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How technology has changed the music industry

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The digital revolution has reshaped the world, but few industries have seen the rapid pace of technological change seen in music over the last two decades – and it has been a tough learning curve for the industry.

At the end of the twentieth century, the music industry was on top of the world with record CD album and single sales generating huge profits. However, the constant growth in sales had caused complacency and the industry ignored the rapid internet take-up across much of the world.

In 1999, the music industry still thought of music in physical terms, but in colleges and universities across the world young people were starting to see music as digital files – MP3s. The compression technology meant that hundreds of songs could be burnt onto a single CD, which could then be shared amongst friends. And then came Napster.

Napster turned the whole idea of music sales on its head and gave people a way to share and download music for free, and the music industry panicked. Rather than seeing Napster as a sign that young people were fed up with paying £4 for a CD single, and that people wanted their music in digital form that could be played back on MP3 players that fitted in their pocket and did not skip with every step, the music industry launched into a series of lawsuits.

Eventually, the music industry prevailed and shut Napster down, but by then the genie was out the bottle – people wanted their music as MP3s, and when Apple released the iPod in 2001 it signalled the start of a very rapid decline in CD sales across the world.

Industry executives at the time would tell you that they were just trying to protect jobs, but fighting against the tide of technology rarely works out. In fact, as economist Andrew Charlton points out, as technological progress overtakes some roles, “new jobs are being created in areas where humans have an advantage in thinking creatively, interacting with people and responding to emotions”.

Nonetheless, the industry still did not learn its lessons and tried to force restrictive and anti-consumer DRM on any legal music download store that tried to open its doors, trying to limit people to only being able to use their store-bought digital music on a handful of devices, missing the point of MP3s entirely. After years of legal battles the industry was forced to react to the market forces of piracy and allow DRM-free downloads from stores like iTunes, but it took years.

The industry also failed to see how streaming services like Spotify could have fight off the threat of piracy by offering ad-supported streams of a huge catalogue of music for free, and the major labels were very hesitant to sign up at first. Even now, after the service has matured for a number of years, some executives fail to see that the value of free streams is to fight off piracy and protect revenue sources, not always to directly deliver sales.

Music has always been the creative industry at the forefront of technology, whether it was instruments like the theremin that was adopted as a symbol of the technologically advanced future by the Soviets in the 1920s, or recording devices like the logic piano from 1869 that Andrew Charlton discusses in his book as the start of automation. At some point, we can all hope the music industry learns to embrace this and lead rather than fight against the tide.

Photograph by Magnascan

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