The Democratization of the Music Industry

The current music market is changing in terms of recorded content; entry into the digital age has given access to the common user to generate high quality recordings at home that would otherwise have been impossible to produce during the pre-digital era. If we were to compare and contrast the differences between the commercial music world and the independent music world, ultimately the research would support the advent of a new resurgence that is being dubbed as a time stamped event known as the “democratization of the recording studio”.

Since there is no statistical data available to directly measure how much content has been produced as a result of the democratization of the recording studio, a valuable reference comes from Zack Greenburg’s article in Forbes titled; “The World’s Highest-Paid Musicians 2012”. Interestingly enough Dr. Dre is ranked #1 with $ 110 million in pretax earnings. Ironically Dr. Dre hasn’t recorded or released an album in a decade. Dre’s revenue was amassed by live performances and his new headphone line called ‘Beats’. Some of the top money makers on the list include: Roger Waters $ 88 million, U2 $ 78 million, and British Boy Band; Take That ($ 69 million). Approximately 2 out of the top 25 money makers were post digital age musicians (Taylor Swift, Justin Beiber). Almost all the artists generated their revenue outside of record sales. An inference can be made through Greenburg’s article on a disparity of the recorded digital sales market due to the alternate revenue streams that have been adopted by the industry.

The current state of the market could be viewed as a growing pain in the innovation cycle with the introduction of the first peer to peer (Napster) more than a decade ago. Legal restructuring in terms of asset management and licensing to subscription services like Spotify has left the industry and its artists with more litigation than streamline economics. One could assume this is the result from the shift from tangible (CD) to intangible (ownership free) music that is rented through user subscription. A key word that makes all the difference in terms of the business model, but this key phrase; “ownership-free” is the cornerstone of the economic discrepancies that lurk within the industry.

Los Angeles Times Nathan Olivarez-Giles reports:

Although nobody officially tracks the number of recording studios, the consensus among industry experts is that the big commercial facilities have taken a major hit. They estimate that as many as half of the L.A. area’s commercial studios have closed or been sold to artists for private use.

The International Federation of the Phonographic Industry (IFPI) is an organization that represents the recording industry worldwide. Currently the IFPI has approximately 1400 members in 66 countries. The mission of the IFPI is as follows:

To promote the value of recorded music, safeguard the rights of record producers and expand the commercial uses of recorded music and its services to members including; legal policy advice (lobbying), anti-piracy enforcement, litigation and regulatory affairs, market research and communications support.

The IFPI issues various reports every year reporting various statistics that pertain to record sales, listening behavior, music downloading and various other trends concerning commercially recorded music. Data is represented in various charts and studies alluding to the present economic state of the global music market. A relevant IFPI generated report depicts a data graph that measures recorded music shipments in correlation to musician employment from the dates between 1999-2009; the findings support the theory of a possible contraction in the music market, other compelling data shows that the global value of recorded music is down -31% (IFPI, 2011).

Unfortunately, there doesn’t seem to be any hard data available that concretely illustrates the number of home recordists; this is due in part for reasons of classification. One can’t discredit the avid pro who is prevalent in the music scene and who quite often is involved with independent projects on top of being up to date with the latest and greatest plugins available. Similarly, one can’t discredit the novice who by mere happenstance is inspired to create an audio recording through a user friendly interface such as Garageband. Recordists, pro and novice could realistically be working with the same quality standard and thus a distinction of quality wouldn’t separate them and so categorization of the two is nearly impossible and thus trying to decipher how many people record at home would be like trying to figure out how many people draw pictures.

The technology has successfully integrated itself into mass technological consumption, turning the question into “how many people do not have audio recording capabilities in their home?” Now, anyone can always make inferences based on supporting data. Soundcloud is touted as being the leading archiving service for independent music makers. Based on their user base, there are 40 million independent music makers globally. This number is a stark contrast in comparison to its commercial counterpart of roughly about 35,000. These figures illustrate a huge propensity for those taking advantage of home recording. Aside from the lob-sided numbers pertaining to the independents and the commercial music maker, independents generated an exorbitant amount of musical content within the last several years.

According to Cd Baby, independent music makers released a total of 61,339 albums and 29,477 singles in 2011 alone. What does this mean in a declining music market? The long tail as an explanation serves well. Despite the mass amount of listening options that have become available one can only deduce that the masses will always want to belong to a mass. It’s fair to assume based on history, popularity among the most popular will still inevitably drive the market no matter how many options are available. An enlarged pool of music makers can only further individualize the one discovering the music and hence making it increasingly difficult for an independent music maker to gain critical mass in an ever-growing sea of independent music makers. So, if the exclusivity of recording music has now been successfully democratized, then other platforms that can’t be assimilated will start to grow.

With digital audio recording content being devolved from a paid model to a rented model to an inherently free model than one can only assume that the “audio recording” has now merely become the “print” of the singular painting. However independent music makers have power in numbers and have made strides to rekindle the value of tangible music in the form of vinyl. The Washington Post reported that vinyl record sales sored up to 52% from 2011 to 2012. The vinyl medium has made its most prominent resurgence since 1997 totaling up to $ 171 million by years end in 2012.

Independent labels and musicians have made a concerted effort to embrace the mediums tangibility and foster an independent music culture that embraces and utilizes the medium as a source for collection as well as music creation. The revival of the vinyl medium also asserts the point that independent labels and musicians are pinned on maintaining the value of recorded media, even if it carries playback artifacts. The intangibility of the digital domain boasts a wonderful freedom in terms of creation but on the flip side carries a transparent, unmanageable amoeba effect that can devalue the content.

