find the rights to, or record an original song the next action in this process is recording the singers and artists, after this a backtrack maybe added, the product will then we put onto a CD and duplicated for further distribution.