Part 2: Current State of the Australian Music Industry
From Siki
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| Part 1: Music Industry in the Past | Part 2: Current State of the Australian Music Industry | |
Contents |
Responses to New Online Media Technologies
Consumers
In the process of our research, we found out that it is difficult to find substantial statistics on MySpace users in Australia. Therefore we resolved this by conducting our own survey. While at the same time, we found interesting statistics from Australian Record Industry Association (ARIA).
Around 3.6 million Australians illegally burnt a music CD in the 6 month period prior to the research and around 3.4 million Australians illegally downloaded music files via file sharing services (1.8 million of these have used file sharing services in the one month period prior to the research). File-sharing and CD burning is sharply higher in the age groups under 25.
More than 80 % of people who received burnt CDs say that they would 'rarely' or 'never' buy a copy of a burnt CD they had received. More than 50 % of file sharers tend not to buy music they have downloaded (ie. 'rarely' or 'never' buy).
Among file sharers, there is a net decrease of 12% in CD purchasing which they identify as being as a direct result of file sharing.
"The study confirms that people are increasingly comfortable with accessing music in an online environment. The challenge for the music industry is that a significant amount of music is being accessed through illegitimate channels," said Stephen Peach.
The music industry recognises that its top priority is to reverse the identified trend and to continue to respond positively to the online environment.
While this is an evolving process, key initiatives being pursued internationally and in Australia include:
- Support and development of legitimate online business models that represent an appealing alternative to consumers (e.g. Apple iTunes).
- Education of consumers (particularly young consumers) about the risks, wrongs and consequences of file sharing and CD burning. It is encouraging to note that amongst those members of the community over 25, the acquisition of music through illegal channels is not very common and that there is also a much higher awareness of the fact that such behaviour is illegal.
- Technological strategies and solutions, such as CD copy control technology.
- Litigation and effective legislation and enforcement activities.
The fact that technology has changed the way Australians accessing and listening music is furthermore being investigating througout the finding of our survey.
From the consumers' point of view, in relations to music listening experience, many music enthusiasts nowadays are conforming to this alternative way of discovering, purchasing and listening to their music off MySpace music pages. There are many perks that comes along with being part of a MySpace online community. In addition to obtaining their music interests on MySpace, they automatically become a part of a community that provides them with a sense of belonging and the opportunity to expand their network of friends. This form of "social networking" provides an avenue for them to share their journals, photos, personalities, offer their kudos and comments with other people of mutual interests.
Artists
The cultural phenomenon of MySpace is one of the greatest internet success stories of our current era. Hundreds of thousands of artists and musicians are turning to and embracing the "MySpace culture" utilizing the digital domain to further promote and distribute their music whilst reaching out to a wider, more global audience. MySpace is a godsend to many independent artists who seek fans and consumers of their music and many have been optimising their MySpace music pages to gain maximum exposure and make connections to advance their music careers.
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"Bands are going to MySpace because it’s free and they don’t have to know how to do a Web site, but the biggest reason is because there are 43 million people on MySpace.."
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A sample of the MySpace music front page which regularly changes with new updates
Examples of MySpace Music pages:
A MySpace page called 'Australian Bands' where Australian bands and musicians from all walks of life, influences and genres congregate to promote and advertise their music. It is an ideal starting point for those yearning to be recognised within the music industry and a promotional tool for bands who want to be in touch with their consumers.
How does it work? : The band’s/musician’s name and URL will be added to this page. Their songs are also put up on the site, their upcoming gigs, banners and other related promotional material. This allows other bands and record labels that are linked to 'Australian Bands' to check out upcoming bands, new song releases, show announcements and interact with thier fans.
Three of the record labels connected to this page are Trial & Error Records (VIC), Resist Records (NSW) and Sightline/Shock Records. These record labels promote Australian Hardcore/Punk/Metal/Rock music whereby most musicians from this music genre utilizes MySpace and YouTube to promote their music and form a community with their consumers. Myspace has also proven to be a successful marketing strategy for bands to congregate fans to gigs.
