Within this essay I hope to evaluate the arguments presented by academics surrounding the views of optimists and pessimists when it comes to the changes Web 2.0 has had on the development of the music industry. When doing this I will use the three main stages of development to structure my analysis, these include: Stage 1- Napster, Stage 2- iTunes and Stage 3- Spotify. Using these stages I will be able to evaluate the main positive and negative views stated by academics, giving me a detailed insight into how consumers, cooperation’s and music artists feel about the developments. This will result in me being able to give an overall conclusion on the impact Web 2.0 has had on the industry, as well as allowing me to identify any possible correlation between individual views and the impact it has had on the parties.
Development-
Before identifying the three stages of digital music consumption, it is firstly important to show how the music industry had started to change in the years leading up to it. As Brabazon (2012) states ‘[r]ecording technologies have shaped and structured the music industry. Expensive recording equipment… complex production and distribution… ensured that large corporations and a few entrepreneurial independents dominated the music industry.’ (Brabazon,2012:86). However, as technologies started to progress it was obvious that they were going to be ‘part of a digital revolution that [will] transform the way music is produced and consumed’ (Garofalo, 2003:30), with the new technologies allowing for music to be ‘mixed at home’ and ‘distributed… via the web’ (Brabazon, 2012:86). This new revolution therefore ‘signalled the death of an era in the music business’ (Garofalo, 2003:32) with the ‘power and reach of record companies declining’ (Brabazon, 2012:86).
This decline is evident in the research analysed by Leyshon, Webb, French, Thrift and Crewe (2005) where they show that ‘the global music industry sales fell by 5 percent, and then by over 9 percent in the first half of 2002’ (Sanghera cited in Leyshon, Webb, French, Thrift and Crewe, 2005:178). Going on to state that ‘the main cause of their current malaise: the internet’ (Leyshon, Webb, French, Thrift and Crewe, 2005: 178-179). This research therefore shows that the ‘combination of the CD format, personal computers, and the internet was a true convergence of technologies that… started to tear the very heart out of the control that the music industry has’ (Kusek and Leonhard, 2005:4-5).
Stage 1- Napster
The first stage of the rise of digital music comes in the form of the introduction of the MP3. The MP3 is a file format that uses data compression to allow a large amount of data to be reduced in size. This compression made high quality recordings ‘more suitable [for] domestic and personal use’ (Brabazon, 2012:86). This moment of discovery lead to the introduction of ‘peer-to-peer (P2P) applications [which] enabled massive numbers of files to be accessed simultaneously by literally millions of users at one time’ (Kusek et al. 2005:5). P2P applications are most famously known by Napster, which was a free software programme that ‘made it easy for music fans to go online, find a copy of a song, and download it for no cost’, using ‘the directory and download[s] from other users’ computers’ (Brabazon, 2012:87). The ability to find any song for free through a connection of users lead to an increase in public downloads, with a survey by Jones and Lenhart (2004) showing that in ‘April 2000… 21 percent of respondents who used the internet downloaded music… but in February 2001 it grew to 29 percent’ (Jones and Lenhart, 2004:189), blaming the introduction of Napster as the reason for the increase.
As Napster grew, so did the irritations of the major four music industries, with ‘Universal, Sony BMG, Warner and EMI- [feeling] so threatened by Napster and its progeny that they joined forces to sue Napster out of business’ (Kusek et al. 2005:5). This was due to Napster and other P2P applications process of sharing music violating copyright, resulting in the major music industries ‘su[ing] individual downloaders who had been identified as sharing music online’ (Barbazon, 2012:87).
Although legally in the wrong, many academics including Kusek and Leonhard believe that the fault actually lies with the major music companies. These optimistic views state that ‘the existence of such widespread file-sharing systems is a direct result of the incumbents failing to come to terms with the new digital reality’ (Kusek et al. 2005:6). Going on to argue that ‘rather than anticipating and exploiting trends- which is what the music business used to be good at- the industry has moved to try to derail them’ due to their ‘obsession with control of the media oligopolies’ (ibid,8). Garofalo also adds to this argument by stating that ‘rather than embracing the potential of the internet and taking the lead… the music industry has concentrated instead on protecting a business model whose core business revolves around… physical property’ (Garofalo, 2003:30) which is now rapidly dying.
