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Selling Music: Music Industry Marketplace

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Ron Marschall

on 27 February 2018

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Transcript of Selling Music: Music Industry Marketplace

The only constant in the music business is it's always changing
Music Industry Marketplace
what are we selling?
Rapid change in delivery systems
Internet distribution and sales such as iTunes and Napster
When selling music
The current recorded music marketplace is very volatile
Consolidation of major record labels and more competition from independent musicians and alternative labels
You must make a radical shift from thinking you are selling a product to understanding you are selling an emotional experience
History of the Marketplace
knowing where we've come from can give us a hint as to where to go
Late 1800's to early 1900's
sheet music from Tin Pan Alley sold in department stores and music stores through "song pluggers"
The phonograph record invented by Edison and pioneered by RCA, Victor and Columbia, created the ability for the mass distribution of pre-recorded music
Wurlitzer invented a coin operated playback machine "juke box"
Juke joint (or jook joint) is the vernacular term for an informal establishment featuring blues music, dancing, and alcoholic beverages, The term "juke" is believed to derive from the Gullah word joog, meaning rowdy or disorderly
Consolidation of retail market
Record companies saw radio as a threat and many predicted the end of records.
Radio was a free medium for the public to hear music for which they would normally pay.
Indeed, the music recording industry had a severe drop in profits after the introduction of the radio.
For a while, it appeared as though radio was a definite threat to the record industry.
Radio ownership grew from 2 out of 5 homes in 1931 to 4 out of 5 homes in 1938.
Meanwhile record sales fell from $75 million in 1929 to $26 million in 1938
(with a low point of $5 million in 1933).
1940's and 1950's
basic marketing and promotion of music stays in place
Record companies release the 45 RPM "single" and the 33 RPM "LP"
"Stereo" recordings are introduced and radio stations branch to FM for stereo broadcasting
(AM -amplitude modulation, FM - frequency modulation)
record companies now releasing music by bands that write their own music instead of matching music with their entertainers
Labels began to sell "lifestyle" items along with licensed merchandise
the cassette tape is introduced as a consumer format, again the record companies fought it fearing people would share and "pirate" music.
Tape sales went thru the roof and profits for the record companies took a huge leap
as a backlash to the consolidation of the major labels and retail stores
independent labels and distribution companies emerge with a focus on "good music"
standard price of a CD (typically with one hit song and majority filler) hits $18.99
the ability to purchase singles is rare if at all
Today’s Marketplace
New forms of entertainment competing with music sales such as the internet, video games, cable
and on-demand TV
More consolidation of Record Companies "The Big Three"
Consolidation of supply chain. retail conglomerates are controlling the flow of product to the market
Consolidation of radio stations by media conglomerates control radio access to music
Expansion of the Internet is providing market solutions for individual musicians and small businesses squeezed by conglomerates
historic market leaders are using every economic and legal means at their disposal to control music in cyberspace
New technologies are changing music commerce
the CD and 99¢ per song are dead!
do you fight it?
Or do you see the fall of the old system as an opportunity to create a new one?
Of course sales are predicated on getting radio play or “Spins”
One of the benefits of changing formats is that consumers need to re-buy their entire record collection on the new format!
CD's are introduced and MTV ushered in a new era of getting music to audiences
LP introduced in 1948
Dieter Seitzer
the same year as the CD
Karlheinz Brandenburg
after 13 years of work Brandenburg succeeded
in creating the
... and AAC
Selling Music in the Entertainment Market Place
Continually increasing public awareness and attraction to a product or service
Shaping a product in a way that meets consumer wants and needs
the stuff that you pay for
the stuff you don't "pay" for

Project Hubcap
nearly 17,000 cases against music fans
Jammie Thomas
for downloading 24 songs from Kazaa

Dell Glover

Rabid Neurosis (RNS)
recieved nearly $200,000 a year from bootlegging
obscurity is a far greater risk to artists than digital piracy
Fame won't make you rich but you can't get paid without it
The Players:
• The Creators
• The Investors
• The Intermediaries
• The audience
artists, songwriters, producers
Record Labels, Publishing Companies, Private Investors
Distribution Companies, Aggregators and Retail Stores
Today, many independent labels are staffed by people who used to work for the majors.
Telecommunications Act of 1996
Robert McChesney- "is widely considered to be one of the three or four most important federal laws of this generation."

Twenty years later the devastating impact of the legislation is undeniable:
In 1995, FCC rules forbade companies from owning more than 40 stations ...
iHeartMedia (formerly Clear Channel Communications) now owns more than 850!
Full transcript