Based on the people of ‘Australian bands’ discretion, bands/musicians that sound 'wicked' or praise-worthy and are not signed to any record label, will have the opportunity to have their band’s name along with their songs and urls distributed to various record labels. Mainly indie record labels are connected to this site to present further promotions and exposure of the bands that are in need of a better music career.
Apart from advertising upcoming gigs, demos and releases from emerging musicians, merchandising companies also advertise thier goods and services on this Myspace page. This gives designers the opportunity to contribute thier artwork and lend thier skills to any musician or band who is interest in their work.
- An example of products/services advertising and a gig flyer -
This highlights the very soul of Myspace that is it's network distribution and interaction between people and artists in related industries. Above all, the best part about Myspace is that everything conducted within it is FREE and paticularly on the 'Australian Bands' MySpace page, it is all about "spreading the love" of the music.
There are several other bands that are utilizing the potential of MySpace for maximum exposure. A well-known Black Metal (a music genre) band from Norway called Dimmu Borgir and an alternative Hip Hop band from the United States called Gym Class Heroes are a few more key examples of artists who use MySpace not only to promote their music and tour dates but also to sell their music using MySpace's extra music promotional features. On thier pages, fans can listen to audio samples and purchase the whole album or individual tracks at $0.99 each by starting up an account and purchasing their music using credit card/paypal. On the Gym Class Heroes page, fans are able to easily download the bands music videos that offer multiple format options. Fans can download a near DVD quality video for a mere $1.99, a 640x480 m4v format for iPod, or simply watch their music videos of the page itself. Another interesting feature to point out on Dimmu Borgir’s MySpace page is the Voice Comment Feature where fans can record and send the band a voice comment that is free of charge. What is required is for them to just dial a given number and password stated on the band's MySpace page! Many established bands are using these features on their MySpace page to strengthen relationships with their fans.
Here are 2 examples of an artist's music page
- KSK
Recording Companies
The recording industry is increasingly becoming a marketplace that is fragmented with many small independent labels establishing themselves with services that are more up to date with todays technological trends. Large record companies are now falling behind in the innovative marketing game. New online media has also opened up a more accessible point of exposure to an international market, for record companies and artists alike. Online media has given artists the freedom to self promote and as a result the Recording industry is now becoming more of a guidance structure for bands to promote worldwide.
We have emailed and phoned many different recording companies, major and idependent, in order to get their opinions on the effect of the current online media revolution on the industry, however after attempting to contact approximately 20 recording labels, only two were willing to participate. This has made us restructure our main question and decide to not only focus on the recording companies perspective, but more to the consumer’s and artists’ perspective and how thier response to new media will affect and change the Australian music industry as a whole.
We assume that the negative response from recording companies could be pinpointed to two main reasons:
- Due to thier busy schedules and status they feel it will not be beneficial or valuable to make time to assist student proposals.
- The record companies might be uncomfortable addressing our research question.
Consumers
Survey on Music Consumption
In order to find specific statistics on music consumption in Australia, we conduct a survey that being completed by 100 random people inside and outside RMIT University.
Age
- 29% = 25 or above
This range of age has experienced changes in the ways of accessing music from traditional ways; such as through radio to the current online media technology. Furthermore, it affects their behaviour in purchasing music. They prefer the traditional way of buying CDs at the record store to downloading music through the Internet as they are not familiar with this technology.
- 71% = 18-24
This younger demographic has grown up with the current online technologies. Therefore, they are familiar and prefer the convenience, freedom of music choice and variety of music styles that digital downloading provides.
Genre(s) of music
Less people prefer particular or only one genre of music. Most people tend to list several genres or simply listen to all. At first, we thought that preferences to particular genre of music may lead us to a certain behaviour or action in accessing music. But from the survey, it is proven wrong and listening to certain genre of music does not affect the habit of accessing music.