Moving away from the arguments of the music industries incompetence and towards that of the music industries sales going down due to this illegal downloading, Kusek and Leonhard (2005) state that the dip in CD sales and closing of record shops ‘isn’t entirely the digital’s fault’ and that ‘labels shifted their primary distribution channel away from the traditional record store and over to the “big box” retailers such as Best Buy… all of which sell CDs at heavily discounted prices in order to attract crowds into their stores’ (Kusek et al. 2005:7). This therefore, is unfair to fully blame on the introduction of applications such as Napster and is partly self-inflicted.
When looking into the view of the pessimists, apart from the music companies, major opposition came from established artists themselves. Garofalo (2003) states that during the Napster court case ‘Paul McCartney actually sued MP3.com and Sean “Puffy/Puff Daddy/P-Diddy” Combs spoke out against services like Napster’ (Garofalo, 2003:37), arguing that artists songs are being downloaded millions of times without them seeing any profits and therefore wanting their music to be removed. The loudest voice heard in the court case was that of Metallica, sharing the same issues stated above, however they ‘hired NetPD to monitor three days of Napster activity. Drummer Lars Ulrich then hand-delivered the results- 60,000 pages of screen names, documenting 330,000-plus Napster users who had downloaded 1.4 million Metallica songs during the three-day period’ (ibid,38). This outrage was understandable with Napster having to ban all 330,000 users and remove all Metallica songs. However, this “siding” with the corporations didn’t go down well with their fans, resulting in major ‘damage to Metallica’s anticorporate rock authenticity’ (Woodworth, 2004:168).
When countering the views of the pessimists, many argue that the Internet Nirvana Theory considers oppositional views in a way that highlights the best-case scenario. McCourt and Burkart (2003) state that in this theory, ‘the internet is an arena of free exchange in which everyone wins’ with the creators of music ‘regain[ing] control over copyright while reducing barriers of entry and distributor interference’, Distributors ‘gain[ing] a huge new revenue stream, eliminating costs, overheads and geographic boundaries’, electronic companies ‘sell[ing] new recorders, playback systems and auxiliary devices’ , technology companies ‘reap[ing] a windfall through patents on anti-copying software’ and service providers having ‘growing demand for lucrative broadband services’ (McCourt and Burkart, 2003:334). Also, most importantly the consumers will have ‘vast intellectual commons [where] nothing will ever again be out of print or impossible to find; every scrap of human culture transcribed, no matter how obscure or commercially unsuccessful, will be available to all’ (Mann, 2000). This theory solves all the issues being faced by consumers, artists and the industries, however the big four corporations shut this idealistic view of the world down quickly when they ‘extended their market dominance to the internet’ (McCourt et al. 2003:334) through their defeat of Napster in 2001 which forced them to close.
Although forced to close, Napster created ‘a model for a new way of thinking about community and consumption online’ (Barbazon, 2012:87) and forged the first stage that iTunes would build upon. As David (2016) states ‘one of the fundamental legacies of Napster is iTunes’ (David, 2016:55).
Stage 2- iTunes
The introduction of iTunes signifies the start of the second stage in the impact of web 2.0 on the music industry. After Napster was shutdown, many applications took its place, changing the internal way of collecting and sharing downloads to make it harder to be caught. Around two years after the closure of Napster, ‘Apple’s Steve Jobs saw in Kazaa’s example that a centralized downloading process and portal, rather than a file sharing system, would be possible. In response, iTunes launched on April 28, 2003’ (Barbazon, 2012:88). However, instead of taking the illegal route, iTunes became a ‘legitimate digital music distribution channel’ (Byungwan and Raghunathan, 2019:25), done through ‘convinc[ing] all five major record companies to license their songs to Apple for distribution via the new iTunes music store’ (Kusek et al. 2005:6). The record companies signed this deal although economically damaging due to this being the only ‘legal alternative to what they could no longer prevent legally or technically’ (David, 2016:55).
iTunes became a huge success and ‘between December 2004 and 2005 the numbers of people going to the site grew from 6.1 million to 20.1 million’ (BBC, 2006) and by April 2005 the iTunes store had ‘sold more than 350 million songs’ (Smith, 2005). This huge growth was due to iTunes manging to convert this digital computer application into one that will work with ‘the emerging “mobile” economy’ and let you ‘access your music collections anytime and anywhere, in a beloved, heavenly, customized jukebox’ (Kusek et al. 2005:14).