In the end, it is a balance; choices for proper and protected music distribution are available and should be utilized and promoted towards independent music makers. ITunes is ahead of the game covering a little more than 77% of all digital distribution revenue. The Apple music platform allows for free sample listening but manages to keep a strong hold on piracy. However iTunes makes it challenging for the novice music maker to market their content and reap the protective rewards. ITunes demands certain requirements be met in order for artists to distribute musical content, as shown here:

Content Requirements:

At least 20 albums in your catalog

UPCs/EANs/JANs for all products you intend to distribute

ISRCs for all tracks you intend to distribute

Financial Requirements:

A U.S. Tax ID

A valid iTunes Store account, with a credit card on file

Apple does not pay partners until they meet payment requirements and earning thresholds in each territory. You should consider this before applying to work directly with Apple as you may receive payments faster by working with an Apple-approved aggregator.

It’s fair to assume that a large majority of indie music makers as well as commercial music makers do not boast a 20 album catalog. So why is the requirement enforced? Why are top selling artists who are shy of the 20 album mark being promoted on the iTunes platform? The answer is again because of record label plight and selling power. So why does Apple even have the requirement to begin with if it then becomes irrelevant based on popularity? I believe the answer is that payment will be due either way, whether you’re a famous artist whose label handles distribution or whether you’re an independent who is willing to pay for a middle man like Cd Baby who can get you in the door to the iTunes platform. Either way money needs to be paid in order to formalize content.

What is important today is that the independent music maker can be just that, independent. Record labels still have a very prevalent function in mainstream music on a mass scale but their services can now be outsourced by the independent, which is a huge triumph for freedom of expression in its own right. What is the independent digital music distribution market like? Cd baby has reportedly paid out close to $ 300 million since its inception in 1998 to artists who have used the platform as an aggregator. Also to reiterate, according to the National Association of Music Merchandizers, computer recording software sales jumped 300% from 1998 to 2007. This figure illustrates a parallel effect between the usability of home recording and the ever-growing revenue that has been generated as a result of that usability.

Though the democratization of the recording studio has established its footprint, it seems as though that a distinction between commercial music and independently generated music will always exist. Though the line between the two has gotten thinner, the spotlight will always shine predominantly on the leader just as the long tail continues to get longer and longer, while offering more opportunities for autonomy. There will still always be the mainstream aggregators who confidently reside at the beginning of the long tail.

I believe this is in part due to the community’s want or need to evangelize around a shared experience. It’s not to say that other content isn’t just as good but to say that the mainstream content was more accessible, in turn more apt to being the topic of conversation or in this case the topic of relation. What is miraculous is the freedom that has been attained in the realm of home music production and the $ 450 million dollar consumer market that has ensued as a result. The reality that one can create a professional body of work and single handedly and conveniently market, distribute and sell that work is the real milestone for the independent music maker and this is so because of access to axillary distribution channels. I would say that the future looks bright for the creative independent. The computer as well as the internet has congealed a mass multitude of professional and novice producers all with many common goals but one common more than most; the desire to be heard.

Patrick Goncalves is a recognized, entrepreneurial, artistically driven, interdisciplinary communications specialist. He provides commentary on the adaptive response in business and culture as a result of the digital age.

A Visit To Windmill Lane In Dublin
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Windmill Lane is covered in graffiti from fans who have paid pilgrimage from all over the world, many attracted by the studio’s historical connection with U2. Initially the graffiti was interesting but is now a terrible mess and the quality of the art is not as good as it was.

Windmill Lane Studios, also known as the "U2 studio", is a three-storey music recording studio located in Dublin, Ireland. It is located on Windmill Lane, a small street just south of City Quay and the River Liffey and a little north of Pearse Station. It was opened in 1978 by Brian Masterson who is a company director and head engineer. It was originally used to record traditional Irish music until U2 came along and began to record there. Prior to this, Irish rock bands such as Thin Lizzy or The Boomtown Rats carried out their recordings outside Ireland.

It is now boarded up, with the actual studios having moved elsewhere. Nevertheless, the studios are still a popular cult symbol and are regularly visited by tourists, particularly those originally from the United States.

Pulse Recording College recently took ownership of the studios. The college has previously sent students to work at Windmill Lane straight after graduation and these students have collaborated with 50 Cent, Bryan Adams, Moya Brennan, Donovan, Jon Bon Jovi and New Order.

The studio is no longer located on Windmill Lane, although it retains the name. Windmill Lane Studios has not been located on Windmill Lane for quite some time and the current facility was originally Ringsend Studios in Ringsend, Dublin 4. Plans to construct a six-storey office block on the old site led to criticism from local resident groups in early September 2008.

The studio remained empty from 2006 onwards, although reports circulated which linked Van Morrison with purchasing the studio for his own personal use that August. Morrison had previously recorded several albums there, including Back on Top, Magic Time and Pay the Devil. In January 2008, the studio was used to record "The Ballad of Ronnie Drew". In 2009, Pulse College took over Windmill Lane painstakingly renovating the studios which are internationally perceived as being at the heart of the Irish recording industry. The renowned multimedia college has now transformed the facilities with state-of-the-art equipment which encompasses not only 3 fully equipped recording studios, but also a creative hub for Digital Media Training in areas of Music Production, Film Production and Game Analysis and Design.

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