If there is something that we all love is music. There are different genres, so there is always one that fits your taste, never letting you down. However, this industry has evolved and here I'll try to make a brief history line, in order to analyze this business, and understand how it was and how it has changed into what it is now.
The first device where we could listen to music from was the phonograph (also known as the gramophone or record player) introduced in 1877 by Thomas Edison. This device was used until the 1980's, almost for 103 years. After the phonograph, came the radio, a new way of listening to music. In 1920, the station KDKA is supposed to be the world's first commercially licensed radio station. At first, record sales decreased as people could listen to the music on the radio for free. Despite this, radio started to have the contrary effect. People heard the song on the radio, and if they liked it, they went for the record. So, the radio became, and still is, a channel to promote songs.
In 1931 the magnetic tape was created, but it wasn't until 1964 that the compact cassette was launched into the market. Then approximately 16 years later the Sony Walkman came out. It revolutionized the industry because it introduced the concept of portable music; with it you could take your favorite songs anywhere. Afterwards, in 1992 the Compact Disc (CD) was introduced, followed by the discman by Sony. Then the mini discs entered the market, but this format didn't last for long. Soon, the mp3 format started to spread. In 1999, Napster the peer to peer sharing file internet service, started operating. Users could upload their songs, share them with others and they could also download them for free! Other sites such as this one started to offer the same services. People began to listen to music through a different channel and for free. Obviously the music industry had changed. Since, 2000 when online file sharing took off, global recorded music sales have been dropping from $26.9 billion a year to $15.9 billion according to the IFPI (International Federation of the Phonographic Industry).
After, some legal issues that Napster and other like services suffered because of sharing music files illegally they had to shut down. A new player arrived, and it wasn't form the music arena, Apple in 2001, came up with iTunes, an online music store where you could download songs legally and for only 99 cents. Along the way other online music services also entered the "new" market, such as Pandora or Spotify, which offer internet radio service.
Now, the latest trend for consuming music is "the cloud". Amazon's Cloud Player, Google's Music Beta and the latest Apple's iCloud are the 3 main players in this digital arena. Seems that Apple will win this battle as its service is not only for storing music. It will search devices for tracks purchased from the iTunes store and automatically users may download the music directly to any Apple hardware. This gives Apple a huge advantage compared to Amazon or Google, as the install base of Apple products such as iTunes, iPods and iPads is larger, this battle seems to have a winner.
The online music outfits like Spotify or iTunes bring in much less revenues than records sales, yet they produce more precise real time data. For example, Universal is developing its own data-crunching tool called the Artist Portal. Atltantic Records, owned by Warner Music Group, uses data to enhance its marketing campaigns. Some of these data crunching companies such as Buzzdeck, Artist Portal and Big Champagne they are helpful for record companies to understand better their customers and get the needed data to promote their artists in a more economical and precise way. The music industry is making its profits from live music shows and merchandise and to be successful in these areas they need to know their consumer's behavior, here is when the digital technology comes in handy and not damaging as many have been considered. If today want to listen to new music you just have to look into the clouds!
After, some legal issues that Napster and other like services suffered because of sharing music files illegally they had to shut down. A new player arrived, and it wasn't form the music arena, Apple in 2001, came up with iTunes, an online music store where you could download songs legally and for only 99 cents. Along the way other online music services also entered the "new" market, such as Pandora or Spotify, which offer internet radio service.
Now, the latest trend for consuming music is "the cloud". Amazon's Cloud Player, Google's Music Beta and the latest Apple's iCloud are the 3 main players in this digital arena. Seems that Apple will win this battle as its service is not only for storing music. It will search devices for tracks purchased from the iTunes store and automatically users may download the music directly to any Apple hardware. This gives Apple a huge advantage compared to Amazon or Google, as the install base of Apple products such as iTunes, iPods and iPads is larger, this battle seems to have a winner.
The online music outfits like Spotify or iTunes bring in much less revenues than records sales, yet they produce more precise real time data. For example, Universal is developing its own data-crunching tool called the Artist Portal. Atltantic Records, owned by Warner Music Group, uses data to enhance its marketing campaigns. Some of these data crunching companies such as Buzzdeck, Artist Portal and Big Champagne they are helpful for record companies to understand better their customers and get the needed data to promote their artists in a more economical and precise way. The music industry is making its profits from live music shows and merchandise and to be successful in these areas they need to know their consumer's behavior, here is when the digital technology comes in handy and not damaging as many have been considered. If today want to listen to new music you just have to look into the clouds!
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