An introduction to the music industry

The Digital Age

It's no secret that the music industry is constantly changing in some significant ways.  For the last few years physical CD sales have been declining rapidly and although digital download sales are consistently increasing, they are still not making up for the loss incurred by the decrease in the physical market. 

Piracy and copyright infringement are partly to blame, the internet makes file-sharing easy and convenient and any music intended to be released commercially to the mass market is inevitably prone to being shared illegally on peer-to-peer file-sharing networks.  However, this has always been the case, even before the internet music consumers would lend each other tape cassette's and CD's in order to copy them.  The ratio may have increased but with two billion internet users in the world so has the volume of the market.  Still, this doesn't change the fact that less than one in twenty artists that gets signed manages to recoup their label's expenses.

In order to be successful in the music industry, the above facts need to be embraced in today's world of digital technology.  It's an ever-changing scenario that requires innovation and foresight on where the industry is heading, especially with all the changes taking place.   All digital downloads are now chart eligible regardless of whether the artist is signed or unsigned giving unsigned bands like Koopa the chance to thrust ahead into mainstream exposure.  Although this levels the playing field for unsigned artists it also makes the market a lot more competetive.  Instead of being in competition with all the major label artists, all the artists in the world are now in competition with each other.

Financing

There is currently a belief that musicians and bands no longer need the backing of a label in order to make a success of their career.  Whilst this may be true to an extent due to fan-funding platforms and music licensing opportunities, it's naive to think that an unsigned artist would be capable of selling tens of thousands of digital downloads without the knowledge, experience, contacts and financial support of a label.  After all, the label provides an already established channel via which to market the artist which is why a label invests so heavily in their artists. 

Financial support to this extent is not required by unsigned artists unless you're aiming to produce and promote a physical product, in fact it would be a complete waste of money if the established industry contacts, experience and knowledge is not present as you wouldn't be channelling your music towards the right consumers.  Being independent and keeping costs down is becoming the preferred way of doing things for many musicians all over the world.  The finance required is then kept to a minimum while the artists retain creative freedom and gain a much higher profit margin.

Continued...part 2