The Challenges Faced By The Music Industry Due To Technological Innovations

When radio became popular in the 1920’s everyone assumed that it was the end for recording artists and live artists particularly since music was being played without compensating artists. Record companies feared the loss of their income streams and venue owners were worried that people will no longer go out to enjoy live music. It took the Musicians’ Unions and Performing Rights Association 15 years before they can implement new copyright and royalty models for musicians.

Radio is the least of the challenges faced by the music industry because today it is up against the internet and digitization. The music industry as well as other industries is being impacted by technological and social changes. However, if musicians were able to adapt to the past technological and social innovations like radio, they can also adjust to the changes and fulfil their customer demands.

Social media platforms allow musicians as well as music companies to develop new strategies for distribution aside from the traditional linear supply chains that were dominated by the major music labels. In the traditional linear system, there is a series of intermediaries composed of contracts, production, publishing, distribution and promotion before music eventually reaches the retail outlets. Independent music labels that are supposed to provide an important platform for new aspiring singers and music makers are disrupting the paradigm with new business models and relationships between artists and audiences.

According to the 2015 report of Worldwide Independent Network, the global economic and cultural contribution of independent music labels is 37.6% or $5.6 billion of the global market. In terms of music distribution, Patrick Wilkstrom enumerates technological changes of ownership, access and context. Ownership model has dominated in the last century through CD’s and records. Access models refer to subscription-based music streaming like Spotify. Context models allow audience to “do things with music.”

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