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Every day I keep adding open tabs to my browser with interesting articles on issues related to governance across borders, hoping to find the time to blog about them; only rarely, I actually manage to do so. This is why I am starting the new year with a new series called “Tagged Tabs”. To remove at least some of the open tabs in my browser I will (un)regularly present a list of commented links to interesting articles elsewhere.
- “Copyrights vs Human Rights“: former Sun Microsystem’s open source evangelist Simon Phipps criticizes “Three-Strikes” laws for equating “loss of a significant right with a real but trivial civil matter”. I could not agree more.
- “Apple removes VLC from App Store, GPL to blame“: having discussed problems of license (in)compatibility previously on this blog (see, for example, “Money Buys You Standards?“), incompatibility of licenses with certain business models or infrastructures seems critical, as well.
- “LG and Windows Phone 7: High Expectations, Low Sales“: it is almost an irony of history that Microsoft seems to face the same challenge in the smartphone market that all its competitors face in the desktop market: the applications barrier to entry (see, for example, Prieger and Hu 2007). Nevertheless, Microsoft’s desktop earnings will allow to fight for a long, long time.
- “‘Comes With Music’ no more for most Nokia phones“: irony #2: Nokia’s service “Comes With Music”, one of the last examples of DRM in the music business (see “DRM in the Music Industry: Revival or Retreat?“), will be discontinued in 27 of 33 countries and only survive in countries with high levels of piracy such as China, where Nokia abstained from using DRM in the first place.
This post is provided by our “guest blogger” Elke Schüßler. Elke Schüßler is postdoctoral fellow at the Department of Management at Freie Universität Berlin.
As part of a larger research program on so-called field configuring events (FCEs) in the German music industry, Leonhard Dobusch and I took a closer look at the question of how the issue of copyright is represented at – and in turn framed by – music festivals, fairs, and conferences where the issue of copyright (or, more generally, the question of the future of the music industry in its multiple forms) is discussed by a diversity of field actors (see working paper). The concept of FCEs comes from organization theory (see Garud 2008 for a scholarly example) and refers to events as temporally and spatially bounded arenas for networking, sensemaking, and debate with a potentially larger impact. We consider such FCEs as a discursive focusing lens hosting different “discourse coalitions” and their respective “story lines” (see Hajer 1993) and argue that the way the event landscape evolves can be taken as a representation of how the field evolves with respect to certain issues.
Empirically, we first analyzed at the evolution of the event landscape in the pre- and post-Napster period (1995-2001 and 2001-2009, respectively). We identified 27 events in the German music industry that fulfilled our selection criteria and that we classified as conservationist, reformist, radicalist, or neutral with respect to copyright. We observe a steady rise in the number of events, from only 3 in the year 1997 to 20 in the year 2009 (see Figure 1). There is now a larger number of radicalist and reformist than conservationist events and, accordingly, the majority of newly founded events had either a radicalist (5 events) or a reformist (7 events) orientation.
We further conducted a comparative in-depth discourse analysis of three selected events in the year 2009, a critical year for the German music event landscape: the traditional main industry event, the “Popkomm”, sponsored predominantly by the major labels and canceled in 2009 with reference to “illegal downloads”; the all2gethernow (a2n), an impromptu collective act of the independent players in the industry to fill the gap and to counter the claims of the Popkomm; and the c/o pop festival founded in Cologne in 2004 associated with the digital music business. Our aim was to identify compatible and incompatible story lines, associate them with certain actor groups (not) participating at these events, and link them to the related event- and field-level practices. In a comprehensive media analysis we identified 34 different claims with respect to copyright made in the context of these events and, again, classified them as conservationist, reformist, radicalist, or neutral.
When EMI, the smallest of the “Big Four” major labels, announced to start selling its music without technological protection measures (“Digital Rights Management”, DRM) in 2007, the other three majors quickly saw no other possibility but to follow down this road. Flanked by Apple’s CEO Steven Jobs’s “Thoughts on Music”, this move brought an astonishingly unsuccessful decade of attempts by industry incumbents to establish DRM technologies to an end.