Accessing music
50% of people follow the sequence of finding an artist through MySpace, then listen to the song or watch the music video on YouTube and finally, download the song through iTunes. The other 49% who do not follow this sequence have a slightly different process.
It is intresting to see that mouth to mouth recommendation through friends or relatives is still the most effective way to know about new artist. Radio comes in the second place. In the last place is browsing the artist through online media technologies, such as Google or straight to the artist’s website. This has contradicted our research finding on radio is no longer popular and online media technologies is the king.
These are the percentage of where do people access their music mostly: 33% = at home 27% = in the car 22% = portable player on the way 18% = live performances-pub, club and gigs People who are accessing music from home and car mostly prefer listening music through the radio and CD or hardcopies. While; people who listen to music from the portable player and through live performances are mostly in their younger age.
Purchasing Music
- Buying hardcopies
32% answered that they prefer purchasing music in hardcopies, such as CD and tapes for the reason of having no digital player or no knowledge in using online media technologies. They prefer buying hardcopies as they can support the artists. Hardcopies also have the value of collection and ownership, as well as resell value.
“I like CDs, I own it, you can see the cover. I like to support the artist.”-anonymous.
- Digital Download
68% prefer digital download as it has convenient access from anywhere as long as connected to the Internet. It is free and has wide range of collection, so they have more freedom in choosing particular music they like and can find rare music collection. 80% of them have no issues with the poor quality of music that are downloaded.
“I don’t want to waste my money to buy an album and only like a song.”-anonymous.
Facts on MySpace
63% of people who use MySpace stated that it does not provoke them to purchase music, they just simply use to it to find new friends or new artists. They also suggest that they will use MySpace if they are an aspiring artist to promote their music as it reaches wide audience, has convenient access and great exposure. Furthermore, MySpace costs nothing as an ffective promotional media which also means free advertising.
The other 37% who mostly come older demographic, do not use MySpace. They do not have the knowledge of using the technology and even f they do, they will not use it for the purpose of music; instead for the purpose of networking. In fact, they are conscious that MySpace has a great extended network.
“Nowadays, MySpace reaches most of young people and it is a modern way to go.”-anonymous.
MySpace is the New Black
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“Labels understand people are spending more time online than on other mediums. Radio is more constrained. MTV is down to about 10 videos a day... MySpace has become the place for awareness of new music and exclusive content. We can point music out ahead of its official release in a very organic way. Big labels in the past were the gatekeepers that would allow a band to make a living or not, but labels are signing fewer bands. Along with new production tools, MySpace allows a band to reach 43 million people. It allows a band to make a living and to fill up shows.”
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There are certain "social networking" sites that turned away musicians and artists who wants to use the sites to promote their music and acts. However, that was not the case with MySpace. MySpace embraced and welcome them with open arms. Tools were added to enable musicians to upload their music, so consumers could download and listen to them in a jiffy.
That caused an influx in consumers onto the MySpace site, not only to check out their favorite musicians/bands but also the ability to dicover other musicians that linked to the music pages that they are viewing and the consumers get to list out their favourite bands/artists on their personal myspace page.
With the known power of word-of-mouth,the music industry's attention was then captured. Hence, the great number of bands, musicians and artists now have set up MySpace pages of their own. It is not surprising if that now, seem to become a mandatory step for many bands/musicians to progress into the music market.
Below are some interviews that were recorded to find out if MySpace is actively used by music enthusiasts to listen, discover and access their music and/or promote their own music. In addition to that, bringing to light the pros and cons of MySpace music as a music portal.
