The Future of Online Music Sales

For the past ten years, the digital music industry has revolutionised the music industry. It seems much longer than 12-15 years ago that we were buying tapes, slotting them in to our cars and having to keep your hand on the button for them to rewind. Then, came the CD – a little silver disc where you could actually SKIP the tracks. Now, it’s hard to remember the CD as being new – it seeming like an ancient institution against the new wave of digital media. So, it started with the vinyl, then moved on to the tape, then to the CD, then to digital music. Where are we going to go next?

 Well, it seems two scholars have beaten me to this question. In their book The Future of Music: Manifesto for the Digital Music Revolution, Leonard and Kusek predict music will soon be ubiquitous. In time, they argue music will become a utility that we pay for monthly (as we would an electric or phone bill). A small monthly fee will allow access to unlimited songs, shared over a P2P style network. 

Right now, this doesn’t seem very possible. With this monthly fee, how are we going to pay the artists, distributors and producers? Well, music is evolving so many of these jobs are obsolete. With the rise of the Internet, there is less need for the industry to create and distribute music. Now, artists just need to pay AU $200 to get a whole recording suite on their laptop, and fans just need to Google an artist’s name to get their music fix. This means direct relationships with fans are crucial for an artist’s revenue, with touring and merchandising still doing very well money-wise.

More music is being downloaded illegally than is being sold in the music industry BUT legal downloads are still profiting. This is because if a fan likes and respects an artist, they will pay money for their work. Alex Day, a YouTuber who isn’t signed to a label, still managed to get his song ‘Forever Yours’ to #4 on the UK Christmas charts. He did this through his fans – promoting his cause by vlogging to his subscribers every week. When asked about the impact of piracy on the music industry, he responded:

The problem the future of the music industry seems to face is piracy, with a large majority of digital downloads being illegal. More music has been consumed over the past 5 years than ever before, yet there is a decline in physical sales that digital sales aren’t quite covering. According to IFPI’s 2011 Digital Music Report, Digital downloads are up 1000%, however, revenues are down 31%. In 2010, a staggering 76% of all the music downloaded in the UK was unlicensed. When searching “[Artists Name] mp3’ on various search engines, a staggering majority of the results were illegal hosting websites.

"The way I see it, you have three groups of people that want to get your music: 1) The people that will buy your music even though they know they can get it free, because a) they really like you/your music and want to support what you do or b) it makes them feel good to give money to musicians and be legal and above board. I call a typical girl in this group "Super Sally." YouTube-MP3 doesn't affect Sally, because she's happy to support you. Super. 2) The people who download your music for free because they don't like it enough to buy it permanently. I call a person in this group "Nervous Nancy." Nancy's not too committed to the music, she wouldn't pay for it, but she likes it enough to take it for free. Nancy will use YouTube-MP3 to download my music. 3) The people that will always download music for free because they love the convenience, they don't want to pay for music, or they just can't afford it. I call her Freebie Freya. Freya will use YouTube-MP3 to download my music."

Radiohead, who in 2007 released their album In Rainbows’ using a pay-what-you-want system, further evidences this case. With this system, they got more profits than they did for their previous album Hail to the Thief, which was released through EMI.

So, the future of the music industry rests on its handling of the piracy problem. For the industry to thrive, record companies must learn to embrace the availability of free music. So, perhaps the future is in using music as a utility, or perhaps it rests in the fans themselves. Either way, it seems musicians need to maintain direct contact with their audience in order to succeed. 

Infographic by- Beijing Web Designers