The Problem: Changing Markets and Competition
Image copyright: Nida Rehman, from stock.xchng.
The music industry has undergone a number of challenges and changes over the last 30 years. First, there was the introduction of tape media, then compact discs and latterly the challenges of music availability on the Internet. The main problem facing the small number of very large firms that make up the major part of the music industry has been illegal downloading of music and file sharing. This practice has been blamed for the fall in sales of recorded music, which has hit business profits.
The industry did, eventually, respond to the threat from downloading but for every legally downloaded tune, there are still 40 that are downloaded illegally. Despite this, the number of legal download sites has continued to increase and the number of tunes downloaded has risen sharply. At the forefront of the download industry is iTunes, Apple's pioneering service. Its success has led helped a number of other firms understand just how different the music industry has become in recent years. Customer needs and wants have changed but in some respects, the market has not changed with it as quickly. Microsoft is planning to launch what has been touted by some as the 'iPod killer', a music store and a player called Zune, which is being manufactured by Toshiba.
The traditional way of listening and consuming music has altered in recent years. The firms in the industry have not always been very good at spotting the threats and the changed wants and needs of the market. Live music, however, is still a popular form of consuming music. Some bands like The Who and Peter Gabriel have anticipated the challenges presented by bootleggers by making available official bootlegs of all their concerts. Are these sorts of people more in tune with the industry than industry CEOs? Copyright: Juan Sole, from stock.xchng
The latest development is from Universal, which produces music by the likes of U2. Universal has agreed to make downloads of its artists available free to consumers via a service run by a company called Spiralfrog. The service, which is planned to begin later this year, is planning to generate income to pay the likes of Universal for the use of the songs by including advertising on its site. Users will be able to listen to the songs but crucially, not burn them onto a CD.
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