Vox Pops "Responding to MySpace"
- Click on the images to listen to the audio interviews -
| Allan
| Lewis
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| Lydia
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| Zahid
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The co-founder of MySpace,Chris DeWolfe, made a statement that the MySpace team hoped to be one of the biggest digital music stores in this modern era:
"MySpace and parent Intermix Media, was bought over by Rupert Murdoch and his News Corp. (NWS) $580 million. The independent record label sector makes up for 30 percent of the music sold worldwide, with the rest from the four majors – Vivendi’s Universal Music, Sony BMG, EMI Group and Warner Music Group. Click Here for Source"
Artists
As we've mentioned above, many musicians have been utilizing the MySpace music pages to promote their music and reach out to a wider audience. Did their music sales increased? Has their fan base extended globally? We wanted to find out from an Australian artist's point of view. Here is an interview done via email with an awesome Melbourne Contemporary Classical musician named Catherine Duc, she enlightens us with how MySpace has contributed to her musical successes.
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"You can reach fans from Albania to Zimbabwe without leaving your home." - Catherine Duc |
- Catherine Duc's Interview: -
What is the genre of your music and do you use MySpace to promote your music?
Genres: Ambient, New Age, Electronica, Worldbeat, Contemporary Classical I’ve been on MySpace for about 2 years.
If you do use MySpace to showcase and promote your music, how has doing that on MySpace contributed to the success or recognition of your music?
Sales of CDs/MP3 downloads have increased. I’ve been able to share my music with a greater audience and have received requests from the press and radio stations.
Through MySpace, have you had any record labels proposing to sign you up? Or approaches for potential music collaborations with artists within your country/abroad?
I’ve received a music publishing contract from a Canadian company. I’ve been approached numerous times by artists in genres ranging from New Age to Blues to Dance for collaborations. I have also used MySpace to look for local musicians in Melbourne for live performances.
Are there any interesting features a musician can utilize on a MySpace Music page, to further promote their music and experience a greater connection with their fans/followers?
The song player can be used to showcase a selection of songs. The blog can be used to maintain an online presence and connect with fans. Also MySpace groups are useful for networking.
Is MySpace is an effective tool for musicians to promote and distribute their music to a wider audience? Why do you think so?
Yes, definitely. You can reach fans from Albania to Zimbabwe without leaving your home. If you have MP3s available for sale or have a global distributor for CDs, this is a turn-key operation. I read that in online music promotion, one needs to sites where the potential fans are and this is the best site I’ve come across so far for online music promotion.
What do you think has made MySpace culture so evidently popular now?
With all the reality TV craze, many people want to have their 15 minutes of fame. For example, vlogging (video online diaries) and blogging.
Do you also use YouTube to promote your music?
Not at the moment, but I plan to.
Your final words about MySpace Music/YouTube or to aspiring musicians who might consider MySpace or YouTube to kick off their music career?
There is an excellent ebook about promoting music on MySpace by Bob Baker, an music promotion author. His site is www.bob-baker.com
Catherine's views on using MySpace to promote her music is really positive as we can see from her response to our interview questions. MySpace opened many windows of opportunities for her, from receiving music collaborations to publishing contracts. Her recommendation on the ebook by Bob Baker is indeed a great book for anyone who really wants to rocket their music career sky high by using MySpace.
The book is called MySpace Music Marketing
Recording Companies
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"The ARIA Digital Track Chart is proof that mainstream legal music downloading has come of age in Australia. Having been at 'the birth' of the industry with BigPond Music's launch in January 2004, having recently extended our offering with digital downloads to mobiles and pre-paid vouchers, it's fantastic to see the industry has grown to become a credible player in the music retailing industry. And in the current digital age it will only get bigger and better, with fans being able to download their music to a wide range of platforms and devices."
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Established Recording Companies (the big guys)
The Australian record industry is currently dominated by few large companies that make (%) of the market, with (%) making up small independent organisations. Contrary to the common beliefs that the music industry is economically struggling under the threat of new media, the music business is currently in very good shape.
