ERC Research Papers
Creative Destruction in the Music Industry
Published December 2006
By Andrew Ian Dodge, Foreword by Jo-Anne Nadler
Britain's music industry is is in crisis; sales of singles and albums are collapsing while digital downloads - often illegal - are exploding. Meanwhile UK artists are failing to exploit the new technologies and sales channels that could give them a competitive edge and the record companies continue to work on a pre-digital redundant business model - one where they have a monopoly of recording, releasing and distributing music.
• British musicians are failing to break into the American market, the most lucrative of them all.
• This is because they are failing to exploit new technology and the recording labels do not understand the diversity of the American market.
• The BBC - unfairly - dominates the airwaves and decides what may and may not be played.
• And the BBC even contributes to the mass manufacture of boy-band/girl-band phenomena instead of allowing for musical diversity.
• American bands manage however to penetrate the UK market with ease.
• The music industry worldwide though is fighting a losing battle with the internet which regards it as a threat rather than a way to engage with their customers.
• Aspiring musicians can now use several services and technologies that bypass record companies and traditional retail outlets completely.
• They can also target new digital sales channels; ringtones, mobiles and taxis.
• The BBC's monopoly of the airwaves must be ended for the public to enjoy a wider choice of music.
• Live music must be resurrected as a vital market research tool to find what customers like.
• Musicians must embrace the new distribution technology like CD Baby.
• Recording labels must specialize - not diversify.
• The cost of recording, releasing and distributing music has never been cheaper.
• Record companies no longer have a monopoly on sound technology or recording studios.
• Their model of over-spending on a few stars is over.
• The future of music is ever increasing choice and diversity.
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