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MikeAbendFirstPaper 3 - 27 Oct 2011 - Main.MikeAbend
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< | | | | -- MikeAbend - 18 Oct 2011
“Introduction of new technology is always disruptive to old markets, and particularly to those copyright owners whose works are sold through well-established distribution mechanisms.” | | | In 1964, Marshall McLuhan? published Understanding Media: The Extensions of Man and popularized the quote “the medium is the message”. McLuhan? recognized an ever-present symbiotic relationship between creative content and technology, noting that the medium of delivery to the consumer often defines the content itself. In this vein, the medium of consumption, rather than the content, is most important in developing and studying business models and the legal compensation mechanisms in the media industry. | |
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< | With the invention of the sound recording, music changed from an experience that could only be heard live (or on the radio) to a commodity that could be owned. Consider that in 1910, prior to the creation of sound recordings, 374,000 pianos were manufactured in the US for use in the home—by 1984, the number was 206,000 (pianos were the only way to create music “on demand”). The commoditization of sound recordings provided a limited amount of content to the purchaser, who could then listen to it at his or her convenience. However, since records were relatively expensive, thereby entailing a high marginal cost, consumers selected small amounts of music to own based on personal taste and the successful promotion of each artist. | >
> | With the invention of the sound recording, music changed from an experience that could only be heard live (or on the radio) to a commodity that could be owned. Consider that in 1910, prior to the creation of sound recordings, 374,000 pianos were manufactured in the US for use in the home—by 1984, the number was 206,000 (pianos were the only way to create music “on demand”). The commoditization of sound recordings provided a limited amount of content to the purchaser, who could then listen to it at his or her convenience. Since records were relatively expensive and entailed a high marginal cost for those with limited resources, consumers selected small amounts of music to own based on personal taste and the promotional reach of each artist. | | | The “record” defined the business model of the music industry, which consolidated to form four major multinational profit-maximizing corporate record labels that collectively owned over 80% of sound recording copyrights and accounted for more than 77% of all retail music sales by 1998. These labels also owned ancillary businesses such as the distribution network to reap huge profits. The music industry thrived under this system until the late 1990’s, when technology destroyed institutional control and made established revenue streams obsolete (practically overnight). |
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