The History of Music on the Internet
 

Internet Radio
 

Napster - A Case Study
 

MP3 Encoding
 

Secure Digital Music Initiative
 

The Future of Music on the Internet











 



The Future of Music 
on the Internet
 


Topics:

Introduction
Music, the Internet and its Future
The Future of Internet Music Distribution
The future of MP3



Introduction

In only the past ten years the developments in music on the internet have been astounding.  We have seen the develpment of such technologies as napster, MP3 and many more.  The internet has lead to the wide spread desemenation of music, making any type of music available to anybody in the world.  This essential idea is why it has been so succesful.  Everyday the internet is expanding more and more and this is why the idea of  music on the internet will grow and grow over time.  Of late there has been much talk of free music on the internet - is it fair to the recording artists?  This is one area which will need to be settled before internet music is recognised as a viable medium. 
 



 

Music, the Internet and its Future

The rapid growth of Internet users all aroiund the world has brought many issues to light. Among them are the questions of whether paper based publications such as letters, newspapers, novels etc. have a viable future and how changes driven by the ease accessibility of information on the Internet will affect the industries and occupations that depend on publication and storage of the printed word. However, similar speculation relating to the music industry and the Internet have been largely ignored up until recently. The Internet seems poised to revolutionise many aspects of the music industry including: the publishing of music, artist royalties for use of copywrited material and the sale of recorded music.
 

Theories Related to Future of the Industry

There are currently three arguments 

 1.  The industry will be unchanged because of the MP3's less-than-CD-quality sound and its large disk space requirements.  In other words, the MP3 technology will be shelved along with other music technologies such as the 8-track.

2.  The industry will eliminate traditional record labels by eliminating the need to manufacture and distribute the physical product of CDs. 

3.  Argument 3:  MP3 will simply whet music lovers' appetites for the benefits of a technology that can deliver songs online.  Because the majority of music buyers are not willing to sift through thousands of obscure bands, web sites, etc. they are not going to be willing to completely shift to Internet music technology.  Internet music technology will have a place in the market, but will not completely dominate it. 

Let us talk for a moment about 2 above.  As we look to future of music, the most obvious change we can expect is the dismantling of traditional physical music retail operations i.e the music shop.  This is not to say that retail sales of music will be obliterated, but to say that retail sales will possibly reemerge in a different form i.e. through the Internet .  The Internet is accesible  nearly anywhere in the world where music buyers want to purchase music.

Another change is the demise of the manufacturing and distribution infrastructure that currently supports traditional music retail stores.  Currently, the Big Five record distributors control the physical movement of CDs.  80% of the resources of these five organizations are devoted to the manufacture of physical CDs and moving them from one place to another.  As the Big Five sees 80% of their operations disappear, they will be forced to focus on the remaining 20% which is comprised of developing the careers of recording artists and promoting those careers through radio and TV promotion, tour support, etc.  However, as the digital revolution continues to evolve, these functions will become even more important. As more consumers have more access to the Internet, aspiring recording artists will need experienced guidance, financing and promotional resources in order to create quality music that will reach audiences more mature and more sophisticated about music.  Record companies will have more distribution opportunities, giving them more ways to expose and distribute their artists' product to the consumers with more precise methods for targeting the ideal customer for their music. More revenue opportunities mean more abundantly available, affordable music. This will be good not just for established artists who will continue to see more money spent to promote their work but for new artists hoping someone will invest in their work. In order to be noticed above all the noise; this marketing expertise will be in high demand. 
 



 

The Future of Internet Music Distribution

Music distribution using MP3 compression through the Internet has become an important happening and a major concern of the recording industry. MP3 is just one of many forms of compression that is available for audio. At this time it happens to be wildly popular and is likely to remain so. The popularity MP3 is driving changes in the music industry that will bring a leveling of income to composers and performers, increase in their share of gross revenues, and drastically increase the number of composers and performers that are accessible to the music purchasing public. 

