Discuss the impact of media technology on the distribution, marketing and exchange, within a media area you have studiedâ€™ â€˜
In order to successfully answer this question I will make close reference to my two music case studies. I researched the production, distribution, marketing and exchange for Universal Music Group (UMG) which is one of the four Major record labels and Fabric Live, which is an independent label that is owned and run by the popular Fabric nightclub. In the last few years there has been a seismic shift in the way audiences access and enjoy music. Advances in media technology have transformed the industry business models and have brought in new opportunities for the industry to generate revenue; as well as bringing potential threats to their existence. According to the ifpi Digital Music Report 2010 in 2009 more than ¼ of record companies’ revenues came from digital channels. Music fans can acquire tracks and albums in ways inconceivable a few years ago – from download stores, streaming sites, subscription services, free-to-user sites, bundled with their broadband or mobile phone. These new and innovative distribution channels have allowed the audience to enjoy and access music in a myriad of ways which according to the ifpi Digital Music Report 2010 has generated US$4.2 Billion worth of business for the music industry. Technological convergence, Web 2.0 and participatory cultures have been the main drivers of this change. The reminder of this essay will asses and discuss the ways in which Universal Music Group and Fabric Live have embraced change and the impact of this change on the way they distribute, market and exchange their music. Universal Music Group (UMG) along with Warner Music, EMI and Sony Music make up the four Major labels. These four labels are globally known and recognised with a roster of popular artists and musicians and distribution networks than span the globe. Universal Music Group UK (www.umusic.co.uk) has a wide range of artists from a wide range of musical genres – from Lady Gaga to Eminem, Amy Winehouse to Alphabeat, Morrissey to Cheryl Cole, Elbow to White Lies. The roster of artists on their web site is truly impressive and indicates to me that UMG has signed a range of artists that appeal to a broad range of music fans. This is very different to Fabric Live which produces mix CDs from DJs such as The Duke Dumont, LTJ Bukem, Zero T and DJ Yoda. Although the Fabric Live DJs play differing styles or genres of music they can all be classified under the broad term of dance/club music. This early research indicated that the Independent Music labels tend to provide more specialist, niche products for a loyal fan base, whereas the Major labels focused their attentions on globally known bands and artists from high selling genres such as pop, R&B and Hip Hop.
In my opinion UMG has really embraced technological change. The UMG web site is very interactive and fun. The site has a full roster of UMG artists as well as breaking news, competitions, photos and music videos. The web site allows users to become UMusic members so that they can enter competitions and access exclusive privileges through the web site. This is a useful mechanism for UMG to get a breakdown of the age, gender, musical interest and email addresses for the fans of the site. This information is used for the targeted marketing of up-and-coming events such as album releases and tours. Once logged into the site members can find out information on their favourite UMG artists. For instance I went on the site and accessed the Amy Winehouse page of the UMG UK web site. Amy’s page included recent photographs that members are allowed to share on Facebook, Twitter, MySpace and StumbleUpon. The Amy Winehouse page also includes her upand-coming events and embedded add-supported videos from artists signed to UMG. This research indicates to me that UMG have embraced technological change. They are keen to tap into the potential of participatory cultures such as MySpace, Facebook and Twitter to help market and promote their artists. The UMG web site has a ‘Share it on Facebook’ tab which allows users to share UMusic news, competitions and galleries with friends. Universal Music has also partnered Google’s You Tube and Sony Music to launch the VEVO music video site. The site has recently signed a contract with EMI and as such now features music videos from three of the four major record labels. According to the ifpi Digital Music report 2010 this means that VEVO now offers 85% of the music videos available on the market and is looking to sign additional deals with music companies and record labels in the future. Videos on VEVO are add-supported which generates revenue for the site; the videos can also be shared across Facebook and other social networking sites which again illustrate the ways in which UMG is using participatory cultures to help market and promote their artists. The Fabric Live web site has many similarities to the UMG UK site. The site www.fabriclondon.com includes all of the Fabric Live releases in chronological order. Each release has biographical details about the DJ and the site has listening posts where you can hear extracts from the CD. The site offers a Fabric First membership scheme which gives members a discount on Fabric Live mix CDs as well as access to exclusive videos and quick entrance to the club. Fabric First membership costs £6 per month and is a clear indication of the synergy between the record label and the nightclub. Fabric Live CDs and fabric merchandise is available to buy direct from the web site. The site also offers free podcasts from DJs that have played at the club. The podcasts are available to listen on the site or can be accessed free from iTunes. Fabric has
also got a Facebook and Twitter page where people can tweet or IM comments about Fabric. Both companies have in my opinion embraced changes in Distribution and Exchange. For instance UMG has partnered ad-supported services such as Spotify, Deezer, MySpace Music and We7. In the ifpi Digital Music Report 2010 Spotify CEO Daniel Ek stated that Spotify’s primary objective is to "migrate illegal file-sharers to its services, shifting 15-25 year old music fans to a legal model that puts money back into the creation of new music". Spotify’s user base is currently 6Million with 250,000 premium subscribers. Spotify is UMG’s biggest digital provider by volume and its fourth biggest by income (with iTunes being the industry leader). This research has lead me to believe that Major labels like UMG are beginning to appreciate that live streaming web sites can offer revenue streams through ad-supported live streaming and premium services that members pay for monthly and are adfree. The sheer number of ways to access new music nowadays is quite staggering. From traditional high street retailers such as HMV through to Hybrid online retailers like Amazon through to pure digital retailers like play.com and iTunes. Chris Anderson from Wired Magazine has developed a system called the ‘Long Tail’ to illustrate the impact of Web 2.0 on businesses across the media sector. According to Anderson’s Long Tail Internet sites like iTunes and Play.com have an almost limitless capacity to store and distribute music. This has allowed record labels to generate additional revenue from artists without incurring the expensive of a full physical CD release. Live streaming sites such as Last FM and hybrid retailers like Amazon have a recommended artists section to their site which recommends artists similar to the artist typed into the search tab. This function encourages music fans to listen to recommended artists that they may not have heard before. This way the site may encourage an online or physical purchase. Live streaming web sites like Last FM and Spotify have allowed users to listen to music for free, with tracks being available for purchase through the web site. The ad-supported nature of live streaming has enabled some money to be re-invested in the music industry. Research from the ifpi Digital Music Report 2010 indicates that live streaming sites are encouraging 15-25 to move away from P2P however not everybody in the record industry believe that live streaming is a viable business model. Warner have very publicly withdrawn their artists from live streaming web sites with a spoke person for Warner Music stating that sites like Last FM, Spotify and Grooveshark are ‘clearly not positive for the industry’.
To conclude during my research I have found out about the fundamental changes that have occurred within the music industry over the last few years. The way that all media products are distributed, marketed and exchanged has changed radically due to technological convergence and Web 2.0. UMG has been very pro-active and open towards advances in media technology; exploring and embracing multiple music distribution platforms. On a smaller scale Fabric have also embraced Web 2.0 in terms of their marketing, distribution and exchange as their products are available to buy directly from the web site as well as in the high street and online through pure digital retailer like iTunes or live streaming sites. Fabric Live CDs are an interesting example of marketing and exchange as the design of the physical CD is very unique. Each CD comes in a metal presentation case with associated art work and booklet. The success of these CDs indicates to me that music fans still value a well designed physical CD or digipak that is collectable, however it is also clear that with the advent of Web 2.0 the ways in which music is marketed, distributed and exchanged has undergone radical change. Music fans now control how, when and where they access music and it is up to the music industry to embrace this fundamental change.