This idea of a ‘customized jukebox’ leads into the major argument made by the optimists when viewing the second stage of the change to a digital music industry. Barbazon (2012) states that iTunes created a ‘love for new music… [with] the sheer range, diversity and simplicity of clicking through sonic history’ going on to add that ‘a century of recorded music [is] available via tactile scrolling through a screen, listeners can live in a constantly changing shuffle of songs, without the need to be challenged’ (Barbazon, 2012:89). This is also supported by Kusek and Leonhard’s arguments that ‘music will be like water: ubiquitous and free flowing’ (Kusek et al. 2005:3). Linking this to increased accessibility in daily life and ease of just clicking to change song.
However, when it comes to the views of the pessimists, Barbazon (2012) raises the question of this new form of media being ‘devistating for the business models that had sustained record companies for the previous half-century’ (Barbazon, 2012:88). This links to the rise of the single and fall of the album, where consumers now have the choice to just buy the single instead of spending more on the whole album. This is supported by Covert (2013) as he states that ‘the popularity and ease of downloading cheap digital singles has transformed the industry. Not since the vinyl era has the single been this popular. (Covert, 2013).
Although massively popular, due to the fact users had to pay for each individual single or album, the use of illegal applications such as The Pirate Bay was still prevalent. However, stage threes use of subscriptions, is something that academics had been predicting, with Kusek and Leonhard stating in 2005: ‘can we conceive of some kind of public utility model for music that would make any and all music available on a flat-fee basis… feel[ing] free to us, but would still generate significant revenue in the aggregate’ (Kusek et al. 2005:8-11). This would once again revolutionise the music industry and enter it into stage three.
Stage 3- Spotify-
Spotify, the pinnacle of stage threes subscription model is a Swedish company founded in 2006. David (2016) states that Spotify has a particular model of business that ‘allow[s] users to stream music in exchange either for a ‘premium’ subscription payment or for no payment but with a requirement to hear advertising every so many (usually three) tracks’ (David, 2016:55).
This idea of a subscription payments is one that benefits the music industry and Spotify more than the model of one-time payments, this is due to it generating ‘steady cash flow and provide a convenient benchmark by which to measure growth’, also this subscription ‘encourag[es] increased use among heavy users, and allow[s] the provider to charge higher rates to advertisers’ (Meyer cited in McCourt and Burkart, 2003:344). Overall, this has led to ‘Spotify [having] 345 million monthly active users’ (Dean,2021) with ‘a consistent proportion, one-quarter, ha[ving] opted to pay the ‘premium’ subscription charge’ (David, 2016:55).
When looking into the optimistic views of streaming services such as Spotify, David (2016) goes on to argue that ‘Spotify represents a triumph for the logic of free sharing’ (ibid, 57), with the ability to access music for free, allowing for ‘more spending on live performances, which benefits artists’ (ibid, 57). Also, the money made through advertising now goes ‘to right holders’ (ibid, 50), meaning that the music conglomerates are finally making substantial money through the digitisation of music.
However, in truth Spotify is not as positive as it may seem. Although there is the strong believe that streaming has managed to reduce the number of illegal downloads of music. David (2016) also negotiates the theory that Spotify is in fact ‘manifesting its triumph’(ibid,57) with the free access to music. Some optimists believe Spotify has managed to “tame” the free access market, however the pessimists argue that this is only true if this “taming” is of the illegality. Going on to state that if the “taming” is in fact the ‘access to content for free, this has not diminished’ (ibid,57).
Another pessimistic view of Spotify once again comes from the music artists, with them arguing that streaming services result in them seeing almost no economic return. This issue comes from the contract structure Spotify has with music industries, with them ‘pay[ing] around 70% of its subscriber and advertiser revenues to rights holders’ (ibid,58). This revenue is then pasted down to the artists based on the structure of a record sales contract meaning musicians only get between ‘5 and 15% of net sales’ (ibid,58), however can be even less with record companies deducting ‘recoupable costs involved in the production’ (Hull cited in David, 2016:58). The situation artists find themselves in means that they want the opposite of the music cooperation’s due to them benefiting of the free-access to music as it leaves more money for consumers to spend on live performances. Meanwhile, music cooperation’s are pushing for streaming services to convert the non-paying consumers into ‘paying, premium subscription service users’ (David, 2016:60), which would reduce the amount of money artists make.
