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The new age of music consumption January 21, 2012

Posted by wallofsound in Music Industry, Music Radio.

Here I want to present a critical approach, which balances an analysis of the political economy of record production with a cultural economy of music consumption allows us to deal with changes in the ways in which we access and experience music. Here we are obviously talking about the way we listen to music that we have downloaded as digital music files using our computer or mobile phone. In an overview of popular music production this involves us looking at the way that music retailing is organised, and even questioning if the future of the music business lies in retailing music at all.

This is actually quite a difficult area to think through with some clarity because, unlike the ‘hidden’ detail of the organisation of record companies and music corporations, the detail of record retailing seems to be a very public issue. It is certainly a common media story, either reporting on the closure of a high street chain of record retailers, or presenting a report from an industry body that shows that record sales are falling, or the political discussions about the downloading of music files from the internet. The problem here, though, is not that the information we want is hard to find, but that it is obscured by an almost overwhelming quantity of opinion and, at times, hyperbole.

The fact that the use of the internet to access music is a pervasive theme of this book shows how important it is. Louis Barfe (2004), attempting a historical and contemporary overview of the music industries, has even suggested that we can understand internet to access music as causing the fall of the record industry, by which its rise can then be examined. Writing just over a decade ago, like many commentators, he evidences this ‘fall’ by pointing to a decline in record sales and he implicitly accepts the standard industry argument that this is the result of online music sharing. However, as we saw in chapter three Technological change has been a major characteristic of the record industry throughout its century-long life. From acoustic, through electronic to digital recording techniques, through shellac, vinyl, tape and then CD music formats, and the various media forms on which the music can be accessed, it is hard sometimes to see it all as the same industry. We should also recognise Barfe’s history, using a metaphor of ‘rise and fall’ derived from stories about the lives of prominent individuals or even whole civilizations, as the sort of as totalising story we analysed in chapter one. As we try to understand the modern music industry it is quite easy to accept arguments like this, particularly as they are so pervasive. However, such stories obscure more than they reveal.

In discussing access to music attention has most often been placed on the consumers of music as undermining the music industry through ‘illegal’ downloading, or on the industry as failing to respond to the realities of a new world. It is, though, much more productive to think about this as a change within the music industries, one characterized not by the ‘fall’ of a once powerful industry, but of another shift in the political economy of the industry and the cultural practices of music consumers. More specifically, then, we need to identify what is changing in the record industry and in the wider music industries.

Rather surprisingly, part of the answer is that not a lot has changed. Taking Britain as a fairly typical example, at the time of writing over 80% of recorded music sales were in the CD format, and while this represented a decline of a third over a decade it still accounted for around 100 million CDs in a single year. The downloading of digital music files from retail sites was growing steadily towards 20% (BPI ref). In the area of music radio, 90% of the British population still listened to radio with 85% of that listening via over-the-air, overwhelmingly AM and FM, broadcasts (RAJAR ref). Part of the answer, though, is that much is changing. By the time you read this, it is likely that the process of declining CD sales will have continued and that people will be using an array of new online music services instead of more traditional forms of listening to physical records or on over-the-air radio. In chapter 12 we will return to the implications of this change for our experience as music consumers, but there are also some important changes in the institutions which provide these music services, and in music retail as a whole.

At the level of political economy control of music consumption is moving away from the traditional music corporations and media outlets to a new generation of corporations with their roots in the computer industry. These new music industries institutions have grown from small companies very quickly because they have offered new products and services which seem to understand the cultural practices of their consumers far better than the traditional record and radio institutions have. While record companies and radio stations have interpreted the new technologies in terms of their existing practices, these new companies have completely rethought how they can make money out of music. It is not that the new companies have completely reinvented how to consume music, almost all their services are built upon existing cultural practices, but they have used the new technologies to extend them and to find new ways to make money out of them.

At the time of writing there are some quite prominent examples of these new institutions, and they are presented here with the usual qualification that you will need to reassess their place in the music industries as it is at the time that you are conducting your own analysis. Given how quickly the new organisations and institutions have emerged, it is just as likely that they have been replaced by new ones.

New forms of record retail
For a century records were purchased primarily through shops on the high street. These stores changed from the furniture or department stores which sold the first phonographs, through first specialist record shops, and then specialist music record shops, to the mega stores of the late twentieth century. There have always been mail order record retailers, either for record buyers who lived in relatively isolated areas or who had specialist music tastes, and the largest record vendors had always been general merchants, but the rise of online retailing is still worthy of note. Not only are its most successful organisations completely new to the market, they also represent the twin strategies of record retailing.

