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Research Themes
In Focus
Digital Transformations II:Toward a New Form of Musical Culture February 2007
A Crossroads in the History of the Record Industry |
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Table of Contents
Introduction A Crossroads in the History of the Record Industry
Conclusion All Resources A Crossroads in the History of the Record Industry Free downloading of music and file-sharing on the Internet have been among the most widely publicized phenomena in the most recent history of the recording industry. Precipitated by the advent of the MP3 file protocol, high-speed Internet connections, and mobile digital music players, the file sharing controversy reached a peak several years ago with the rise of Napster and other P2P (point-to-point) networks. More recently, the success of Apple's iPod music player and iTunes online music service have demonstrated that consumers are willing to pay for the music they download provided the price is right. While the record industry has tended to attribute virtually all its financial difficulties in recent years to online file-sharing, statistics show that worldwide sales of recorded music had already begun to slip during the late 1990s, due, at least in part, to other factors including economic recession, competition from emerging leisure technologies, especially digital gaming and cell phones, as well as CD price-cutting at big box retailers. Furthermore, the industry had already developed strained relationships with both its artists – abruptly terminating contracts when they did not sell well enough – and with consumers – over the high cost of CDs and physical piracy (the sale of counterfeit CDs), which has become a worldwide phenomenon at least as significant as downloading. The legal suits brought against individuals in the USA for downloading MP3 files of copyrighted music have only served to increase the feeling of resentment among many artists and consumers. Artists are divided on the subject of file-sharing, both fearing the potential losses in music sales but also recognizing the interests of their fans in sharing music among themselves. But by 2006, the establishment of the Canadian Music Creators Coalition (CMCC), an organization whose membership includes some the most well-known artists in contemporary Canadian popular music, served notice that industry rhetoric and legal actions do not reflect the interests of Canadian artists and that they are prepared to organize and lobby on their own behalf in matters of copyright. At the present time, Canada is under intense pressure to reform its copyright laws and to bring them into line with international treaties. The International Federation of the Phonographic Industry (IFPI) has singled Canada out as one of its ten top priority countries in the world where reforms are needed to combat illegal downloading. However, Canadian policy makers, who are drafting Copyright reform legislation, will need to proceed with extreme caution if they are to balance the various interests at play: the need for regulating the Internet without creating undo constraints on the free flow of information, the copyright interests of the recording industry, and the privileges that Canadian consumers presently enjoy because the downloading of music is legal in Canada thus preventing the record industry from pursuing litigation against individual consumers. In particular, the views of Canadian artists will have to be given considerable weight to offset the lobbying efforts of the multinational record industry: the CMCC has recently argued that the 120% increase in Canadian online music sales in 2006 (vs. 65% in the U.S.) is ample evidence that Canadian copyright laws do not need drastic overhaul. Using the rule of law to meet the challenges presented by the emergence of new technologies has prevented the industry from developing a coherent approach to the Internet as a means of music distribution. The gap left open by the industry has allowed innovative entrepreneurs to enter the digital marketplace and give it shape. These entrepreneurial firms, large and small (numbering some 500 firms operating throughout the world), now act as a new set of economic and cultural intermediaries with which the recording industry must interact. Through the activities of these entrepreneurs, worldwide digital music sales doubled during 2006, accounting for approximately 10% of overall recorded music sales (IFPI). Though digital music sales have yet to fully compensate the industry for losses in CD sales, which continue to decline, music sales in North America (including physical recordings, videos, and downloads) increased by more than 19% in 2006 (Soundscan). A number of Canadian artists have experienced significant chart success during this period due, in part, to online sales and cross-media promotion via television and live touring. The Apple Revolution All Resources |
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