The Music Industry and Copyright Issue in The Digital Phase Essay

The Music Industry and Copyright Issue in The Digital Phase - Essay Example Warner Music Group captures 27% of market share, which makes it the 2nd largest in the world. Sony Music Entertainment captures 14% of the world market share after it formed Sony/BMG following a merger with Bertelsmann, which was later dissolved in 2008 with Sony now operating as Sony Corporation’s subsidiary. EMI, which is based in the UK, has a 5% market share and is the smallest of the major record labels. While these four record labels dominate the music industry, there are independent companies that require mention. These companies include Koch, EDC, Zomba, Edel Music, and Bad Boy Entertainment (Morton & Koufteros, 2008: p502). Nature of Problem Over the last decade, the recorded music industry has been shrinking. Although it has been shrinking, consumption of music is higher than it was ten years ago, especially led by technological advances and new models of business. Every major record label has reported losses on a consistent basis over the last decade and, unless the re is a radical action, the trend is unlikely to stop (Altschuller & Benbunan-Fich, 2009: p52). Sales of physical CDs have declined to half of what they approximately were in 2000 with sales of digital music on the internet unable to cover for this particular decline. Revenue fell by 6.2% in 2010 as digital music sales expanded physical CD sales fell, and music piracy on the internet was made worse by consumer sentiment and poor economic conditions. Since the late 90s and early 2000s, technology has had a major effect on most industries. Illegal file sharing and the advent of MP3 technologies has had a negative effect on their revenues and is now regarded the beginning of the music industry’s decline (Altschuller & Benbunan-Fich,... This "The Music Industry and Copyright Issue in The Digital Phase" essay outlines how the Internet has changed music business. New services that were earlier unavailable to the consumer because of technological limitations have now become viable revenue streams, although they are not viable. The new products and services created for the music consumer include mobile services, streaming services, subscription services, and digital downloads (Mertens, 2010: p665). Digital downloads have accounted for approximately 50% since 2010, of total music sales, which is representative of more than 60% of the total business on the digital platform. Currently, iTunes is the major player in this market, which accounts for approximately 70% of worldwide sales of digital distribution. At a price of $0.99 compared to $13 for physical sales, this has had a negative impact on revenues. Subscription services give the music consumer the option of getting as much music as they want during purchase. The mus ic consumer will pay the service provider a fee in exchange for the ability to listen, as well as download the number of tracks they wish. However, this model is disadvantageous to the consumer since; even though, they pay a fee for this music they do not have ownership of the music once the subscription expires (Mertens, 2010: p665). Major players in this sector include Rhapsody and Napster. Streaming services, while offering the consumer the ability to listen to the music they want drastically reduces the revenues of the music companies.