The first re-imagined the retail experience through the possibilities of greater interactivity and data management. The most successful company here was Amazon, which extended its book retailing business to records and subsequently a wide range of products and services, including music file downloads. At one level the Amazon site offers a simple search and purchase facility, but this is underpinned by a series of technologies aimed at encouraging music discovery. Data collected on your activity on the site is used to make further suggestions of things you may want to buy, the online store’s customers are recruited to review products and the services of its various associates, and through a combination of automated and responsive systems the website is tailored for individual customers. In doing this, the online retailer adapted many of the ways in which offline shoppers had decided what to buy. Customers would be influenced by the opinions offered by friends, the recommendations of staff in a specialist store, or paths of music discovery built in the music experience. While most of these techniques are in widespread use now the company’s innovation allowed it to attract customers and build the necessary scale for such an enterprise to succeed.
The second, was a service built into the technology of music organisation and listening, where the whole process of accessing and consuming music was re-organised. The most successful company here is the Apple computer company with its iTunes Store. Again, the ideas were not usually original – there had been many music file download companies before – but Apple built its retailer around its iMac computers and mobile digital file players, the iPod and later iPhone. As an integrated component of the iMacs’ iTunes music ripping organisation and playout software it was actually easier to buy a track than rip it from CD, and the use of Amazon-derived music discovery and recommendation systems extended the offline iTunes experience into a wider virtual world of music retail. Fundamentally, though, the success of Apple in becoming the world’s largest record retailer derives from the widespread popularity of it iPod and iPhones, and the usability and integration of the software services.

New forms of music service
If the first set of organisations that emerged in the new age of music consumption re-institutionalised previous activities of buying, collecting and listening to records, the second set re-institutionalise radio listening within a new political economy. There’s a more detailed examination of these music services in chapter seven, but here we need to outline the companies involved and how they became an important institution within the record industry and larger music industries. Because most of the focus of public debate has been on downloading, the fact that new forms of music consumption built around data streaming have been formed into new music industry institutions seems to have been lost. The fact that these services are often perceived to be extensions of radio services, and often present themselves as such, may also account from their critical neglect in debates about the record industry.

When the US broadcasting and internet services corporation, CBS, bought the relatively new online radio-like service and music fan website, Last.fm, in 2007 it paid $ 280m. Even though the deal was given some coverage in the business media, the significance of the deal in highlighting a new institutional form in the music industry was lost in all the public debate around downloading. As other seemingly similar services – like Pandora and Spotify – attracted more consumers, and the user base of this new way of listening to music expanded the brands became better known. Nevertheless these services have not been given the critical attention they deserve, even though they represent profoundly new ways to organise and make money out of records. It would not be too much on an exaggeration to claim that, along with iTunes and its store, these music services represent the most significant change in the institututional structure of the music industries since the original development of records and radio broadcasting.
Last.fm, founded in 2002, rhetorically claimed to be the ultimate radio station: both the end point of music radio’s evolution, and the only radio station listeners would need from now on. The .fm suffix cleverly suggested the service had its origins in over-the-air music radio and its future on the internet. Because its uses streamed audio content structured in a playlist-like running order it does feel like listening to radio but, as regular users know, a radio station made just for the individual listener. Utilising a range of data scraping, music discovery and responsive technologies, along with a social media world in which music fans can interact, the music services makes money out of music consumption by offering the full service for a subscription. Like Pandora and Spotify, there are free and advertising-supported levels of the service, but these companies business model if firmly rooted in the idea that consumers will pay for a flow of music that balances what we know with what we might like and an access to this music where ever we are and without the restrictions of a record collection we have to manage ourselves.

Such services are a radical departure from the usual form of record retail based upon acquiring and organising a physical record collection, and even the mass broadcast form of over-the-air radio, and adds the cultural practices of sharing music which have been a central part of music fandom for decades (see Wall, 2012).

These music services are relatively new, and the lessons of history tell us that they are more likely to take their place in a consumer ecology that includes traditional forms of record ownership and music radio, rather than replace them. Nevertheless they offer a radically different political economy of music consumption and an innovation in the form of music consumption culture. In themselves they do not mean that record companies will become redundant, but they do indicate that record companies need to respond beyond imagining that online services must be controlled to simply reproduce the retail function of the record shop and the promotional function of the radio station. Along with companies like Amazon and Apple, they do show that the biggest changes in the music industries are taking place at the point at which record companies connect to music fans, and that it is companies from outside the music industries who seem to understand what needs to be done far better than those within the traditional structures that create and supply music.

Barfe, L. (2004). Where have all the good times gone?: the rise and fall of the record industry. London, Atlantic.
Wall, T. (2012). Specialist music and the internet. New Perspectives on Radio. N. Gallego Pérez and T. García.



1. andy richardson - January 21, 2012

Good paper.

Political economy – the record companies once owned the means of production, their power lay in that. However, just as the internet has caused the long-term decline of print media, so digitisation obviates the need for record companies. The internet is now the world’s biggest quasi record label. The internet has greater utility for artist and consumer alike. Unlike record companies, it’s business model is not based on it working as a bank or loan shark might; offering an advance in exchange for extortionate return. Similarly, as you point out in discussions of last.fm, the internet offers the consumer a degree of choice and flexibility that exceeds anything that might be offered by a record company or music retailer.
Finally, I agree with the point relating to historic context. The record industry has profited from changes in technology since its inception. It woud be naïve to thin that a new model will not emerge enabling it to do just that, or that existing companies will not develop new technologies enabling them to recapture their market share and increase profitability to former levels.
I enjoyed reading the paper. Arguments well presented, erudite and coherent.

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