Indie Music- Trends.
The rise in the use of Internet was a movement counter to that of record sales for indie music. Both access to the Internet and high-speed connections, represented by broadband penetration, have seen a steady increase since the start of the millennium. As discussed in my blog Trends in Record Sales of Indie Music, several studies have utilized broadband and Internet penetration as proxies for illegal file-sharing. In the years from 2000-2003, this assumption may hold valid. Since legal digital distribution had not yet been widely successful, consumers, with relation to music, could really only access and download songs illegally online. Thus, the trends in the rise of the prevalence of Internet and broadband connections could be considered representative of Napster’s inception and the growth of music piracy from 2000-2003. It is important to note, though, that the widespread use of the Internet also birthed other phenomena such as social media and online communities, which would play a large role in the music industry as the 21st century continued. With widespread legal digital distribution becoming available in 2004, consumers now at least had the option of purchasing music online, which was reflected by the first growth, a modest 1.4% in indie music record sales by value since 1999. As a result, the role of the rise in Internet and broadband penetration take on a new set of implications with regard to record sales expanding to include, not just piracy, but also digital music purchases and the beginnings of new channels of marketing and promotion. The recovery of sales in 2004 may also reflect the RIAA’s key legal victories in the previous year that helped shut down Napster and other similar P2P file sharing services.
One of the most fascinating developments directly resulting from online music retailers, though, is the resurgence in the sale of indie singles, a practice that had become practically extinct by 2000. As CDs, which were mostly presented as albums, emerged as a dominant format for the sale of music, singles, which had some popularity during the 1970s in vinyl format, were considered by many an irrelevant format. In fact, they were so insignificant that Liebowitz, correctly, went as far as omitting them from his early analysis. Programmes like Gnutella were more advanced form of P2P file sharing, directly connecting computers and actually creating a dispersed network which consequently removed the need for a centralized directory; unlike Napster that hosted file names on its own server.
However, as discussed in my blog Effect of Piracy on The Indie Music Industry, in 2003, RIAA again filed a suit, this time against individuals who had used Kazaa, the P2P program, to share large number of files illegally. While the system was difficult to fully shut down due to its diluted nature, the record companies (again) managed to win large settlements from these cases. Peer-to peer file sharing services may have actually helped assist in establishing a market for digital singles even before legal means of selling them existed. Applications such as Napster had user friendly interfaces that allowed illegal downloaders to search the names of virtually any individual song and download it practically instantaneously. The advent of the iTunes store enabled consumers to purchase single songs from their extensive library legally, conveniently and with guaranteed high quality, for a relatively low price of 99 cents. In this way, they were able to take advantage of this newfound demand for individual songs while helping record labels recover at least a portion of sales displacement due to piracy.
Waldfogel’s 2010 paper is one of the first to attempt to try revaluating the effect of music file sharing in the “iTunes era.” With the emergence of legal digital distribution, consumers now have the ability to buy, rather than steal, individual songs, with added benefits such as cover art and guaranteed high quality files. I have discussed this in detail in my blog Research Models on Prediction of the Indie Music Industry-2. In this series of blogs, I have been sharing with you the effects of internet on the indie music industry. Clearly there is extensive literature examining the effects of file sharing, and more broadly, increased and improved Internet access, on record sales. This only covers half of the story, though.
In my next blog I am going to write more about the impact of internet on indie music business as a whole. Please share your experiences and I will add them to my future blogs.
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