After MP3 as finished remodeling the recording industry, the recording industry will consist of a three players: 

1.  Remnants of the current recording industry. 
2.  Internet companies that sell CDs. 
3.  Internet companies that sell individual recordings.

First there will be the remnants of the current recording industry. This area will contain the fewest artists and will operate much like today's recording industry operates. The major difference will be that the ease of creating and distributing unauthorized recordings will limit how successful any artist can be. The more successful the artist the higher the percentage of unauthorized recordings being passed around. Efforts to create a copy proof format will fail because at some point in getting the audio from the CD to the speaker the audio has to be converted into an analog signal that can drive the speaker. This analog signal is in the computer in digital form before it is sent to the audio card and can easily be recaptured and converted into any format without loss of quality. In the worst case the line output can be patched into the line input and still have minimal loss of quality. The loss of quality would be nothing compared to copying cassette tapes. And after the first digital copy is made then all subsequent copies will have the same quality as the first.

Next will be Internet companies that handle CDs recorded by full-time professional musicians. They will have downloadable (reduced audio quality) selections from the CD available at their sites. The consumer will listen to the download to determine if they want to order the high quality CD. MP3.com is slowly sliding toward this model.

Finally will be Internet companies handling individual audio files from anybody who has a yearning to create music. These files will be of the highest quality that the individual artist can produce since the file is the product that is being sold as opposed to being a step on the way to selling a CD. These files will be distributed as shareware. Artist earnings will come from shareware payments and more importantly from having their music included in custom CDs where the consumer will pick which audio selections to put on the CD that they order. MP3Shareware.com is a new Internet company intent on capturing this market. 

The leveling of income will occur because at the high end the limiting factor of unauthorized recordings will reduce how financially successful any artist can be. The middle and base layers will provide exposure that was impossible in the pre-Internet recording industry thereby increasing the possibility of financial success for more musicians.

In the new recording industry, artists will retain more control of their copyrighted products and receive a larger percentage of the profits. Both MP3.com and MP3Shareware.com offer a 50% split compared to the small percentages now given by record companies.

With the Internet, anybody can put their music online quickly and easily. Mediation sites such as MP3.com and MP3Shareware.com offer several important advantages over private sites such as handling credit card transactions, a high hit rate, and the capability of aggregating many artists to produce custom CDs. Most private sites will simply provide a link to their music on the mediation site of their choice.

Internet audio distribution is providing composers and performers choices that have never been available before.
 



The future of MP3
 

Right now mp3 is changing the way we receive and listen to music.  As internet technology becomes more advanced people are finding ways to make everything for free.  For example, long distance calls can be made from internet sites, maps can be downloaded for anywhere in the country, even internet service itself can now be free.  Whether it is for profit or fun, internet savvy computer programers are finding ways to undermine the 'old economy'.  New laws can not be passed fast enough to stop the internet revolution.  Napster is actually using a recent law called the Digital Millennium Copyright Act as a defense to the pending lawsuit it faces with the Recording Industry Association of America.   Even if Napster is eventually shut down, there are other programs available right now that can not be stopped so easily.  Gnutella is a file sharing program that links individual computers together without a centralized server.  Since Gnutella can share any file type, people are claiming that movies will be distributed in the same way once broadband internet access becomes available in more areas. 
    The bottom line is that the music industry is going to have to adapt to new technology.  One way would be find another way to make money on recorded music than just selling CD's.  For example, many online retailers are losing money on their merchandise in order to be competitive but are making up for this loss by selling ad space on there sites.  Even if they can't stop people from sharing copyrighted music, people will still by CD's.  It is much easier to purchase a CD than find and download every song on that CD and put it on a recordable media.  Mp3 sharing poses the bigest threat to music singles since the consumer is only interested in one song.  It also poses a threat to an artist who releases 1 or 2 good songs from their CD but the rest of their CD sounds like it was recorded in two days.  The recording industry has to evolve and figure out how to use new technology to make money instead of clinging on to the past.  If they don't figure out how to use digital media to their advantage, they will be left behind in the new millennium. 

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