While the decline in the CD single market has continued during 2006, that decline does not demonstrate a loss of interest by consumers in the single format. Rather, it represents a significant shift in consumer preference towards obtaining singles in digital formats." (ARIA 2006)
Evidently, the problem is with the record industry and cd sales. Despite this concentration of power within the industry, the new technological media environment is pushing the big players out of the innovative loop. As a result, the recording industry is increasingly becoming a marketplace that is fragmented with many small independent labels establishing themselves with services that are more up to date with todays technological trends.
The industry’s leaders are caught up in a certainly terrifying anarchy of free information on digital networks. Rather than anticipating and exploiting trends the industry has moved to try to derail them, and to squash opportunities that change the way things are done (Leonhard & Kusek 2005).Many Large recording companies have failed to embrace new media technologies and perceive this as a threat. Large recording companies are finally feeling the pressure to embrace new media technology and have been forced to restructure the way in which they approach marketing and media promotion.
Joselyn Brown, President of Crimson Communications comments on this issue, "For example working at a record company…it may be hard to convey or convince senior management or corporate types how effective the grass roots marketing is through myspace, so I think that’s why it is probably taken so long for them (large record companies) to pick it up."
It appears that recording companies do not currently have any kind of solid strategies to embrace new media trends, but rather ways to combat the situation. Recording companies are looking at new ways of raising money, and are revisiting their obsolete models. One of the main ways in which recording companies are attempting to generate new sources of revenue is by repositioning themselves within the marketplace. Recording companies are now seeing themselves as all round ‘entertainment’ companies. Geoff King, Lecturer at RMIT University for Popular Music culture explains that,
"Record companies are seeing themselves as all round entertainment companies who want to promote their artists across technological platforms, across media."
Instead of trying to adapt their chosen distribution model (the cd) to suit the new digital music environment recording companies are still focusing their marketing on traditional ways of increasing revenue. As such, recording companies are now raising revenue by presenting a complete ‘entertainment’ package to consumers, repositioning their talent as not just musicians but entertainers. Recording companies are now taking a percentage from all other types of earnings such as merchandise etc, to create income as opposed to cd sales (Leonhard & Kusek 2005). Geoff explains that record companies are turning to merchandising, concerts, touring and live entertainment to take a cut of every form of revenue generated by artists.
Unforunately, large record companies also fail to realise that peer to peer file sharing does not necessarily have to result in a negative impact on industry sales. Rather, file sharing becomes a form of viral advertising within the online environment of which dramatically increases the chance of exposure and inturn revenue.
"Wholesale digital music sales increased dramatically during the period [2006], up by more than 250% to $27.8 million." (ARIA 2006)
It appears that in many aspects recording companies do not have a clear plan, they are responding slowly to the constant release of new technologies infinitely appearing around the corner. Loki feels that recording companies have to be quick to embrace it in order to stay ahead. Locki Lockwood, CEO of Spooky Recordings agrees,
"They are obviously feeling the pressure to embrace it, over the last three years they have watched CD sales slip considerably and they have got no choice now but to restructure and take it on board.”
Today, Record companies are realising that cds alone cannot provide the income to operate the recording industry as it once had. Therefore cd’s are utilised instead as a secondary source of income, often used to promote tours or shows. Traditional methods of marketing are still valid but are slowly dying out, and are now implemented to primarily to promote concerts for established artists. Online media music promotion is now steadly relied upon and used as a part of a 'marketing mix' with traditional modes of marketing to successfully promote artists in todays new media age.
Small and Upcoming Recording Companies
The most successful businesses do not waste time negating the new; rather they figure out how to embrace it before being outmoded by it. New Online publishing is an important income stream for small niche record companies who use technology to their advantage. Smaller recording companies don’t get dollar for dollar return on sales with traditional modes of distribution. Online marketing keeps information more up to date.