Overall, Spotify’s streaming service model can be seen as the most popular and successful of the three stages due to its legality compared to Napster and the option of allowing consumers to access content for free unlike iTunes. However, it does still have major issues when it comes to the treatment of the artists.
Conclusion-
In conclusion, through my research I have found that Web 2.0 has had a major impact on changing the music industry, through making music more easily accessible to the consumer. Using the three stages identified, I have found that the views of the pessimists often come from arguments based within the industry itself, as well as being seen consistently through the music artists, as the changes negatively affect them economically. Also, the industries views can be seen with the legal actions the major four put on Napster in the first stage and the scepticism still present with the introduction on iTunes.
However, as the negative economic effects start to become positives in the eyes of the music industries, through their partnership with streaming services, their pessimistic views also start to change, becoming optimistic. Other optimistic arguments often come from academics and the consumers not involved in the industry, as they blame the industry for being too slow to change with the technology. Also, consumers agree on the benefits of free-access markets as it allows for easier integration of music into everyday life. Overall, my evaluation shows a connection between pessimist arguments being located within the industry and optimist arguments being located outside the industry.
Bibliography-
Apple iTunes Users Growing Fast (2006) Available at: http://news.bbc.co.uk/1/hi/technology/4639880.stm (Accessed: 5 May 2021).
Brabazon, T (2012) ‘MP3 and Downloading Spaces’, Popular Music: Topics, Trends & Trajectories. London: Sage, pp. 86-90.
Byungwan, K and Raghunathan, S (2019) ‘Digitization of Music: Consumer Adoption Amidst Piracy, Unbundling, and Rebundling’, MIS Quarterly, 43(1), pp. 23-45.
Covert, A (2013) A Decade of iTunes Singles Killed the Music Industry. Available at: https://money.cnn.com/2013/04/25/technology/itunes-music-decline/index.html (Accessed: 5 May 2021).
David, M (2016) ‘The Legacy of Napster’, in Nowak, M and Whelan, A (eds.) Networked Music Cultures: Contemporary Approaches, Emerging Issues, pp. 49- 65.
Dean, B (2021) Spotify Usage and Growth Statistics: How Many People Use Spotify in 2021? Available at: https://backlinko.com/spotify-users#spotify-monthly-active-users (Accessed: 5 May 2021).
Garofalo, R (2003) ‘I want My MP3: Who Owns Internet Music?’, in Cloonan, M and Garofalo, R (eds.) Policing Pop. Philadelphia: Temple University Press, pp. 30-45.
Jones, S and Lenhart, A (2004) ‘Music Downloading and Listening: Findings from the Pew Internet and American Life Project’, Popular Music & Society, 27(2), pp. 185-199.
Kusek, D and Leonhard, G (2005) ‘Music Like Water’, The Future of Music: Manifesto for the Digital Music Revolution. Boston MA: Berklee Press, pp. 1-18.
Leyshon, A., Webb, P., French, S., Thrift, N. and Crewe, L (2005) ‘On the Reproduction of the Musical Economy after the Internet’, Media, Culture and Society, 27(2), pp. 177-209.
Mann, C (2000) The Heavenly Jukebox. Available at: https://www.theatlantic.com/magazine/archive/2000/09/the-heavenly-jukebox/305141/ (Accessed: 5 May 2021).
McCourt, T and Burkart, P (2003) ‘When Creators, corporations and Consumers Collide: Napster and the Development of On-line Music Distribution’, Media, Culture & Society, Vol.25, pp. 333-350.
Smith, T (2005) Apple iTunes Sales Tally Passes 350 Million. Available at: https://www.theregister.com/2005/04/14/appple_itunes_downloads/ (Accessed: 5 May 2021).
Woodworth, G.M (2004) ‘Hackers, Users and the Suits: Napster and Representations of Identity’, Popular Music and Society, 27(2), pp. 161-184.
Yorumlar