Digital Creation and Distribution of Music:

Revisited in 2005

INTRODUCTION

•2005- technology can create music with personal computer and distributing the tunes online.

• Artist were creating high quality music without being encumbered by any of the frictions

• One record label, Universal Music Group, was a forefront of the recording industry in attempting to capitalize on the new channels created by digital technologies.

A PODCAST HEARD AROUND THE WORLD

•Podcasts is the name from “iPod”+ “broadcast”

•Podcast provided a new capability for listeners to download audio files from the Internet and subscribe to automatically receive future audio files from the same source

A PODCAST HEARD AROUND THE WORLD

•Podcasting used XML-based software code called RSS that enable Web browsers and other clients to find and present constantly updated podcasts, so users could automatically receive podcasts from favorite Web sites.

DISTRIBUTING PODCASTS

•Podcasts have been around since 2004 and increasing to 15,000 podcasts in September,2005.

•Podcast service that would allow subscribers to receive podcasts of favorite broadcast and not been broadcast for a fee of $6.95 a month.

DISTRIBUTING PODCASTS

•Podcasting was the preferred channel for a new generation of consumers who used computer or portable digital music players as their primary entertainment devices.

•Estimates of growth varied, but forecasts of podcast usage in the US over next 5 years ranged from 10-60 million user.

CREATING MUSIC ONLINE

•There were collaborations that took place completely online.

•Most sites were free to use, earning money with advertisements that appeared on the sites.

•About half of the musicians who posted music to the sites did it “just for fun”, the other half were “semi-serious” to serious musicians.

THE STRUCTURE OF THE RECORDING INDUSTRY

•The four largest labels together controlled over 70 percent of the global music market.

THE STRUCTURE OF THE RECORDING INDUSTRY

•In May 2005, UMG largely got out of the physical manufacturing of music.

THE RECORDING INDUSTRY VALUE CHAIN

•Recording labels increase in the form of newer consumption channels such as downloads and ringtones for mobile phones.

THE RECORDING INDUSTRY VALUE CHAIN

•Artist & Repertoire•Manufacturing and Distribution•Promotion•Publishing•Retail

UMG : MAKING MONEY ONLINE

•UMG had a division, called eLabs

•UMG’s eLabs focused on finding ways to use digital technology to distribute more UMG content.

•Content was distributed in the form of ring backs, video ringers, voice tones, MV etc.

THE IMPACT OF DIGITAL TECHNOLOGY ON UMG

•Physical product and digital are consider in making decisions.

THE IMPACT OF DIGITAL TECHNOLOGY ON UMG

•The cost of producing and marketing the product is the same, it is just put out through less expensive channels

•New technologies for making music haven’t really impacted the way that UMG create music

•Opportunity for independent artists and labels

THANK YOU FOR YOUR ATTENTION