Jim Rogers’ PhD-thesis at Dublin City University was recently published under the title “The Death & Life of the Music Industry in the Digital Age” at Bloomsbury/London. He interviewed 30 music business professionals in the UK and Ireland from 2007 to 2010 to answer the main research question if the Internet caused a crisis in the music industry that is signalling its final collapse or if it, in contrast, resulted in an intensive restructuring and reordering within the industry.
He concludes that the music industry has not undergone a fundamental structural upheaval but was reshaped by an evolutionary change. Rogers observes more continuities than discontinuities in the music industry and states that most of the music industry actors do more or less the same things but in a different way. In the following I highlight how the author comes to such a conclusion.
Book review of “The Death & Life of the Music Industry in the Digital Age” by Jim Rogers
Roger’s concept of the music industry includes not only the record industry, but also music publishing and live-music sector. “As a whole, it has proved itself to resilient and innovative in responding to the challenges of digitization” (Loc. 99). If the music industry was hit by a “crisis”, it was limited to record industry. In this broader sense the music industry has been reshaped, but is far from a collapse as augurs have predicted.
After an introduction (chapter 1: “Digital deliria and transformative hype”) about the general impact of digitization on the music industry, the author analyses in chapter 2 (“Death by digital”) the problems based on in-depth interviews with 30 music business professionals in the UK and Ireland. The general consensus of all interviewees is that P2P file-sharing caused the massive decline in record sales in the past decade (Loc. 605). Rogers, however, does not only highlight those file-sharing studies that support the view of the respondents, but also those studies that come to different and even contradictory conclusion (Loc. 645-709), as I also pointed out in the article series “How Bad Is Music File Sharing?” (part 1-25) in my music business research blog. Unfortunately Rogers neither evaluates the studies nor comments on their results. Thus, he leaves the question if file sharing has a negative impact on record sales still open.
The respondents also highlight additional reasons for the recession in the recorded music industry: the proliferation of CD-burning technologies, the market introduction of portable storage devices (aka MP3 players) (Loc. 840-910), the shift from albums to digital single formats (I assess unbundling as the main reason for “The Recession in the Music Industry”) (Loc. 914-943), ignoring the emergence of the Internet as medium for music distribution by key players of the music industry (Loc. 977) and the CD price dumping of supermarket chains such as Walmart and Tesco that devalued music and ruined specialized music retailers (Loc 1078-1175).
In chapter 3 (“Response strategies of the music industry”), the author highlights how the actors of the music industry strategically responded to the challenges:
- The pursuit of file-sharing and file-hosting platform providers, of individual file-sharers and in a final step of Internet service providers through the courts.
- Licensing of online and mobile digital music providers.
- Licensing of synchronisation rights to games producers, film and TV production firms and advertising companies.
- Market development in the BRIC-countries (Brasil, Russion, India and China).
Rogers sums up the new strategies as follows: “The ongoing formation of alliances and agreements between the music industry and the technology sector indicates that music companies are creating business models and licensing systems that enable them to profit from the abundance of emerging and established digital outlets and services. Overall the range of revenue streams open to artists and music companies has increased significantly with the proliferation of internet and mobile platforms” (Loc. 1665)
The relevance of these new revenue sources as well as the boom of the live-music sector are highlighted by Rogers in chapter 4 (“Developments beyond the digital realm”). The major record and publishing music companies benefit from their vast music catalogues by licensing them to digital music platforms and other commercial users of music. The labels and music publishers, however, also want to participate in the booming live music market, which has become increasingly concentrated since the 1990s (see the formation of highly integrated entertainment conglomerates such as LiveNation, AEG and CTS Eventim). The emergence of 360-degree artist contracts is a good indicator for a process of convergence of the live-music sector, the record industry and the music publishers. Since music publishing and live music have grown since the late 1990s, it is clear to Rogers that “(…) the broader music industries landscape paints a significantly healthier picture than the digitally induced Armageddon suggested by record sales data and popular media reports” (Loc. 2143).
In chapter 5 and 6 (“New rules for the new music economy? – part 1 and part 2″), Rogers tries to answer the main research question if the prophecies on disintermediation and the deliberation of the artists from the constraints of the music business have become a reality in the age of digitization.
Rogers admits that artists have been empowered by digital technologies to take the production, distribution and marketing of their creative works in their own hands, but only to a specific degree and in market niches. If an artist pursues international success in the music mainstream, she/he is still dependent on the networks of the music majors.
In addition the majors continue to control the access to the recorded music market. For independent record labels it is still difficult to enter the market, since entrance is largely mediated through the major companies. Furthermore the distinction between indie and major companies is becoming more blurred (Loc. 2558). Based on the interviews Rogers also concludes that terrestrial radio is still the main force to promote music to a mass audience despite the emergence of myriads of music blogs and other music promotion platforms on the Internet (Loc. 2929). Thus, the author concludes that disintermediation does not occurred. Instead “(…) the process of breaking an artist on a wider stage remains largely filtered through many of the same channels as in the pre-internet era” (Loc. 2522).
