Empowered Artists: An analysis of how the rise of peer-to-peer file sharing, viral marketing, and advancement in music production software allow independent artists to replicate value added functions of a major record label for a fraction of traditional cost
Open Access
Author:
Petredis, Christian Sava
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Orie Edwin Barron, Thesis Supervisor James Alan Miles, Thesis Honors Advisor
Keywords:
Record label music industry file sharing independent artists music production
Abstract:
Recent technological advancements in digital audio workstation software, social media platforms, and viral marketing techniques have eliminated much of the up-front capital required for artists to create professional recordings and launch marketing campaigns. These advancements have altered the landscape of the modern recorded music industry, empowering the low budget independent artist, and significantly diminishing the value proposition of major record labels to artists. The rise of peer-to-peer file sharing, a trend that began in 1999 with Napster, has ushered a new era where a large percentage of consumers of recorded music have become accustomed to obtaining recordings for free. Attempts to eliminate or reduce the use of file-sharing platforms by intellectual property holders (major labels) have been largely futile. The combination of file sharing and technological advancements has crippled major record label profits, and will likely breed a new economically viable configuration of record label as major labels continue toward bankruptcy.
Part I of this paper will examine the current economic state of the recorded music industry, beginning with the rise of p2p file sharing in 1999 with Napster.
Part II will look detail the recent invention of the ‘360 deal’, the industry’s attempt to salvage its traditional business model.
Part III will examine the four key areas where current 360 deals at major labels add value to artists: recordings, publishing, merchandising and touring. It will offer theoretical hands-on strategies for an unsigned musician to replicate the value added functions of a major label with very little up front capital, in a way that better serves their own economic and creative interests. This portion will be based on rational proposition.
Part IV will derive a new business model configuration for a record label from the principals discussed in Part III.