Is there a future? : an analysis of the music industry through its history and its strategy for survival in the age of peer to peer & file sharing technologies

Abstract

The recorded music business is presently at a crossroads: new technologies have forever changed the way business is conducted, revenues are getting smaller every year, the conversion of revenue origin from sales of physical products to digital ones is not happening at a rate anywhere near what would be needed for one format to subsidize the other, the major players are merging at the same rate that their sales decrease and the old adage that claims "in business, one plus one does not always equal two" has proven to be truer than ever in each one of the mergers. What follows aims to introduce readers to the history of the so called "music industry", analyze its growth and expansion throughout the twentieth century, its crisis in the late 1990's as new technologies changed the playing field and its struggle for survival in the new century. The behavior of the corporate powers in the business has been replicated throughout their subsidiaries worldwide in scaled versions, making it possible to "generalize" on the use of certain examples from around the world, and the response of music consumers -the end users- has been extremely massified, almost homogeneous as well. Meaning, examples from different parts of the world normally apply to the business in general.

(cont.) An ample research study of music downloaders based in the Argentinean music market was designed and carried out for the purpose of this paper, and its results are exclusively commented here. It is the author's belief that this study does very well in representing the Latin American region's outlook for the legitimate music business going forward and to a moderately large extent, the global one. In the end, personal conclusions from the author will set a critical point of view from within the music industry, with an emphasis on what principles are applied by me daily in my present position as Managing Director of a major label in the region formed by Argentina, Bolivia, Chile, Paraguay and Uruguay.