The music industry consists of companies and individuals that make money by creating and selling music. The companies which also known as record label, is a brand and a trademark associated with the marketing of music recordings and any intermedia format which contains the music recordings such as music videos.
Most commonly, a record label also coordinates the production, manufacture, distribution, marketing and promotion, enforcement of copyright protection of sound recordings, conducts talent scouting and development of new artists (also known as A&R, the abbreviated form of Artist & Repertoire), and maintains contracts with recording artists and their managers.
Over the years, the record labels has constructed a gatekeeping mechanism for recording artists to enter the realm of music industry. The gate gatekeeping mechanism practically conducted by selectively scouting potential commercial musical talents to get exclusively signed, exposing their talents publicly, and exploitatively reaping forms of economic values.
In times past, artists would send unsolicited demos to A&R departments, and the executives would listen to the demos with hope finding the next big thing. Over time, too many artists were sending demos thus it became impossible for A&R people to keep up. Because of this and other legal issues, labels — with a few exceptions, soon the record labels stopped listening to unsolicited materials.
Yet, the gatekeeping mechanism didn’t stop there. A&R executives on the record labels tend to listen to the numerous demos given to them by friends, agents, managers, attorneys and other reliable sources. With only a few people serving as the gatekeepers and thousands of aspiring musical talents, it is really difficult to break into the music industry.
Most recording artists starts their career with insufficient practical resources to produce and perform their music business, thus they have become reliant upon record labels to broaden their consumer base. Because most commonly record labels have so many resources to run music business comprehensively — over the last few decades, for recording artists, getting an exclusive record deal seems to be the only logical possible way to get their music to reach their consumer.
On the other hand, the invention of digital audio encoding (digital audio file compression format for storage and transfer), portable media players — and the internet, has had a tremendous impact on music consumption culture and commerce. How people consume music has changed in so many ways. Most common people who adapt to the technology changes, learns that getting – listening – and keeping their favorite music nowadays is far more easier than before.
Because of storage efficiency, portability, transferability (sharing) of digital audio format, people are no longer rely on popular physical medium such as vinyl, tape or compact-disc — though such mediums still exist until today. Nowadays, most people listen to music on their portable media players, or even on their mobile phones.
With sufficient internet connection speed, music fans does not necessarily have to “own” the music — they could stream it through many sites which provide such services. If they liked it enough, through social networking sites they would tell their friends about the music they were listening to — they would post it on their walls, or tweet it via their microblog account. Moreover, when their friends, and their friend’s friends do the same thing — sooner or later the music itself multiplied socially — eventually it became viral organically.
Furthermore, it’s just a matter of time when people wants to “own” the music — where there are many sites in the internet also facilitate music distribution and retail services, where people can buy their favorite music and download it legitimately. Contradictory also, countless more sites — including peer-to-peer sharing services, provide easier ways to download unauthorized music without spending a single dime.
Internet with its two sides has provide music online a new approach to create social and economic relationship between recording artists and their consumer, but ironically also facilitate music to be downloaded illegally. Technological determinism establish a popular hype, especially in the mainstream press, that “the internet is killing the music industry”.
Music downloading is single-handedly blamed for the impending defunct of record labels, causing the degression of traditional business models music distribution and consumption, and consequently preventing rights holder from receiving their deserved reward for their part in the creative process.
But the popular idea we are always hearing that “the internet has changed the music industry” is not quite true. In fact, the music industry is changing. The internet does not cause those things. Technology does not drives history. Technology changes and we chooses our responses.
While the music industry keeps changing, the fundamental principle to engage an economic relationship between music and its consumer is never changed. As a media consumption, music is quite unique. The most reliable way to promote music is to have people hear it, if possible repeatedly without any restrictions — which also means for free, because it’s the only way to make people grow to like it. And sooner or later, inevitably — they are going to want to own it.
Since nobody really wants to buy a piece of music they don’t know. Thus, the economic engagement will only happen in one simple golden order : (people) hear it – like it – buy it. There is no other way around to make it happen.
As a form of technology challenge, internet has became a new environment where any musicians could be heard – liked – bought, connected directly to the global masses. This global connection has made the circumvention of the conventional music industry gatekeeper became possible.
As a recording artists, musicians have discovered that they suddenly have a lot of tools at their fingertips to take advantage of their own careers. When it’s managed properly, to encompass the appropriate fans across the globe who willing to consume their music is feasible. The time and space gap between music creators and its consumer — which for decades guarded by the record labels gatekeepers — seems to vanish in the haze.
Eventually, the internet and music online phenomenon lead us back to the question : “Does the internet really kill the record labels?”. Don’t believe the hype too quickly — in fact, it does not. The internet environment had just became a potential resources, which available for everyone to connect — with the appropriate management and marketing strategies, simultaneously spread music online while creating social and economic relationship from its creative creators to its consumers. Everyone, means every single independent musician, including the companies — a very broad-ranging from small to major recording companies. In fact, the record labels also utilize the internet as one of resource among many other resources they are capable of.
Facing this phenomenon while coping it as it happens, is the biggest challenges for every business performer within the music industry. Having websites and social networks for music online is not a promotional strategy. Having websites and social networks for music online means, it need to have a promotional strategies.
Independent music businesses need to realize that they can’t never rely on organic viral marketing — words by fans — only, in order to get their music spreads. They will still need a well-planned public relations and marketing strategies online — and necessarily offline — to reach the appropriate consumer. Internet is a powerful resources, but it takes other resources to make it really happen.
While record labels has many resources besides the internet to perform their business, the biggest challenge is how to negotiate “an offer artists can’t refuse”. Because musical talents have found the momentum where they could enter the realm of music industry without the necessity of passing the gate. Record labels need to offer a better, logical, mutual understandings of cooperation which independent artists could not do by themselves.