The Impact Of The Digital Threat Upon Global Consumption Of Music

By Author: Robert Sherry
Total Articles: 29
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Introduction
With the introduction of high-speed internet connections in the homes, the music industry is currently going through one of its major challenges. Today record companies make claims that increasing internet music piracy could lead to the collapse of the industry. In contra to the traditional file formats, the digital music files which are found on the file sharing networks are able to be separated from their physical support and then compressed and later exchanged on the net in a comparatively little amount of time, which is substantially faster than time spend renting out a CD in a music library, in line of this threat recording companies are suing internet users who are sharing copyrighted files on the internet anonymously and freely without the authority of copyright owners. In addition technology companies are also developing software to protect these music files which are referred to as Digital Rights Management (DRM). Thus we are currently witnessing a paradox, as on one side latest information technologies and communication have increased the value and amount of information products for consumers who ...
... currently are able to download music anywhere anytime. On the other side, fresh rights management technology that can limit or even lock out the using of digital music which is licensed to consumers. (Scott, 2000)
The aim of this study is to try and understand the threat caused by the digitalization of music in economical and cultural aspects and the contribution of globalization in the issue. The study will try to incorporate different theories, both cultural and economical.

Traditional way of selling music
The music industry is estimated to be worth 35 billion US dollars in the whole world, with an estimated 13 billion US dollars in both North America and Europe, this is according to IFPI (2004). Music plays a significant Role in lives of many people; they frequently spend quite a lot of hours per day listening to recorded music. A variation in the manner music is listened to, is most likely to have an affect on many people. (Vogel, 2004)

The Challenge; Digital Music
Music sales over time
To comprehend the changes that have occurred in music industry over the last 5 years, it is better to first examine global sales of recorded music in diverse formats between the year1991 and 2003. The combined market was comparatively even from 1991 to1999 (increase in CDs compensating reduction in other recording formats) however the industry has witnessed a sharp reduction starting from the year, 2000 (Figure 1), in terms of units and also dollar amounts. This era corresponds with the conception of Napster in the second part of the1999 and also new sharing of files technologies in the second part of 2001. Thus, it is certainly tempting for one to attribute the CD sales decline to the accessibility of free music files found on the internet. Apparently, recorded music sales showed stabilization through the second part of 2003, after a decrease of as up to 12% and sales started to show an increase in the last quarter off 2003 to attain an annual fall of 6%. The creation of new file formats for example DVD audio VCD and Super Audio CD is evidently assisting the industry.

1. Globalization and music
Globalization is defined as international integration; it could be described further as a process through which the citizens of the world are integrated into one society. This process combines economic, socio-cultural, technological, and political aspects. Weestein (1998) states that globalization is the modern form of business in this 21st century. Globalization involves the interaction of people from different cultures, societies, and diverse background. The present globalization effects such as free trade and fast flow of information has presented different challenges to the music industry, apart from increasing the flow of music across countries it has technology has made it possible more people to be able to access music in different formats.

Different theories try to expound globalization; World system theory is among the theories that try explaining what globalization is. According to this theory, globalization is a process which has been completed in the 21st century, through the process the capitalist world system has been able to spread across the whole world this concept views globalization as an old phenomenon that has been going on over the years. (Weestein, 1998) Weestein further obverses that modern world system originated in Europe in 1500 and has evolving gradually to present form. (Weestein, 1998) Consequently, this has impacted the way people are consuming music. With the world becoming a village, and digital technology making it easy for people to access music, a lot of music have been able to reach far places than would have been possible in earlier times. Music thus has played a big role in enhancing globalization, just has globalization has played a big role in globalizing music. (Weestein, 1998)
Culture is said to be a system of values and norms that are shared among a group of people and that when combined together it comprises a design for living that is culture is the way of life. According to globalization World culture theory; globalization is a compression of the world coupled by intensifying of thinking the world as one. Robertson, 1992, explains this concept as thinking of the world as one in actions and thoughts. This makes the world to be as one single place. How to live in the world and how to organize it becomes a universal question. (Robertson, 1992) Music culture especially, dressing of hip hop and rock stars have been copied all over the world creating a universal dressing culture for many young people, thus music has a unifying aspect.
As Paul (2000) observers that digital technologies have become a major attraction for an improved social life and also in the communication and technology arena. Digital technologies have also become one of the most sorts after technology of music among the world population and any other sector in the world today.

