Saturday, December 25, 2010

Music Industry Needs To Catch Up

As a fan of music I have listened to it in a variety of ways. The most common way is to download it. Today I embarked on a short journey to find some information on the emergence of digital music as a pivot player in how consumers listen to music.

I decided to read Ed Bott's blog post on about subscription services such as Zune Pass and Napster. This post essentially broke down the costs and features of each of the subscription services. What I found interesting is that some of the comments that people made revealed what we all already know: You can get music without having to pay for a subscription. The way its gotten is very much illegal. In fact one commenter quipped: "people are still pirating, and its free, so why pay for a subscription when you can get it that way?" Obviously this person is very much into piracy of music. Like many people, this guy would rather get tracks free using P2P or torrents.

I currently do not use P2P or torrents to download music though I have in the past. The reason is that I would rather support the artists by buying CDs. Piracy cheats the artist and record labels out of money.

The industry is going through a transitional period presently. It currently has suffered losses since consumers are simply not buying physical albums. Major record labels are trying find ways to effectively monetize the streaming of its artists' music for example. Unfortunately they have to compete with piracy. The music business is set up to make profits off of album sales. Also money is made off live performances and successful tours.

Interestingly, I found out that a not-for-profit organization collects royalties for artists from digital streams. They then disperse this money to artists. In fact they dispersed over $150 million dollars in royalties. The group is called SoundExchange. The LA times blog I read also mentioned that in some cases SoundExchange cannot find artists to cut them the check for royalties.

Seems artists need to do research to find out about the royalties they are missing out on. Even more important, it seems that the industry should spark some innovation that will please music fans and sustain the music industry and spur it back to profitability.

I will be keeping an eye on what the music industry comes up to keep up with technology.

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