Article on Ipod: Issues raised regarding change in the music industry

Like everything else Apple does, its store layouts are ruthlessly designed. Pricey laptops and desktops by the door to lure you in, then iPads, then iPhones, then iPod Touches. The only table not occupied by a small cluster of people prodding, touching and fondling the technology is right at the back, in the store's depths. It's the table with the iPods on it.

"The iPod's essentially finished, give or take,"

"Sales have been in decline for some time. The converged media device is the way forward." In other words: the iPhone, the iPod Touch and the iPad – devices that the iPod paved the way for, devices that have helped push Apple's latest profits to a record-breaking $20bn. If the iPod now finds itself as the least-loved of the company's shiny portable devices, you get the sense Apple is probably OK with that.

Today, the iPhone has effectively replaced the iPod. Its ability to download apps, and the connectivity of the device, not music, that's now driving sales. "The US market for digital music appears to be flat," says Enders. "It has flattened well before everyone, and certainly the music industry, hoped. At this point the real issue is that more than 75% of recorded music sales are still on CD."

Music Audiences Questionaire

Would you buy music if you saw it on TV, a film or an advert?

Yes                                  No

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How do you usually access the music you listen to?

Illegal downloads      CD's      iTunes      YouTube

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Are you influenced by the media to listen to different styles of music?

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When you buy music do you take notice of the company in which the music is produced e.g conglomerate (Universal) or Independant (Domino)?

Yes      No

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Are you willing to pay for the music you listen to?

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The online revolution has proved as damaging to independent labels as to multinational companies. How far do you agree?

Many voices in the music industry have claimed that internet piracy has reduced

sales of legitimate CDs and that illegal MP3 downloads have become a substitute

for legal CD purchases.

in CDs sales is due to the increasing and uncontrollable number of illegal copies

available using peer-to-peer (P2P) technologies.

Representatives of the music industry have claimed that the very existence of the industry is at

stake. Reinforcing copyright laws, by implementing technological protection and by actively

enforcing legal protection through lawsuits targeted at developers and users of P2P

networks.

Yet, defenders of online distribution technologies have argued that MP3

downloads offer a new way for consumers to try new music. By exposing internet

users to a larger variety of products, file-sharing technologies could allow them

to increase the set of albums they have a potential interest in, thus increasing

music sales.

In the news-breaking Napster case, the court found that the use of the file-sharing technology

harmed the music industry partly on the ground that illegal music download reduced legitimate

sales of CDs.

Advantages and disadvantages of convergence for the music industry.

Technological convergence is the tendency for different technological systems to evolve towards performing similar tasks.

The line between recording and playback is quickly blurring. And so is the line between professional and amateur. Technology has made new products smaller, feature-rich and more affordable. When anyone can record their music and offer it on the web for the whole world to enjoy, there is suddenly little difference between musicians and listeners. The music industry is rapidly converging and new market opportunities are being created every day.

We all remember Napster and the amount of controversy it created, as well as its impact on the record industry. A similar transformation is underway in the world of recording, and it will affect all of us as both consumers and producers of audio content. This transformation is called convergence, and in our view it will take three distinct forms:

1. Convergence of the Producer and Consumer Markets

2. Convergence of the Recording and Playback Domains

3. Convergence of the Computer Tools for all of the above

The first type of convergence is most easily illustrated on the example of a club DJ. Here we basically have a consumer who grew up listening to records, who has evolved into a producer of original content by creating innovative musical collages for the audience to enjoy. This type of convergence and the associated consumer trends have sprung new life into the declining turntable and record needle industries and given birth to new market segments in DJ mixers, effects, lighting and sound reinforcement equipment.

Computer software like ACID™ extends this trend to the desktop user through sample manipulation and adds to the creative possibilities of people without the training and experience to play a "real" musical instrument. More people can generate original content now than before. The line between the consumer and the producer of content has blurred.

iPod took the world by storm in 2002 with over a million units sold, far surpassing the sales of all other MP3 players combined. Curiously enough, the processor chip used in many MP3 players is capable of not only playing back, but also encoding MP3 files onto the hard drive.

This means that a device that fits into your pocket can theoretically also function as a stereo recorder, which in turn opens up possibilities for recording live shows, practice sessions and demos on a small budget. No longer do you need an expensive studio and racks of gear to put together a demo. If all of your instruments are electric, you can easily record a complete project in a spare bedroom. The home, which has traditionally been a playback-only domain, now doubles as a recording domain as well.

How far do you think developments in technology have changed the way the music industry operates? Consider how new technologies have changed the relationship between audiences and artists?

In the 50's music was mainly available in two ways. These were the radio and Vinyl records. Having easy access to the radio meant that people could listen to all the latets music every week. If people had a record player, they could purchase the vinyl records they wanted from the shop and play them at home. Vinyl records were like CD's are today.  

Many record companies died out as quickly as they had formed, and by the end of the 1980s, the "Big 6" — EMI, CBS, BMG, PolyGram, WEA and MCA — dominated the industry. Sony bought CBS Records in 1987 and changed its name to Sony Music in 1991. In mid-1998, PolyGram merged into Universal Music Group (formerly MCA), dropping the leaders down to a "Big 5". They became the "Big 4" in 2004 when Sony acquired BMG.

In the 21st century, consumers spent less money on recorded music than they had in 1990s, in all formats. Total revenues for CDs, vinyl, cassettes and digital downloads in the world dropped 25% from $38.6 billion in 1999 to $27.5 billion in 2008.

In the early years of the decade, the record industry took aggressive action against illegal file sharing. In 2001 it succeeded in shutting down Napster (the leading on-line source of digital music), and it has threatened thousands of individuals with legal action. This failed to slow the decline in revenue.

However, some academic studies have suggested that downloads did not cause the decline. Legal digital downloads became widely available with the debut of the iTunes Store in 2003. The popularity of internet music distribution has increased and in 2009 more than a quarter of all recorded music industry revenues worldwide are now coming from digital channels.

The turmoil in the recorded music industry changed the twentieth-century balance between artists, record companies, promoters, retail music-stores and the consumer. As of 2010, big-box stores retail more music than music-only stores, which have ceased to function as a player in the industry. Recording artists now rely on live performance and merchandise for the majority of their income, which in turn has made them more dependent on music promoters like Live Nation (which dominates tour promotion and owns a large number of music venues).

Many newer artists no longer see any kind of "record deal" as an integral part of their business plan at all. Inexpensive recording hardware and software made it possible to record reasonable quality music in a bedroom and distribute it over the internet to a worldwide audience.

Changes in the music industry have given consumers access to a wider variety of music than ever before, at a price that gradually approaches zero. However, consumer spending on music-related software and hardware increased dramatically over the last decade, providing a valuable new income-stream for technology companies such as Apple Inc.