Impact of Online Music Streaming on the Industry
A Claim for Streaming
When speaking economically, the digital music sector of the international music industry is undoubtably the most important sector in the industry. Within the last decade, music has seen cardinal changes in the way both major and independent labels distribute their products. An industry that once relied on Payola 's and mass distribution of physical records and CD 's now relies heavily on the power of the internet. The first instance of mass distribution of music through the internet was by the service Ritmoteca.com in 1998 [1]. Ritmoteca had a library of over 300,000 songs, offering individual songs for 99 cents each and albums for $9.99. After signing distribution deals with many major music labels such as Warner Bros, Sony, and Universal, it was clear that the market for selling music online was opening up. The year following Ritmoteca 's inception, the peer-to-peer file sharing service named Napster opened its virtual doors to listeners across the world at the price of nothing [2]. At its peak, Napster had over 80 million users across the globe [3]. The service 's popularity sparked a great deal of controversy, as the artists whose music was being downloaded for free felt they deserved to be compensated. Naturally, dozens of lawsuits followed, resulting in Napster 's peer-to-peer file sharing system to be shut down. However, Napster was able to make somewhat of a comeback by competing in today 's ever popular music streaming industry, which allows for users to listen to music at a monthly fee or for free, all the while compensating artists. However, artists still feel they are being compensated at too low of a rate. Clearly, there is still friction in the industry between the consumers and producers. So the question remains, what are record executives doing to fix the problem with the products they are putting out? Before diving into this question and finding some resolve, there are two important changes in the industry that must be
When speaking economically, the digital music sector of the international music industry is undoubtably the most important sector in the industry. Within the last decade, music has seen cardinal changes in the way both major and independent labels distribute their products. An industry that once relied on Payola 's and mass distribution of physical records and CD 's now relies heavily on the power of the internet. The first instance of mass distribution of music through the internet was by the service Ritmoteca.com in 1998 [1]. Ritmoteca had a library of over 300,000 songs, offering individual songs for 99 cents each and albums for $9.99. After signing distribution deals with many major music labels such as Warner Bros, Sony, and Universal, it was clear that the market for selling music online was opening up. The year following Ritmoteca 's inception, the peer-to-peer file sharing service named Napster opened its virtual doors to listeners across the world at the price of nothing [2]. At its peak, Napster had over 80 million users across the globe [3]. The service 's popularity sparked a great deal of controversy, as the artists whose music was being downloaded for free felt they deserved to be compensated. Naturally, dozens of lawsuits followed, resulting in Napster 's peer-to-peer file sharing system to be shut down. However, Napster was able to make somewhat of a comeback by competing in today 's ever popular music streaming industry, which allows for users to listen to music at a monthly fee or for free, all the while compensating artists. However, artists still feel they are being compensated at too low of a rate. Clearly, there is still friction in the industry between the consumers and producers. So the question remains, what are record executives doing to fix the problem with the products they are putting out? Before diving into this question and finding some resolve, there are two important changes in the industry that must be