Wednesday, 15 February 2017

How Music Industry Works?

Who are these "Big Three"?

While researching on how the music industry works I came across "The Big Three".
  • Universal Music Group - 29.85%
  • Sony Music Entertainment - 29.29%
  • Warner Music Group - 19.13%
If we look at EMI Group with a 9.62% of a market share. EMI was once a part of the "Big Four" which is now "Big Three". It used to own EMI Records, Parlophone, Virgin Records and Capitol Records. It faced financial tributes and debt of USD $4 billion. Later was sold to Universal Music Group for $1.9 billion in November 2011. EMI's parent company is the  conglomerate Universal Music Group.
Major labels such as EMI used to rule the music industry. They manufacture, promote and distribute the music of people under contract.

One of the differences between major and indie labels are the contracts they sign with the artists. Major labels would not let the artists to keep rights or control over their music. Where as an Indie label would let the artists keep their rights on their music.

Digitalisation had brought a major impact on independent record labels. The internet meant that independent companies would be able to advertise their artists better. This also mean that both groups were abled to put on their demos of the music or videos on YouTube and other such as websites.
Digitalisation allowed conglomerates such as Sony Music Entertainment to promote their artists in a better way. Sony Music Entertainment  and well as Universal Music Group  and previously EMI has a partnership with VEVO.
VEVO hosts music videos on YouTube and use adverts at the start of each video to produce revenue. It is beneficial for music companies as it allows them to regulate the online distribution of their music video and make profit out of them. VEVO also has application for a lot of devices such as Apple, GoogleTV and Android Market. This allows them to gain much more audience and to access the content. This is also an example of convergence of technologies.

According to Henry Jenkins, convergence it is when old and new media collide.

iTunes became the biggest music selling in 2008. But in 2008 iTunes took a fall of 5%in their yearly sales because the market seems to be giving way to the video. This is why Sony invested in VEVO as its website is more accessible as it is available in multiple devices. Also VEVO is surrounded by advertising and related videos. This is an example of synergy because iTunes are going to make money out of Sony's worldwide artists because they each have a large fan bases and therefore there will be a to of downloads.
If you look at the graph above you may see that the YouTubes' market share is 69.2% one of the reasons why it has the largest on the graph is because of the accessibility to their website. YouTube has a website and an application which is suitable for any smartphones including Apple and Android. YouTube is also great for the indie labels who would like to adverse their artists. Websites such as YouTube may also put a question on whether artists still need record labels? They can now film and export their music and video online to their fans and they would all be able to reach it. 
Artists are now able to create different media platforms because of digitalisation. They could create a Facebook page, YouTube channel, Twitter in oder to advertise and promote themselves. 

What Record Labels still have to offer? 
Although you could advertise your music now online without spending extra on record companies they can still offer a variety of things. 
There include an international distribution, legitimacy and reputation, this is because it would be much easier for people to recognise you through the labels reputation. Artists would have wider audience and would be associated with that record company and other artists from there making the new comers of the similar level as the worldwide known artists. These record companies could take care of the artists manufacture, promotion and distribution

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