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How the Internet Changed The Music Business

The Internet is arguably the most important invention of its kind since the telephone. It has allowed for commerce and communication on unprecedented level. One particular business that has been significantly changed by the Internet has been the music business. When the Internet was first proliferated, some were quick to note how effective it would be in the hands of a savvy entrepreneur in this highly specialized field. Bands like Phish, The Beatles, and Blues Traveler were amongst the first to have a Usenet newsgroups to help fans engage with the band and other fans alike. As time went along, websites like Napster were sharing large amounts of music online without the necessary licenses. Their website allowed for the creation of entire communities where it was possible to trade music and interact with other users. Like Usenet groups, Napster was one of the first forms of social media in the music business. However, it wasn’t too long before the major record labels took decisive action against companies like Napster and forced away from its “license-free” music model. The lesson here for the layperson, music publishers like to get paid!

Even though the legal actions the major record labels took to insure the licensing and publishing agreements they had with their artists were sufficient to deter would be imitators of Napster, there were others who saw a different business model that could work. Steve Jobs, The CEO of Apple came up with the idea that a E-Commerce platform for music could be used successfully while ensuring fair business practices among the major labels and artists alike. iTunes was launched in 2003. People were now able to purchase music one song at a time It quickly became the most proliferated e-commerce platform for music in the world. To complement the software, the iPod was introduced. This device enabled a user to store thousands of songs on one single device. iTunes, in turn, spawned imitators like Zune and Rhapsody. These services offered subscription services whereby, instead of being able to buy single songs or entire records, a consumer could buy a subscription to the service and in return, have unlimited access to music. This development has prompted record labels to enact what are called 360 deals. These deals allow them to take a percentage of an artists’ earnings where it was previously unheard of. These include things like merchandise and ticket sales. These deals were enacted to recoup losses the record labels faced in lieu of competition from e-commerce platforms like iTunes, Zune, and Rahpsody.

The latest innovation in the music business is something most people have never heard of. In the past four years, brand participation in the music industry has become the norm for up and coming artists. The company leading the way is called Music Dealers, LLC, based out of Chicago, Illinois. Their company specializes in connecting corporate brands to independent music artists and thereby increasing exposure for their brand via social media outlets, particularly YouTube, Facebook, and Twitter. This has eliminated the need for the classic way people think famous music artists are discovered. The romantic image of being found by a talent scout in some dingy bar on The Upper West Side of Manhattan is being replaced with a new business model. Corporate brands are giving money to promising artists that they believe have a chance of increasing exposure for their brand by giving those artists money to go on tour and record records. Music Dealers has a powerful website, built with Drupal, that allows for clients to search for music to fit their marketing and advertising campaigns. For example if a client wishes to have a rock song, they can search for a rock song through the website. If they come back with 10,000 songs, they can narrow their search with specific parameters like ” a rock song about love” and “with a female singer”. If the search query came back with a 1,000 songs they could narrow the amount of songs even further by inserting ” with “country influences” or “a woman named Jane.” This incredible search engine allows for brands and advertising agencies alike unlimited searching power for pre-cleared, non-licensed music to be used in their marketing campaigns. This saves them money and gives many undiscovered music artists an actual chance to break into stardom, or at the very least, earn a living. While this hasn’t eliminated the need for music publishers and record labels, it is democratizing the music industry to an extent never seen before. Music Dealers handled all of their parent company Coca-Cola’s music needs for the summer Olympics in London this year and will be handling all of Coca-Cola’s music needs for the Olympic Games in Rio for the 2016 Olympics. Music Dealers e-commerce platform integrates with their e-marketing platform and e-business platform so seamlessly that brands ranging from Bacardi, McDonalds, and Chevrolet have used their website to find independent music for their marketing campaigns both on television and on social media websites like YouTube. The company also uses Facebook and Twitter to engage both with clients and their artist community alike by posting about how one of their artist’s song was used in a BP commercial. This in turn increases their exposure via social media channels and by increasing enthusiasm for the company’s services and the brand they represent. In their posts they link the song’s use in a video advertisement used by BP.