Economic
It is, nevertheless, extremely complicated to quantify the incremental advantages and costs of technological advancements and the amendments to copyright law which follow from them in the non-existence of econometric study of demand and supply which would ascertain long-standing trends and also the degree of complementarities or substitutability involving, for instance, music downloads and music sales. These studies have not until now been carried out, until they are done, sketchy evidence and incomplete surveys will have to be applied instead. (Paul, 2000)

Potential causes of current decline in CD sales
A number of explanations regarding the decline in music sales have been suggested, amongst them: the negative economical environment, substitutes between music file formats, substitutes with other varieties of entertainment and certainly internet piracy. (Paul, 2000)
The question of how digitalizing music in the period of convergence thus should draw our attention. What is this convergence we are discussing about? We are discussing about the convergence of audio and video and digital music files that has been brought about by the fundamental unifying strength of digital technology. The world to this point in relation to lawful framework has recognized its impact, and treaties have been signed has as far as the repercussion of music convergence in the area of globalization is concerned, we already have music from one part of the globe playing in another part and this has greatly assist in convergence and globalization. (Paul, 2000)
In the period of convergence, accomplishment in ensuring that countries will be able to take complete benefits of convergence through appreciating the fact that four forces drive convergence and the first one is technology. It is through the unifying influence of digital technologies and constant breakthroughs that are happening, which make convergence such a thrilling concept and actuality in the era of information technology. Technology is very unpredictable and thus we find that through the current digital technology it has been able to unify a lot of people through sharing of music. (Paul, 2000)

Intellectual property
Music industry was among the very first of the artistic industries to start mass production through the use of new technologies the music industry has been persistent to be in the frontline of technological advancement. Successive new technologies (some of which are innovations originating from the music industry itself) establishes the way music is being formed, produced and distributed to music consumers and they strongly affect the economical organization of the music industry. subsequent to literary publishing, the music industry was amongst the first cultural industries to be given protection through the copyright law: by the 19th century music composers were given protection by authors' rights in the Berne Convention, in the beginning of the 20th century, music composers and publishers were awarded mechanical rights in the supposed mechanical reproduction of music, through sound recording. (Paul, 2000
The economic justification of intellectual property protection is to provide motivations for artistic activities that entail huge sunk costs. With the customary circulation technology, the expenses of creation included costs of music recording, marketing and also promotion. Because this business is risky, it appears professional to share proceeds of intellectual property among artists and the distribution companies. (Paul, 2000

