ERC Research Papers

Creative Destruction in the Music Industry

Published December 2006
By Andrew Ian Dodge, Foreword by Jo-Anne Nadler
ISBN 9780903499255

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.

Key Points:

 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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