Archives For record industry

Industrial Evolution vs. Revolution

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In this rapidly changing market climate logic would lead one to assume the record industry would be adopting dramatic changes in its business model.  However, the recording industry’s business model has remained largely the same since Emil Berliner developed the gramophone in 1887.  Berliner’s improvements over Thomas Edison’s Etching Tin enabled the device to mechanically reproduce sound from a flat record rather than a tinfoil cylinder.[1] A flat record that was easy to mass-produce.  Berliner’s innovation thereby created, quite literally, the record industry.

While the medium of storage has evolved from records to 8-track to tape to compact disc and so on, the fundamental business model has remained.  The traditional major label model is as follows: (1) recorded music is placed onto a mass-producible object (e.g. compact disc); (2) the physical components, such as jewel cases and inserts, are manufactured; (3) the record is distributed to retail outlets; and (4) the record label promotes and markets the album.[2] The traditional model is wholly dependant upon the physical distribution of a tangible and mass-producible good to make a profit. Continue Reading…

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A Battle of Epic (Inverse) Proportions

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The record industry’s poor financial state has received frequent but shallow coverage by the media.  Most often the headline is followed by a sound byte about pirates and the music-stealing teenagers that support them.  While the proliferation of piracy is certainly a factor in the industry’s financial health, it may simply be a symptom of a much greater war; a struggle between two industries that has been largely ignored by the media, Content vs. Technology.  Some savvy pundits have described the battle between California’s content and technology industries as an economic civil war.[1] Here, the virtual Mason-Dixon line divides southern California, the historic capitol of content creators and rights holders, from northern California’s Silicon Valley, a potent cluster of technology juggernauts like Apple, Facebook, and Google.  Although content currently appears to be losing ground to technology’s blitzkrieg in this most public of battles, both content and technology will need to find an amenable compromise -a treaty of sorts – to thrive together in the marketplace.

The value of content is much broader than its oft-celebrated sociological, psychological, and cultural benefits.  Content is a source of not only geopolitical capital and influence abroad but also tremendous wealth for our Country.  Some might be surprised to learn that intellectual property, including compositions and recordings of music, is the United States’ number one export. [2] In a time where much of America’s manufacturing has relocated to more cost-effective locales, such as China, intellectual property has maintained its position as a dominant source of revenue.  Maury Yeston, Ph.D, a multiple Tony Award-winning Broadway composer and former director of undergraduate music studies at Yale University, encourages us to “consider the massive and disproportionally [sic] positive influx of income the export of our intellectual property has on our nation’s balance of trade, not only in song, but also in film and theatrical products.”[3] Intellectual property is one of a shrinking number of “products” America exports with a positive trade balance but for some reason it is losing the consumer adoration and respect it once had. Continue Reading…

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