In information society and copyright laws
It is apparent that the digital technologies being witnessed today have brought about an increase in information flow enabling more people to access information. Some of the important aspects of technology are:
Digital technologies facilitate a lot of individual to become creators
Digital technologies narrows the gap between the producer and the consumer
It has changed the market place and the value chains
Gives rise to diversity of rights, right holders, users and uses
New uses of digital technology raise the question of balance, duration and also scope of copyright protection laws and public domain. (Paul, 2000)
Digital technology has made it possible for people to be able to download music freely from the internet, this is creating a social aspect as seen by many online social networks companies which currently allows their members to share and download music files. This aspect seems to be line which the Marx idea of social aspect, in a brief popularization of Marx ideas, Marx stressed that social progress springs from the inbuilt contradictions in material life and the social superstructure. On contra this aspect is undermining the capitalism concepts of market forces through the creation of social aspect.
Does digital technology have a liberating potential
Jurgen Habermas's model of the public sphere lays down the stipulations for this argument: Access to the public sphere is open in principle to all citizens. A fraction of the public sphere is made up in each conversation in where private individuals come together to create a public. These individuals are then neither business nor professional people carrying out their private dealings nor are they legal consociates who are subject to the lawful regulations of a country bureaucracy and compelled to conformity. Habermas argued that, the public sphere is the place where reflections on important civic concerns take place and the public compromise takes form. Habermas faulted the increase of contemporary mass media for privatizing civil life and spinning the public into consumers. (Habermas, 2000)
Music has been known to play important role in liberating people, in different countries, as Habermas points out if music can create a public sphere public reflections and compromise can be reached. In this era of digital music which has greatly reduced the digital divide, and globalization which has also reduced economic and cultural barriers which were limiting public sphere, it is clear that music can thus play an important role in liberalization of communities and nations in the world. (Habermas, 2000)
Lerner, and Tirole (2005) recognized that since music consumption in the cultural industry is a composite occurrence, entrenched in an ever growing socio-cultural consumer environment, a big amount of variables are required to be taken into mind to explain diverse behaviours. A remarkable conclusion they made was that diverse kinds of marketing promotion and strategies should to be considered by record companies, on the basis of the sort of downloader portrayed. Their analysis shows that a higher understanding of the consumer profiles is a major requirement in supporting successful strategies of internet music downloading. Without comprehending these profiles, music industry will not be able to exploit the advantages of possible segmentation of consumer markets and appreciating personal consumer tastes, thus, forcing the recording labels to carry on competing with their usual musical offerings in the increasingly less-gainful market. (Lerner and Tirole, 2005)
With this issue of digital music being downloaded and the modernity scholars arguing that this trend is here to stay and it is part of the unifying and globalization that is going on, the industry players are accepting this fact and are now formulating ways of making the concept be economical to producer and the artists. (Lerner and Tirole, 2005)
The established players have shaped the increasing market instead of instinctively trying to opposing it. This has called for a strategic change in two main areas: giving license of artists and their songs to competitor services and also the unwilling discarding of a "rental only" rule for downloads. Recording companies are at present more free to license even their greatest popular songs to rival distribution outlets and are beginning to follow a broad diversity of partnerships in distributing their music in a digital form. In the past the major players seemed so concerned in stopping other companies from making use of the Internet with their music, whether wanted legally or when pirated. Currently they appear freer to work in a co-operative manner with one another, the highly successful case being the Apple's iTunes service, which allows the consumers to purchase individual songs from any of the major companies. (Lerner and Tirole, 2005)

Consequently, the artists themselves are coming up with their own records as the technology has made it easy to be able to record music without going to the companies. However, this is a small percentage, though it may rise in future depending on the market trends and technological innovations. With an ever changing market segmentation being witnessed in the industry it is apparent that digital technology will continue changing the way music is being recorded and produced. (Lerner and Tirole, 2005)

Conclusion
Digital technology has made it possible for people to be able to download music freely from the internet. Today record companies make claims that increasing internet music piracy could lead to the collapse of the industry. In contra to the traditional file formats, the digital music files which are found on the file sharing networks are able to be downloaded easily. However, music has continued to play important role in globalization through the creation of music culture which has continued to integrate people around the world. The industry players have realized that they can not control piracy and have thus began to offer licenses and rights to competitors in order to allow these companies offer their music to people who through the internet. Nonetheless, digital technology has created many opportunities for the industry and the consumers.

Reference:
Golding, P & Murdock, G (2000): Culture, Communications and Political Economy' in Mass Media and Society, (eds) James Curran & Michael Gurevitch, third edition, Arnold
Habermas, J (2000): The Public Sphere, in Media Studies: A Reader, ed. Paul Marris and Sue Thornham (New York: New York University Press),
Lerner, J and Tirole, J (2005): The economics of technology sharing: Open source and beyond," Journal of Economic Perspectives, volume 19, number 2,
Paul A. D (2000): "The digital technology boomerang: New intellectual property rights threaten global ‘open science'," paper presented at the World Bank ABCDE (Europe) Conference (Paris), at http://www-econ.stanford.edu/faculty/workp/swp00016.html, accessed on; 08/2/2008
Robertson, C (1992): Globalization: Social Theory and Global Culture. London: Sage.
Scott, D.B (2000) Introduction to music, culture and society: A Reader, Ed Derek B Scott, Oxford University Press
Weestein, S (1998): Utopistics: or, Historical Choices of the Twenty-First Century. New York: The New Press

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