In theory, put forward for example by industry researchers such as Mark Stefik, DRM technologies should not only prevent illegal copying practices (“piracy”) but also allow new streams of revenue by tailoring prices individually to consumer’s needs. In praxis, however, this vision never became reality: while in the world of small and many independent labels DRM never was important (see, for example, the online-store “finetunes”, which was DRM-free from the beginning), the cartel of major labels first tried to develop industry-wide and all-embracing DRM standards in the realm of a so-called “Secure Digital Music Initiative” (SDMI). Remains of this bold attempt, which was silently shut down after only two years of existence in May 2001, can only be found in the Internet archive. Controversies between content owners and hardware producers about the necessary protection levels had delayed DRM development, whose outcome was then rejected by consumers, leading DRM-mastermind Stefik to conclude in 2007: “The situation reflects the core issue that current DRM provides no compelling benefits to consumers” (see the paper “DRM Inside”).
The only refugium, where DRM solutions still prevail, is the – far from thriving – field of mobile music: supported by all four major and hundreds of independent labels, Nokia’s bundling of phone hardware and music-flatrate entitled “comes with music” uses Microsoft’s “plays for sure” DRM solution. But even in this field DRM seems to be in retreat, since Nokia recently abandoned DRM when introducing “comes with music” in China. Ironically, Nokia spokesman Doug Dawson justified waiving copy protection measures with fighting piracy (see Economic Times):
“It’s unique for China where piracy has had a stronghold.”
Does this mean DRM measures against piracy do only make sense, where piracy is weak? While such paradox lines of reasoning seem to finally herald the end of DRM in the music industry, Michael Arrington at techcrunch nevertheless reports renewed attempts of introducing DRM through the backdoor – via watermarking and cloud computing: Read the rest of this entry »
One of the things that make blogs particularly interesting are series. In this blog, for example, Phil features a series on “microcredit myths“. The “series” series recommends series at related blogs. This time I introduce the series “How Evil is File-sharing?” at the German research blog “musikwirtschaftsforschung“.
Peter Tschmuck, founder of “musikwirtschaftsforschung” (“music industry research”), is an economist by training, who is situated at the University of Music and Performing Arts Vienna. In his works he pursues a holistic approach in researching how technological and regulatory changes affect the music industry. Unsurprisingly, new practices such as online file-sharing (see also: “Internet Piracy: A Perfect Excuse?“) play an important role in his research as well as on his blog, where he started a series titled “How Evil is File-sharing?”. We feature this series not only because it gives a great overview – regrettably only available in German -, but also because it is the main topic of the upcoming “Vienna Music Business Research Days” (English PDF), June 9-10, 2010.
After having reviewed 17 studies on file-sharing in the course of the series (see list of studies below), in post #18 Peter Tschmuck groups the extant literature into three categories (number of studies in brackets):
- Formal approaches (4): Due to the very unrealistic assumptions of these either microeconomic (e.g. Liebowitz 2006) or game theoretical (e.g. Curien & Moreau 2005) models, Tschmuck summarizes their implications as ranging from “no usable information” to “interesting but still empirically unfeasible insights”.
- Survey-based approaches (7): With one exception (Huygen et al. 2009), all available surveys lack representative samples, thus making generalizations difficult. Interestingly, Huygen et al.’s study, which is representative at least for the Netherlands, finds no connection between the decline in CD sales and file-sharing activities.
- Econometric approaches (6): Among the econometric approaches, Tschmuck highlights the two Harvard-studies of Oberholzer-Gee & Strumpf (2007) and Blackburn (2004) as being particularly reliable.
In what follows, Tschmuck delineates propositions for further research on the issue. For the supply side he mentions the following three characteristics: The music industry resembles (1) oligopolistic market structures, labels in general and major labels in particular (2) seek to maximize market share and due to copyright regulation we find (3) monopolistic competition.