"The technology is fantastic you know, I don’t think we would…survive that well by trying to stop it, well actually we would not survive trying to stop it." (Loki Lockwood, CEO of Spooky Recordings)
For smaller recording companies, publishing is the primary source of income that keep these companies afloat. Publishing on a networked environment is an important income stream to capitalise on the advantage of international publishing and distribution that the web offers. Smaller recording companies have already embraced this strategy and are using it to their advantage, placing them in the forefront of innovative music marketing.
The Advantages of New Media Technology for Recording Companies
This new online technology provides record companies with an easy access point to a worldwide market which is above all free. Utilising new technology gives exposue to bands overseas and in Europe, establishing their name before they decide to tour. This give bands a worldwide audience to easily promote to and access to a worldwide market. As such, Australian artist are now becoming international artists by utilising the international online marketplace. Furthermore, fans get more information from myspace and online media distribution as opposed to street press which offers a advitorial point of view and recording companies must pay for exposure which in the end only offers a single subjective point of view about the artists. Traditional modes of advertising e.g. tv, only produce a ‘scattergun’ effect to the record companies target market. It is harder to evaluate if this model will reach the intended audience. Webites such as Myspace allows record companies to advertise their artists directly towards a specific niche communities found online. Because of this it is harder to use older forms of media such as tv to target younger generations because they are now spending most of their time online. Hence, online new media websites such as myspace offer a more direct mode of marketing towards niche micro communities that recording companies and bands want to inform. When you are online you are more sure of the audience you and to attract. Despite this advantage, "…it will be harder for new artists to get to any level of meaningful exposure when there are more artists trying to get attention in the various distribution channels. Recording companies can elevate artists from the saturated online music market." (Leonhard & Kusek 2005) In order to be heard above the masses of music on myspace Loki Lockwood claims that the benefit of a label is that they already have an establishment within the marketplace. Furthermore, professional music production that recording companies offer will distinguish unknown artists within the flooded online music marketplace.
The Threats of New Media Technology to Recording Companies
However new media can pose a threat to recording companies because bands can get deals to sign direct to digital download sources such as itunes to avoid the recording and publishing loop, bands are beginning to bypass record labels. Bands feel like they don’t need a recording company for they can publish online for free or next to nothing.
"What this means is that a musician does not have to be a recording artist or a performer to thrive in today’s music industry. Digital technology has made it easier for artists to leverage their creativity. This makes artists more powerful, and the average record labels offerings seem much less significant in comparison." (Leonhard & Kusek 2005)
Recording companies are beginning to see that more artists are setting up their own labels because they can release music online, the growth boom of such sites as MySpace allow more rock acts to bypass radio and TV and the whole physical record distribution (Eliezer 2006). Artists utilise youtube also because it is a free and easy way to get their music video seen as opposed to attempting to publish on MTV which is impossible for most upcoming artists.
Interviews
All quotes from industry professionals are taken from recorded interviews conducted by our group members. Please feel free to listen to the full interview from each industry professional to gain a deeper insight into our topic:
Interview with Geoff King: how the recording companies adapting to the current online media technology
- Click on the images to listen to the audio interviews -
Interview with Joselyn Brown of Crimson Comunication
- Click on the images to listen to the audio interviews -
Interview with Spooky Record
- Click on the images to listen to the audio interviews -
Predictions
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“Social networking is one of the best examples of what the Web can do: connect people, whether it’s at the micro level or the macro level, one-to-one or hundreds of thousands of people at once,”
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The online new media revolution is currently creating micro cultures. This online environment is breaking music audiences into tastes rather than destinations to attract audiences. These online markets such as Myspace are an advantage for artists to DIY music promotion and specifically target thier desired fans, but as these micro communities expand so too will the degree of independant artists trying to take advantage of this revolution. We predict that the future of the Australian recording industry will evolved into a market that is fragmented into many small niche companies, tailoring to specific communities and genres. Whilst we feel that large recording companies that have previously dominated the industry will die out, recording studios will not be abolished because artists will still value studios to produce high quality music to separate musicians from the saturated micro music communities developing on the internet.