In the last and seventh chapter (“Evolution, not revolution …”) Rogers counters the prevalent belief that the music industry was shaken by a digital revolution. He rejects any technological determinism and advocates for a more differentiated view. The authors could have supported his convictions if he had read my book on the “Creativity and Innovation in the Music Industry”. It is evident that structural breaks within an industry are never caused by technology alone, but in a complex interplay of social, cultural and economic changes. It is, however, misleading to deny a radical break in the music industry if the changes are more complex than technological determinism would suggest. Nevertheless Rogers states: “(…) it would be wrong to assume that the popular music industry has undergone fundamental structural upheaval in the wake of digitization” (Loc. 2954). The following arguments should support his assumption:
- Radical innovations that occurred have been met by a diverse set of matching innovations (Loc. 2954)
- The crisis as an indicator for a structural break hits only the recorded music industry. The live-music sector as well as the music publishing have benefited from digitization process. In general, a “crisis” cannot be identified for the music industry as a whole – “(…) the overall performance of the music industry has been strong” (Loc. 2954)
- The music majors still dictate the rules in the recorded music industry and independent labels are more dependent on them than ever before (Loc. 3086).
- The concentration of power across all sub-sectors of the music industry (recorded music, live-music, publishing) is higher than ever. Digitization, in addition, caused a convergence of these sub-sectors to commercial entities controlled by a handful of transnational entertainment conglomerates (Loc. 3007-3008).
- The digital music market has grown disproportionally in the past few years which results in remarkable high additional revenues especially for the majors due to their vast music catalogues (Loc. 2974).
Despite undeniable discontinuities and a prospering DIY-culture among artists, the continuities are more relevant than expected. Artists still have to cooperate with the majors to gain international success and terrestrial radio is still the main promotion instrument for new music. The proliferation of 360-degree artist contracts indicate a higher degree of dependence of artists on the structures of major music companies (Loc. 3047 and 3188).
Since continuities play a more important role in the current state of the music industry than discontinuities, the change cannot be characterised as revolutionary rather than evolutionary. In this respect I have to disagree with the author. The music industry, however it is defined, has been changed dramatically since the late 1990s. Its value-added network was totally reshaped in the past decade and new players from outside the traditional music industry entered the market – e.g. Apple, Amazon, Google and others. The music consumption behaviour has also been changed fundamentally and it is the driver of the ongoing process of radical change.
Since Rogers fails to provide a theoretical concept of revolution and evolution, his analysis is based on mere claims. He could have referred to concepts such as disruptive technologies, technological and cultural paradigm shift and mediamorphosis in order to rebut them, but he failed to do that. Instead he used phrases such as “paradigm” (Loc 3052: “evolution of a new industrial paradigm”) and “disruptive” (Loc. 1228) without any substance and without referring to the underlying concepts. Although he uses a revolutionary rhetoric the author contradicts it with his claim of an evolutionary change of the music industry.
All arguments Rogers puts forward against the revolution hypothesis are flawed. Each structural change is of course accompanied by matching innovations and continuities. The emergence of records in the late 19th century has not made music publishing obsolete and records did not vanish in the age of broadcasting (from the 1920s-40s). Inestead music publishing as well as music recording were subordinated to the prevailing cultural paradigm in the music industry. Broadcasting revolutionized the music industry in the 1920s as the digitization did in the early 2000s. And the fact that music majors are still alive is no contradiction to the concept of radical/revolutionary change. The current major companies, however, have less in common with the conglomerates that dominate the music business 20 years ago. Warner Music Group for example has spun off its pressing plants and record studios as well as its A&R and distribution networks. What remains it a large sound recording catalogue which is intensively monetized by licensing it to commercial music users. The blurring distinction between majors and indies as well as the convergence of the live-music sector and the recording and publishing industries are indicators of a radical rather than an incremental change.
The record has been in the centre of the value-added network of the music industry for decades. In the digital revolution it loses its relevance as Rogers highlights too. Instead of a physical product the access to music as a service is now the core of a new business model. Artists, who were seen as mere input factors in the past, have become central for the new value-added process. In this respect, artists have now an influence on the music industry’s rules. Especially superstars have the power to enforce their interests against major record labels, think e.g. of Madonna, Radiohead and all the successful HipHop and EDM-stars. Newcomers und DIY-artists are also well advised not to sign 360-degree contracts, since they have the potential to market themselves until they are powerful enough to contract with majors for an international release.
Rogers misjudges the current development in the music industry as evolutionary. Maybe his methodical approach – to interview exclusively music professionals – has let to such a biased conclusion. It would have been better to include also the view of experts from the technology, Internet and telecommunication sectors as well as academics researching the music industry. Presumably, the result would have been different.
I have to conclude that Rogers book have severe theoretical and methodical flaws, which mislead the author to observe an evolutionary than rather a radical change in the music industry in the course of the digitization. Nevertheless the book is worth reading, since we learn a lot about the estimations and sensitivities of the interviewed music industry professionals. Rogers’ book has its strengths in those parts where the developments in the music industry are described, but it is weak in interpreting these developments since it lacks a solid theoretical framework as well as a profound empirical foundation.
Jim Rogers, 2013, The Death & Life of the Music Industry in the Digital Age, London etc.: Bloomsbury, ISBN: 9781623560010, US$ 29,95.