Impact of Internet on Music Industry

Impact of Internet on Music Industry

Introduction

The music industry is reaching great heights with the help of the internet. On one hand it brings along a large drop in sales due to illegal downloads, on the other hand, the industry has accepted the internet as the future primary distribution channel. By the establishment of UMTS and broadband internet, the music industry is getting closer in becoming a supplier of content for network operators and phone companies. As an ever growing market, there are many companies competing with each other by offering their customers the best; and try to provide good deals that are better than what are being offered by competitors. The range of music on the shelves of stores has fallen, and now virtually every collection of music is accessible at all times on servers that the whole world can access. Each musician can publish his music on the Internet without much difficulty which is making the physical distribution obsolete. The Influence of music as advertising for branded products is also increasing, and with the marketing of mobile ring tones, a completely new line of business has opened.

Today, the music industry is one of the most potential business industries, as well as one of the most popular industries in the world since almost everyone is a stakeholder. This industry also acts as an irrigator product that helps other companies and sectors to grow such as: component industries, consumer electronics, the advertising and telecommunications etc. According to the latest report from the IFPI (2006) on the digital music market, despite the drop in sales of traditional physical media (LPs, cassettes, CDs etc), in 2011, 420 million songs were downloaded from online sources. Platforms music distribution and marketing also increased twenty times with respect to 2010, and accounts for 6% of the global market music (IFPI, 2006: 3).

Moreover, in 2011 the music business platforms increased to 335 million downloads, while in 2010 it was only 50 downloads, and the total number of songs that record companies offer on these platforms lies between 1 and 2 million depending on the platform. This assignment discusses some of the transformations that are operating today within the Music Industry from the emergence and expansion of new digital technologies, such as MP3 music players, the DVD, digital media etc. Furthermore, the analysis on new strategies and business models that large multinationals test in Internet will also be presented.

In this connection, the main aim of this assignment is to show how the music industry is changing and recovering through the benefits offered by New Information Technologies and Communication (NTIC), that is, the new networks and digital technologies allow distributing and marketing companies to lower the production costs on a larger scale.

Discussion

The music industry and the Internet users who paid for these commercial services already exceed 20 million worldwide (Apple Inc., 2010, Napster Inc., 2010). If you add the downloaded songs in the industry, the total volume amounts to 794 million dollars, ...