On the demand side, in turn, he acknowledges the existence of (1) a substitution effect of file-sharing and record sales, which is however balanced by something Tschmuck calls (2) “network effect” in form of new music discovered via file-sharing. The latter lies at the heart of market development and market segmentation.
As a conclusion, Tschmuck offers the following (translation L.D.):
Anyone who wants to belong to future winners has to abandon traditional business models and harvest new opportunities for making profit. The battle against music file-sharing networks is thereby definitly not a sensible way to pursue. One should rather consider how these new forms of using music can be economically capitalized, which brings us to the discussions on music flat-rates and new types of copyright.
Which, in turn, brings us back to posts on this blog such as, for example, “Extending Private Copying Levies: Approaching a Culture Flat-rate?” regarding the former and “Competition for Copyright Collectives: New Market Logics” regarding the latter.
Appendix: Studies reviewed in the series “How Evil is File-sharing?”: Read the rest of this entry »
Paul David Hewson, better known under his stage name Bono Vox as a frontman of the rock band U2, is undisputedly one of the world’s best-known philantropists. He holds – and expresses – pointed opinions on a huge variety of subjects, leading him to the foundation of his organization DATA, an acronym for “Debt, AIDS, Trade, Africa”. So it was no surprise, when in his recent New York Times op-ed he addressed issues covered by this blog. Of his piece “Ten for the Next Ten” especially number 2 dealing with intelletual property caught my attention:
“A decade’s worth of music file-sharing and swiping has made clear that the people it hurts are the creators — in this case, the young, fledgling songwriters who can’t live off ticket and T-shirt sales like the least sympathetic among us — and the people this reverse Robin Hooding benefits are rich service providers, whose swollen profits perfectly mirror the lost receipts of the music business.”
Is it really true that the biggest losers of file-sharing are the creators? Bloggers at the UK Times come to different conclusions in their recent analysis, presenting the following “graph the record industry doesn’t want you to see”: Read the rest of this entry »
Sorry, but I simply have to add my two cents on what Leonhard is writing about. Yeah, I’m blogging a bit out of my depth here, but as an ardent fan of original music and deep skeptic of intellectual property rights, I’ve had a strong opinion on this subject for years.
It comes as no surprise that ABBA are arguing for the preservation of the music industry. Too old or forgotten to sell any new songs, their income depends on the re-selling and licensing of old songs. Björn claims that downloaders are stealing the ideas of “single individuals” who, presumably, should receive income for it.
But the real question is: who needs the music industry? By pitting overproduced, overfinanced pop products against homegrown artists and appropriating the majority of proceeds, does the music industry really encourage creativity? I wonder how many professional musicians actually work for (major) record labels, but beyond any doubt it’s a very small percentage. The rest ekes out an honest and more or less satisfying existence doing what they can’t resist doing: making. good. original. music.
And here’s a link to the current capitalist crisis: As banking practices show, financial incentives just simply do not produce excellence. Read the rest of this entry »
One of the things that makes blogs particularly interesting are series. In this blog, for example, Phil features a series on “microcredit myths“. Today we are starting a series recommending series at related blogs. As an opener I present Digital Renaissance’s “Songs to the Music Business”.
The guys behind Digital Renaissance - two music label owners, a researcher and an expert on the movie business – describe the rationale for their blog as follows:
There need to be a Digital Renaissance. Renaissance is the french word for rebirth. It was a cultural movement that brought us out of the middle ages and into the future and then some with a vengeance 4.0 style. The world adjusted to this cultural movement. It is time for the world to start adjusting to the Digital Renaissance.
Yesterday, they started a series “with songs that can be translated as good stories of – or advice/mindsets to the music business”. The first entry of the series is devoted to Warren G and his piece “What’s love got to do with it?” (YouTube-Video) . There they are claiming that Warren G is “telling the whole truth” in the third verse, where he raps:
“Now for these labels tellin’ fables, makin’ the messed-up deals under the tables. You think that you smart, but, fool, I’m the smartest. You can’t make no money if you can’t keep an artist.” Read the rest of this entry »