It’s no secret that the music industry has been in decline since the advent of the digital age. Yet, new reports show that revenue is leveling off, largely due to sharp increases in streaming subscriptions. This indicates not a slowly dying industry but a rapidly changing one. Growing pains are inevitable; yet, this time of change, innovation and experimentation holds the promise of success for the music industry’s digital sector.
Given the format shift from physical to digital, a new generation of technology-savvy entrepreneurs are poised to take the reins in music business management. Innovative music business schools are offering degree programs to answer these changes — such as the online Master of Music in Music Business and Entertainment Industries (MBEI) at the Frost School of Music. These programs cover current industry trends and emerging business opportunities. They also offer communities of creative music- and business-oriented students to foster collaboration and new ideas.
The Move to Digital Music
The transition from vinyl records to cassette tape and tape to compact disc (CD) was a natural one. Cassette tapes offered longer play durations and a smaller physical format than records. CDs offer both the duration and portability of tapes as well as the hi-fidelity sound of digital recording. CDs enabled audiophiles to listen to professional-grade recordings at relatively low cost.
When CDs took off, the internet was still fairly new, and data transfer rates were slow. CDs were too data-heavy for quick download. Digital technology then grew rapidly; internet download rates improved and new high-quality, compressed music files became widely available. By the turn of the century, people could share compressed MP3 files with each other over sites such as Napster. In effect, music became virtual and – copyright infringement aside — free.
Record industry revenue plummeted, and the digital revolution challenged the antiquated distribution model of major record labels, significantly changing music business management. Innovative entrepreneurs and company executives stepped in to redefine the industry with new ideas and a competitive spirit.
As sites like Napster folded for copyright infringement, Apple filled the gap by creating iTunes and quickly took the lead in digital music retail. The music industry limped along as physical sales dropped and digital sales grew. Direct downloads and indie label sales were major contributors to this growth. Low-overhead labels as well as smaller studios provided musicians with affordable options that previously required large studios and big budgets. In addition, social media and online blogs became a prevalent means of inexpensive promotion.
Streaming furthered the digital takeover by offering listeners unlimited access to giant music catalogs for low subscription rates. Streaming services such as Spotify, Pandora and YouTube have taken heat for underpaying musicians. Still, the increased market share of streaming services corresponds to a drop in music piracy and growth in the global market.
The evolving music industry still holds a wealth of opportunity for new music business managers of all varieties, including innovative digital technology entrepreneurs, indie label managers and publishers of independent artists. Earning an online music business degree can help these executives and entrepreneurs change the face of the music industry by turning their business models into new realities.
Learn more about the Frost online MBEI program.
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