Music on the Internet
...o share the music they have with other people through the Internet. How might the driving forces change music industry? · Value chain- now that people are able to download songs off the internet they can get the music they want for much cheaper, because they don't have to pay for the CD's, which you are paying mainly for all the levels of production it has to go through before reaching the shelf. · Direct Internet sales of music by performers- now artists are able to go straight to the public by selling their music over the Internet. Before this, artist had to go through a lot to get noticed. Many talented artist go lost in the shuffle, and weren't able to make it to the top. Now all they have to do is download their music to the Internet and it is available to everyone. · Free file sharing- this is where the ethical issues come in. One person downloads a song from a CD and than sends it to a bunch of friends who send it to more friends…and so on, music is being shared without the artist or music industry making a penny, clearing this breaks the laws of copyright. Question #3 What is the appeal of a business model based on Internet distribution of music? How does a business model based on Internet distribution differ from a tradition business model in the record music industry? Napster: · Napster is nickname of 18-year boy who started it. · Was not meant to be money making business, "Napster" just wanted an easier way to get the music he wanted. · Made some money from advertising. Gnutella: · Not money making · No central server, so no one can get caught, just a whole group of people sharing music they have downloaded on their computer. Amazon.com · Buy CD's online · Have bigger selection of CD than the stores because they have no problem with shelf space. · They have a customized "favorites" for every customer (each person much fill out a questionnaire so they know what they like) · Artist can sign up for free online and market their music, and get a profit, which is mailed to them MP3.com: · Pay for subscription · Download music · Artist can sell CD's and get half the profit · MPS is the second most "searched word" on the Internet. Sony: · Charges to download music $1.73 to $2.60 each song. More for more popular songs. · Working in technology to develop the "SDMI"- Secure Digital Music Initiative, which would get the recording, electronics and computer industries to adapt a unified standard for the delivery of music. Traditional Model: · Many different layers of the value chain to go through…(next question) · After all was said and done, artist would only get, on an average, less than a dollar for each CD that was on the market for $16. Question #4: What does the value chain of the recorded music industry look like? How does the Internet shorten the chain? Is the industry value chain that includes free Internet distribution of music ethically flawed? Value Chain: A&R development à recording à manufacturing à marketing à distribution à retail. A&R development: record co...