The Evolution of the Internet’s Effect on Music

During the early 20^th Century, the only way people were able to listen to music was with a vinyl record. Over time, different music outlets developed, as vinyl evolved into 8-tracks, to cassettes, to CDs and now digital MP3 files. While some of these media outlets have since passed out of the public eye, the digital MP3 files are a part of the new digital age , which has been both a gift and a curse to the music business. First, let’s focus on the curse of the digital age on the recording industry.

There are many negative consequences the Internet has created which have affected the recording industry. The biggest issue has dealt with music piracy. According to RIAA (Recording Industry Association of America) website, the industry loses about $4.2 billion each year due to the availability of MP3s through the Internet. While there have been many cases by artists and record labels alike to crack down on the music pirates whether it be with the famous Napster case or more recently through torrent site The Pirate Bay, there still is an overwhelming amount of places for pirates to steal music.   Some music pirates have done the time for the music they have stolen, but it is nearly impossible for all pirates to be rightly given the punishment with the crime.   The $4.2 billion typically lost each year in the recording industry trickles down to a loss for many other individuals. Record companies, honest retailers, the creative artists, and even the consumer lose. 

Record companies have taken one of the biggest hits due to the evolution of the Internet. Roughly 85% of the recordings released don’t even generate enough revenue to cover production, promotion, and other costs for an album. Record labels typically lose the most from the rise of the Internet as an alternative for getting music because they rely so heavily on their products to sell. It is difficult for record labels to compete with the Internet alternatives because the Internet can give you the same music product for free . Record labels now have to rely heavily upon 15% of the music recordings that are profitable in order to cover the costs and keep their head above water. This is a problem because a large amount of the music pirates don’t go after the 85% of the recordings that can’t generate enough revenue to cover their costs; Instead, they go after the top 15%, really making it difficult for record labels to stay afloat. Those record labels who are unable to stay afloat have to cut some of the lower workers out from the bottom or just cut the whole record label all together.

The honest retailers and record storeowners also lose due to the Internet. Storeowners who are truly behind the products they sell are unable to compete with the Internet. They are unable to compete with the prices of illegal vendors, torrent sites, downloading programs such as Limewire, or any other ways of obtaining free illegal downloaded music. These effects also hurt the economy, because less business means fewer jobs are available.

The creative artists have lost a significant amount due to the evolution of the Internet. The royalties earned by musicians, songwriters, singers, and producers are not always collected now because of the stolen music taken off the Internet. Many musicians used to be able to make a living strictly off of record sales. As the cost of living and producing their product have gone up, their record sales have dramatically gone down, forcing musical artists to rely more upon touring in order to make money. While this may not be a big issue for big time artists such as Jay-Z, Madonna, or U2, the smaller artists who have not established themselves have a much more trouble. Not only do they lack the resources compared to larger, more established artists to tour, but they also do not have the creative power typically of a big-time artist. The record labels that are losing money from decreased album sales are become less patient with their artists. These artists have fewer resources to work with and are forced to make a product as successful as a large artist. That is why it would be very difficult for an artist such as Bruce Springsteen to survive in today’s music business.

Despite all of the negative effects, there are still some positive effects on recorded music due to the Internet. One of the first positive effects deals with access to older music no longer in print. The current contract process between an artist and its music label means that the artist technically does not own the music that he or she creates. Unfortunately, the music label owns the artist’s work. So if an artist decides to change record labels, and if the previous label decides not to print the artist’s previous work, then there are no other printed copies of the artist’s work available to the public. The Internet can act as a loophole though because it is the easiest way for people to access this rare material. While it does not put money in the artist’s pockets, it can ensure money to the artist in the future.

Music availability through the Internet can also create even more music fans because, as stated, there is more availability to access music that would most likely go unnoticed. Websites such as Lastfm, Youtube, and Myspace allow access to online music and available streaming for songs and upcoming albums. Many unknown artists are able to be heard and promote their upcoming album, as well as their previous material. This can create dedicated music fans willing to pay possibility for an upcoming album or possibly an upcoming concert, creating more revenue for the artist.

The Internet also promotes musical diversity, giving smaller artists on independent labels the exposure that typically would not have. About 82% of the entire music industry is owned by the big 4 record labels (Universal Music Group, Sony BMG Music Entertainment, EMI Group, and Warner Music Group). Since the independent artists do not have the same amount of money as the major record labels to promote their artists through radio, advertising, music videos, etc., they have slightly better chances to compete. The music pirates are able to listen and experiment with the music of the independent artist. This type of downloading will not typically hurt the recording industry because they probably would not have bought the music if it were just sitting in a record store. The music pirate may either go buy an album or concert ticket by the independent artist if they end up liking what they have heard, or they could possibly tell their friends, giving the artist even more exposure and revenue possibilities.

There have been many other larger artists that have benefited from the Internet as well. Artists such as Prince, Wilco, Nine Inch Nails, Jack Johnson, and Grateful Dead have been able to release albums and/or live concerts over the Internet. While that has pleased their older fans and brought in newer ones, it has also taken some of the power away from the big four record companies, giving some more power back to the independent artists.  One of the most notable bands to have success through the Internet is Radiohead. When Radiohead released their album Kid A  in Oct. 3, 2000, they were able to reach Number 1 on the Billboard charts without any radio play, music videos, interviews, or touring. Radiohead allowed Kid A  to be downloaded through Napster. People were able to listen to an album that was truly different from any of Radiohead’s previous work, incorporating ambient, electronic, and jazz elements into their music.  More recently, Radiohead released the pay-what-you-want album In Rainbows . This album was released after Radiohead fulfilled their contract with EMI Group, allowing Radiohead the freedom to promote their album the way they wanted to. They sold their album as a digital download and allowed the fans to pay what they wanted for it. Radiohead paid much less to produce their album and did not owe any money to a record label since they worked for themselves. Thus, they were able to make a profit off of In Rainbows . They eventually sold their copies in record stores and through iTunes, which made them even more money than before. These are just a few ways that music through the Internet can still succeed. 

The Internet presents some possible ideas for the future of recorded music.  Music downloading can hopefully further diversify the music accepted by the public, taking more power away from the big four record companies.  It may also encourage the smaller labels give their artists more freedom to experiment with new ideas, both musically and commercially. If some of these smaller independent artists are able to rise on the music scene, they could be very influential to the rest of the music business.

The music industry, if able to embrace the power of Internet on recorded music, should try to make piracy benefit the industry instead of spending millions on encrypting CDs and having Congress get involved. A music site could possibly be made through RIAA that would have every artist and all their material available to stream for free. Links for each artist could also be provide for those who really want to purchase their material. This type of idea would benefit from the power of Internet and be very inexpensive for the artist and record label.

A membership fee would also be a good idea for both artists and record labels to receive money. Prince has created a membership site on his LOtUSFLOW3R based website that allows fans access to his new albums, concert tickets, previous live performances, music videos, and photographs for $77. This type of membership fee or even a contract between a buyer and an artist/record label are potential ideas that could harness the power of the Internet and make it beneficial. 

The Internet’s impact has been pretty negative for the recording industry and on recorded music for most of the 21^st Century. However, it does provide hope for the future, as more artists and record labels may learn how to benefit from the Internet. Hopefully, the Internet’s gift will eventually outweigh its curse, sooner rather than later.