The Digital Revolution vs. The Music Industry

In the 1990’s and early 2000s, the music industry was at it’s economic peak. By 2001, CD sales had hit an all time high of $15 billion. Record labels were in charge of every aspect of the artist and the direction of their music. Groups like TLC, N’Sync, and The Spice Girls were all created by record executives almost to extort money out of them via their contracts. The label would get a percentage of actual album and single sales but could and would take a higher cut if they were also paying for “promotional” costs. Promotional costs meant anything from music videos that easy could rack up past $500k, to television advertising spots. During this time, many artists were getting taken advantage of, like Toni Braxton. After her second and most popular album, “Secrets”, sold 20 million copies in 1996, Braxton received little to no financial reward. She attempted to unsuccessfully sue her record label, La Face, and later had to file for bankruptcy.
As technology advanced at such a rapid pace, the music industry failed to keep up. By 2001, music and videos could easily be emailed and downloaded from the internet from sites like Limewire and Mediafire for free. These downloads didn’t generate any revenue for the artists or the labels and CD sales started to plummet. The creation of iTunes and the iPod in 2005, became a temporary saving grace for the industry because of it’s massive success but was really just a temporary fix. From 2009-2013, music was so accessible many albums would be “leaked” online weeks before their set release dates. Artists like Lady Gaga and Jay-Z took action against music piracy. Jay-Z created the streaming service Tidal that gives 100% of the revenue to the artist and Lady Gaga took legal action against many of the websites that leaked her 2013 album “Born This Way”.
What will really save the music industry are services like Spotify and Apple Music which are membership only music streaming. Artists will get paid through ads and the service is getting paid through memberships so it is already creating revenue. They need to gain more supporters but in the direction it has been going, the industry is already climbing back up economically.


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    Tobie Erno

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    November 27, 2017

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