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Introduction Methodology Aims and Objectives Literature Review Possible Conclusions Gantt Chart List of References Appendices

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In the last decade, sales of recorded music and revenues have declined worldwide, from a high of $14.6 billion in 1999 to $8.5 billion in 2009, according to the Recording Industry Association of America (RIAA 2011) income and sales reports, mainly due to the ever-growing unauthorized file sharing and CD burning options, made available by the latest technology and internet. Downloading of digital recordings via the internet, both authorized and unauthorized, affect the physical sales of the all-important hit recordings, while all major record labels had to lay off employees, downsize and try desperately to adjust their business plan for successfully distributing recordings via the internet, in order to survive in the new digital and content oriented environment. Until no more than a decade ago, the traditional business model in the music industry consisted of selling the CD a very low cost manufactured plastic disc loaded with content, which recorded very high profits when selling a large number of them, after covering a number of costs associated with the production of the actual music, the manufacturing costs of the CD and packaging, the distribution of the product and the marketing and advertising costs. The competitive advantage of a record label, in the past, were the resources, power and contacts in the industry that were fairly hard for any artist trying to produce, promote and sell his own work to obtain. A successful record label had to have each part the previously mentioned operation covered in order to promote and distribute enough CDs to cover the production costs. A vast distribution network, access to top-name producers and recording studios, access to all the press outlets that people consumed, to get reviews and advertising rates that would be used to sell the product and of course, as part of promoting the album, connections to media channels in order to get the music played on the airwaves are few of the capabilities that ensured a record label that the music would be worth investing money into. (Sherman 2008) Today, the classic business model of the music labels is outdated and inefficient, due to the expansion of internet interaction. The advantage over the production and distribution networks that once proved to be a record labels most powerful asset, is now nonexistent, since anyone could share and distribute the same music that consumers would purchase from a CD for free over the internet and produce and master their own music, using a variety of affordable software applications that are easy to use and available to everyone. Music production costs also do not represent a problem anymore for artists today, since the majority of producers can work on their own, using widely available technology, or if they need professional production can find it at a fairly affordable price. Due to the appearance of social networks such as Facebook, MySpace, Imeem, and Last.fm., the radio stations are no longer the only source of new musical material anymore, and also for the first time , the music labels do not have control over what the masses chose to listen to. With the help of social platforms, examples of artist bands like Radiohead and

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NineInchNails, introduced a new business model for selling a new release. Following the precedent, previously unknown bands are currently enjoying successes that in years prior would have been very hard to achieve, all due to being able to produce and distribute their own artwork, on their own terms, without the need for a label. Also, investors can now create and interact with a dedicated group of fans before taking a financial interest in a band or musician, in order to develop a process which involves music and experience and aims at making a sound business investment viable. 'In an effort to maintain sales, they continued to produce acts that were only going to sell to the non-technically savvy segment of the market.' (Gordon 2008) While coverage across music business journals and books argue that economic instability, competition and the diminishing quality of the music itself are also factors contributing to the current distress in the music industry, it is undeniable that file sharing, the most common method of transferring and accessing information in todays world, is the most contributing factor to the music industrys decline, also accompanied by artificially high prices for CDs and also the record companies reticence in embracing new business models, made possible by new technologies, such as file sharing. This is an increasingly relevant topic in the context of new media and new emerging business models that can be used to generate revenue in the industry. The important role that expensive record label campaigns used to play in the success of an artist is now questionable, in this time of free digital means, examples of successful freelance musical production, marketing and sales campaigns having been set in the past decade by artists who have achieved recognition and large number of sales with the help of social networking sites and cloud-based music purchasing platforms.

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Methodology There is a wide covering across business media blogs and music business journals and books, relating to the current state of the music industry, as the end of one digital decade in the music environment is argued across music business literature, some sources, identifying a new trend of cloud-based music services that are to re-shape the face of the digitized music industry in the near future while others describe how the music industry is facing extinction as it refuses to adapt to the new methods of consumer interaction. (Kusek and Leonhard 2008) As internet and wireless digital delivery of music will inevitably continue to grow in both the legal and unauthorized forms, the main critical issue to be discussed in my paper is:

How will the record labels financially survive in this era of free communication and information?

I aim at developing a questionnaire to distribute to the general public, in order to identify consumer trends with respect to listening, purchasing music material and interacting with the artist experience. This will give additional depth to my research the purpose of which will be to Analyze possible solutions for how the recording industry can adapt its business plan to the current digital environment, in order to end its continuing crisis.

I will also consult several music business journals and music business books, which will help me

Outline the effects of the age of file-sharing and digitization on the record labels.

