Music Industry G322

Terminology Test

6 mins- 6 words- offer an example if you can

Distribution

Portability Web 2.0

Consumption P2P

Streaming

Sony Music Entertainment EMI

Universal Warner

Industry Overview

The Music Industry is made up of many people from songwriters, producers, artists, managers, marketing, distribution etc. It is a vast industry but is largely controlled by the record companies

The music industry is dominated by the ‘big four’ or the music majors:

•

According to an IFPI report published in August 2007 the big four accounted for 71.7% of retail music sales

This means that they operate in an oligopoly where a few companies control the market.

These companies are designed to reach the maximum audience and therefore will also have subsidiary companies that will deal with niche tastes as well as mainstream. Universal for example also own Verve

which are a specialist Jazz music company

Other than EMI the majors are conglomeratesthis means they are a multi industry company and own other companies that are not part of the music industry

EG?………………………………………………………..

This makes these companies increasingly dominant. They can also benefit from Horizontal Integration. This is where they canlink together their different companies in their portfolio and promote their products=Cross promotion

Guitar Hero

PS3

Guitar Hero Ring Tones on the Sony Ericcson

Music Rights Sony International

Read the Simon Cowell article fromYour booklet-how does this also showHorizontal integration

Vertical Integration

Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers

Can self distribute

Synergy

Using other companies/outlet to promote artists which are mutually beneficial to both companies. Sales of music through other avenues. Working in partnerships

Radio

TV

New Media

Film

Independents

These companies operate separately from the majors and often specialise in music genres and may cater for niche audiences.

Domino is now one of the longest running and most successful independent record labels in the UK.

Artists include: The Artic Monkeys and Franz Ferdinand

They don’t have the benefits of synergy and etc but offer artists better deals and are more like partnerships/freedom etc

Case Study

From the homework article:

How can you benefit from being an independent artist?

Homework

Select an independent British Record label and research the following:

Genre of musicLocationContact detailsPurchase/DownloadStreaming

What is the benefit of being signed to an indie label?

What is the benefit of a major?