New Music Economy

The technological breakthroughs and the resulting consumption behaviours, that the media industry has seen, have deeply influenced the whole music industry’s operation. Although it is yet too early to estimate if the digital music market will generate as much revenue as the physical music distribution, the viability of the recording industry sector’s old paradigm based on control and scarcity is at least reconsidered.

This paradigm no longer suits the way that music consumers respond to marketing messages. Historically, audiences used to respond by buying the music. Nowadays, the audience’s action does not turn into financial profits. The new innovative tools that digital technologies have provided to the audience allow them to respond in completely different ways. Nowadays, it is arguably said that the audience’s action shows itself on the cloud: at its most, the audience goes on various media-sharing websites such as YouTube to consume the music, they communicate their fondness for song or artist on fan-sites, music forums and social networking sites such as Facebook and Twitter. Some of them make cover videos and remixes of their favourite music and post them on the cloud. At its worst, they illegally download the music on peer-to-peer networks. More often than not, they can do both.

Though, this response to the marketing messages, appearing on such a powerful medium, creates a feedback loop reinforcing marketing messages. It can play a critical role in the music marketing dynamics. This loop can give rise to trends, exposure of artists which are critical for the success of artists, making the audience as an active player in trendsetting.

The ability to control the audience’s action by targeting various marketing messages is at the core of music marketing. And more than ever before questions arise. What kind of marketing messages bring about the most positive response from the targeted audience? How to generate revenues from online audiences’ activity?

The user-centred functioning of the Internet and the growing devaluated perception of media content on behalf of the Internet consumers have led the entire record industry sector to rethink its value-chain. The major record companies’ reluctancy to enter the digital market gave a place for new players that were beforehand external to the music industry. Such companies like Apple that has implemented the Itunes music store. These new major players as well as numerous other innovative companies such as DittoMusic, came up with the new marketing strategies that lead to think about the record industry sector in another way. These players are simply redefining the recording sector in accordance with new rules in the market.