In addition to this, I am interested in studies that examine and promote alternatives to traditional methods of creating, producing, promoting, financing and distributing musical material and explore scenarios in order to:

Uncover existing and future opportunities that the new digital music environment offers for musicians.
Firstly, research will be required into music production, marketing and selling methods used by record labels, which should affirm my understanding of the value chain and business plans used in the music industry. I will gain insight on this specific subject from available literature, including the book 'I Don't Need A Record Deal' by music industry consultant and writer Daylee Deanna Schwartz (2005). This research will provide a comprehensive methodology for developing dependent and independent success within the music business, based on a series of interviews with a number of major label artists who chose to distance themselves from those labels and develop a profitable independent music career.

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Freelance musicians can benefit from a a wide pool of organizations to support their art and business. From musician forums to indie social organizations, artists all over the world can share, network and collaborate in order to produce, market and distribute their work across social media channels and music platforms, involving low cost operations and based on peer-to-peer file sharing. I will also discuss peer-to-peer file sharing issues in context of the new legislation policies regarding monitorization of internet traffic at a personal level, such as the Anti-Counterfeiting Trade Agreement in Europe and Protect IP Act (2012) in the US. These new legislatures will play a major part in the future of information sharing and copy write work and will also affect the music industry in favor of the large record labels.

Literature Review Authors, such as David Kusek and Gert Leonhard, outline new structures and strategies for driving revenues and new approaches to the business of music, in the book The Future of Music: Manifesto for the Digital Music Revolution (Leonhard and Kusek 2005). Online distribution will play a vital role in the way new music releases will be delivered to audiences in the near future, due to the minimized lead time and costs involved. David Kusek (2005) argues that the digital platforms will provide invaluable help to musicians in order to promote and legally distribute their work and also help grow the music business by generating revenue. Whether file sharing hurts the music industry or could indeed help it to grow is ultimately an irrelevant question, because sharing is inevitable (Leonhard and Kusek 2005). As Gordon (2008, p.124) states, the rate of growth of broadband users worldwide is very high, broadband being the fastest adopted technology by the majority of users, even faster than many other technologies including the personal computer, compact disc players and mobile phones. This can only mean further loss for the music business, as higher speed internet connections will only facilitate more person-to-person transfers of music and copy wrote media in general. The recording industry, especially all the major labels that experienced drops in revenues, should, in my opinion, find a way to embrace and profit from the new available technologies, rather than spending resources on lawsuits against end users and internet service providers. The electronics industry also plays a major part in the music sales decline, by their implicit approval for distributing free content. Manufacturers such as Dell, Compaq, Sony, provide end users the ability to acquire free music easily, by selling CD burners in almost every new computer and manufacturing blank optical discs and have been able to avoid liability for allowing people to use the internet to get and make permanent copies of free music. The issue to be addressed here is how and when the labels will secure the cooperation

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of the internet service providers and the electronics industry, to pay them and their artists for all the music material that is being transmitted, downloaded, burned and shared. End users can not be hold responsible for free music, as long as the means and tools for acquiring this music, such as MP3 players and other similar gadgets, that allow everyone to listen to and keep free music, are made available on a wide range by corporations. The Music Business and Recording Industry 3rd ed., by Geoffrey P. Hull, Thomas Hutchinson and Richard Strasser (2011), discusses the new opportunity of artists to promote and distribute their work, due to file sharing across digital platforms. Their research covers the changes in the industry brought about by the digital age, such as changing methods of distributing and accessing music and new approaches in marketing with the Internet and mobile applications. Their writing will provide support to my research, in terms of new developments in copyright law that are examined, along with the global and regional differences in the music business. I will also tackle the viability of file sharing in the promotion and distribution of recorded music and discuss the degree of success in marketing strategies used by independent labels and artists.

Possible Conclusions After detailed research within the above mentioned fields and critical analysis of the new concepts and business plans surrounding the music industry in the new digital age, I expect to demonstrate the fact that the new technologies, which are becoming more and more widely used, are in fact revolutionizing the music business as a whole. Although these changes are forcing traditional business models within the industry to become obsolete and cause loss of revenues by diminishing the sales of physical recorded music to major record labels, these new means and tools are also providing opportunities for unsigned artists, independent labels and music entrepreneurs. 'As new methods of distribution, sales and production are in continuous change, also new sources of revenue are created, and the music industry evolves' (Hull et al. 2011). In conclusion, digitization of the music business does not necessarily mean that in the near future major record labels will not gain enough revenue from record sales, or will not have a role to play in the industry, but rather that they need to adapt to a less centralized music industry, which is more and more accessible to artists, entrepreneurs and consumers and which will provide new means of revenue rather than traditional ones.

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List of References RECORDING INDUSTRY OF AMERICA, 2011. For students doing reports [online] [viewed 23 December 2011] Available from: http://www.riaa.com/faq.php Cary Sherman Interview, 2008 [radio]. National Public Radio Program, 24 June. GORDON, S., 2008. The future of the music business. 2nd ed. New York: Hal Leonard Books KUSEK, D., G. LEONHARD, 2005. The future of music: Manifesto for the digital music revolution. London: Berklee Press HULL, G., H. THOMAS and R. STRASSER, 2011. The music business and recording industry. 3rd ed. New York: Routledge

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