How the music industry will change in 2011
In the past decade, the music industry has seen a lot of changes, but it has struggled to keep pace with technology, piracy and consumer demands. Already this year we've started to see a few more changes take shape, from crackdowns on piracy websites, a resurgence of interest in the currently U.K.-only service Spotify and a teaser of a new service from Pirate Bay. We've parsed all the data and looked closely at the numbers and have come up with a few predictions of our own.
When looking forward, the best place to start is probably by looking at how the industry will likely react to piracy this year. Piracy has been an issue plaguing the industry since the invention of the cassette tape, but it wasn't until last year that we started to see the government really take it seriously. Last November, the Senate Judiciary Committee passed the Combating Online Infringement and Counterfeits Act (COICA), the act that made it possible for the Department of Homeland Security's Immigration and Customs Enforcement division to seize around 100 domains last year.
The domain seizures are likely to continue throughout this year, attacking content farms and link distribution sites. Google will also continue to remove a lot of its content from its instantly viewable searches. Those efforts block links to pirate sites while cutting out their AdSense software from the mix, meaning, if nothing else, that piracy sites can't make any money. Google's goal is to lead consumers to legal websites before they go to illegal ones.
Even though the RIAA has lost a considerable amount of money on lawsuits, we're also likely to see a few more scattered throughout the year. These probably won't be the "Grandma gets sued for playing a song in the background of a YouTube video" variety we've seen in the past, but will more likely be geared toward major players in the scene.
They're also likely to start going after "cyberlockers," which, as the name implies, are online, legal storage options for files. These are places like Rapidshare, Mediafire and Hotfile, the places most MP3 blogs point you toward. The problem with these is that since they're billed to be used as an entirely legal means for people to share files, it's hard to track down or attack piracy. That said, all of these sites have been quick to respond to takedown notices from bands and labels. We wouldn't be surprised if record labels started hiring people for the specific purpose of combing through these sites.
Speaking of the major players, pirates will assuredly fight back. Pirates love a challenge, so the more the industry throws at them, the more they'll enjoy crushing it. Case in point: There have been rumors swirling around the Internet of a new website from Pirate Bay dubbed Music Bay.
The name alone should strike fear into the record industry, but considering it's a possible project from one of the premier torrent sites, it should be causing more than just fear; it should be causing the record industry to piss its pants. There are no details at present as to what the site might be or how it might work, but recent breakthroughs in torrent sharing that allow for live streaming of content could possibly be at the root of it all. Basically, you'd be able to stream songs from other peer-to-peer file sharers. No waiting, just a massive catalogue of information at your fingertips at all times.
Piracy will surely continue in some form, regardless of litigation against it. With every new advancement of technology, whether it's DRM or watermarks, pirates have broken it within months, if not days.
Of course, legal, cloud-based streaming is the thing consumers have been begging for. This is an area the music industry has been utterly lax in keeping up with. Ever since Apple ate up Lala last year, we've been without a reasonable streaming service. Enter Spotify, a service that has been immensely popular in the U.K. but hasn't been able to break much ground on this side of the ocean.
Spotify has been trying to come over to the U.S. for a while now, but it has been consistently blocked by the labels. That is, until last week. There have been a variety of reports over the last few years that Spotify was close to sealing a deal with Sony, but last week it was confirmed through a variety of sources. So that's one label down, but we're still three majors and an ad campaign away from a launch. It's a good sign, though: If Spotify and Sony can come to terms, that means there's hope for the rest of the industry.
There is also the fact that Apple has yet to do anything with the patents and technology they gained when they purchased Lala. It wouldn't come as much of a surprise if Apple launched a cloud-based streaming service this year. How that service would take shape, however, is still up in the air, but a highly revamped version of iTunes would be a welcome and necessary change.
Considering that the reason piracy took off in the first place was because people didn't feel the need to pay exorbitant amounts of money for digital content to record labels, the rise of direct sale options might be a possible solution.
There is also a rise in direct-sale, specialized stores popping up. While ten years ago everyone was flocking to services like iTunes and eMusic, several indie labels have decided to start or revamp their own digital stores, offering their content for whatever price they choose. Some heavy-hitters include Southern Lord, Matador and Sub Pop, all of which offer their music for well below the iTunes standard.
This gives consumers a more direct way to fund their favorite bands and labels without a store shaving a little off the top. There are also a lot of specialized stores that do the same thing with specific genres of music, like Insound and Beatport, both of which cater to specific genres and allow users to discover and listen to new music. It's likely that we'll see these continue their expansion, at least on the indie front.
Then again, the most direct way to fund your favorite band is Bandcamp, which has seen a few major artists hop on board, including RJD2, Amanda Palmer and Sufjan Stevens. For musicians, the reasoning is clear: no label, no problem. All of the profits go directly to the band, a process that ends up being mutually beneficial to both the fan and the artist. Bandcamp takes 10-15 percent of the sales, a much smaller fee than most labels or stores.
There is a distinct possibility that the Bandcamp and label-centric stores will catch fire this year, especially when you consider the fact that it ends up being a boon for everyone involved. Almost all of these services offer the ability to listen to an album in its entirety before you purchase, which takes the idea of listening stations at CD stores and turns it into the digital equivalent.
It's a simple solution to a clear problem that labels have been having: Giving the consumer the chance to listen to something in full can make or break a purchase. They'll catch on or iTunes will catch up, one of the two.
Direct-sales options don't really benefit the majors. They've tried and failed to start their own stores in the past. The big players in the industry will likely need to come to grips with the idea that they won't be making as much money as they did in the past and start trying to make deals for streaming services.
If pop music isn't meant to be long lasting, if it just needs to be popular long enough to make a little bit of money, then the logical way to handle that is through streaming. The indies have the most to gain from utilizing technology to their benefit, which is why they're the ones leading the trends right now.
It's no longer the record industry telling consumers what they want; it's the consumers telling the industry what they're willing to pay for.
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