In the 1960s, advancements within the music industry were rapidly evolving. During this time technical developments were put in place and recording of songs became more advanced. One of the first developments of this time was multi-track recording. This was used for recording individual tracks and combining them together. In 1963, the Philips cassette was introduced and became one of the main sources for recorded music alongside the LP and a later development of the compact disc (CD). 1

The compact disc was developed in the 1980s by a group of engineers from Sony and Philips. The companies collaborated together to produce an audio disc that would contribute storing data as well as music. The first years of CDs became a launching pad of music distribution.  In the CDs’ first four years on the shelves, 800,000 CDs were sold in the United States. At the end of the 1980s, fifty CD manufacturers were created to promote the distribution of recorded music.2

As technological advancements were being made, other changes were also developing within the music industry. Major labels wanted to gain control over the distribution of records. This allowed for the beginning of records to be distributed in different department stores.3

The Beginning of a New Generation

Digital distribution of music has become the new medium for music lovers. Today, recorded music of artists is becoming available through other outlets besides CDs. The evolution of digital downloading has progressed, and with music that used to be available exclusively record stores. Now it has become accessible through the Internet. In 2005, digital downloading made its stand in the music industry and it has been steadily increasing every year.

“In the fall, Apple’s iTunes Store became one of the ten biggest U.S. music retailers, ahead of Tower and Sam Goody. And in the last week of 2005, digital sales exploded to a record-setting 19.9 million- outselling CDs for the first time in history.”4 Music Tanks in ‘05’ Rolling Stone December 2006

Considering the rise of digital downloading, music fans are able to access a wide range of artists on the Internet. Independent artists have allowed their music to be accessed through the Internet easily.  Much of an independent artist’s fan base comes from fans downloading their music through different digital media outlets such as iTunes and Myspace for example.

“Before it was impossible to distribute your stuff as an independent artist because you did not have the contacts. Now pretty much anybody can put there stuff on iTunes and once its on the Internet, God knows who’s gonna see it. With Myspace and Facebook all those interacting Web sites make it a billion times easier for kids to get recognized with their music.”5 -Jordan Berger, bassist and manager, Lucy Vincent

With these new media technologies, it is becoming easier to buy a record online then it is to purchase one at a record store. Bassist and manager of Lucy Vincent, Jordan Berger at Higher Ground in South Burlington, Vt. on September 15, 2007. Photo by Jon StewartThis has caused serious damage to major labels, which pride themselves on fans buying physical records Berger says. The Internet has allowed bands to self promote and even self distribute their music, making the major labels less dominant. According to Berger, the Internet is also allowing bands to contact their fans directly, making it easier for the proceeds to end up in the hands of those who actually made the product, and in turn the power is switching from major labels. In a Rolling Stone article titled “Major Labels Drop the Ax” from December of 2007, CD sales went down 19 percent by the end of 2007. This has led to many major labels, such as EMI and Sony/BMG laying off manyof their employees as well as major labels merging together.6

For  major record labels, selling CDs is how much of their profits are made. When musicians sell 500,000 copies of  their CD in one day, the major record companies gain a percentage from that sale, and when no one is buying CDs off the shelves, cuts are being made internally. The major labels are beginning to see the harsh outcomes of sales from digital downloading.

Billboard Overall Unit Sales in 2006 & 2007

“In 2005, digital downloads became a major money maker for the first time, earning more than $500 million as sales of digital tracks jumped from 141 million in 2004 to 353 million in 2005, and sales of digital albums rose from 5.5 million to 16.2 million. In the fall, Apple’s iTunes Store became one of the ten biggest U.S music retailers, ahead of Tower and Sam Goody. The digital boom helped set an offset some of the label’s losses; using Sound-Scan’s formula of counting every ten sold singles as an album, album sales dropped just 3.9 percent.”7 “Music Tanks in 05” Rolling Stone December 2006

The big four labels need to find a way to keep up with this new generation of digital downloading. Music fans are going to access every available outlet to receive music online. The traditional methods for purchasing music are shifting in the modern day world. In the past labels did, and still do a lot to promote an artist. Once a label signs an artist it finances the recording and producing of an album, makes a music video, promotes the artist’s music to consumers, organize a tour schedule and sell their merchandise. The major labels have the upper-hand in regards to vast resources of funding and man power to promote an artist. Now since music can be retrieved online, fans are not buying CDs in record stores as much as they used to and are branching out to independent artists with more ease.  This is a challenge major record companies are having to face. 8

However, even though digital music is progressing, major record labels are still generating a profit off of sales due to promotion and touring. Warner Music Chairman and Chief Executive Edgar Bronfman, is taking on the change of digital downloading and launching new avenues toward the occurring change of distribution that seems to be less about the music.

Billboard Sales By Album Format in 2006 & 2007

“Part of Bronfman’s new strategy will be to expand revenue sources with musiciansso that record sales are but one part of a pie incorporating more frequent releases, touring, licensing, merchandising, endorsements, and sponsorships. Others envisions a time when music–a market still showing respectable growth–becomes more of a product, like mobile phone services or cable television, that flows into your home or telephone at various rate plans. Others argue that music will become free, with record companies and musicians making money from concerts, merchandise, and licensing.”9 -Business Week Online “The Big Record Labels’ Not-So-Big Future”

What’s interesting about this is that society is beginning to see big time artists promoting their songs through mobile phones and television commercials. Music is hitting fans at all mediums and for major labels, promoting their artists through cell phones and television is a profitable investment. Many consumers these days have a song that plays on their cell phone. Now cell phones have an application that allows for music to be downloaded directly to the phone. There is a definite shift that is beginning to occur in the music business and cell phones are a part of this shift.

“Digital Business accounts for a little more than 10% of the overall revenue the average major label generates. But for some individual acts, downloads and ringtones are starting to play a much bigger role in their sales. Song BMG Music Entertainment is publicly touting that some acts are seeing as much as half of their revenue in a given album project come from sales of ringers, tracks and song bundles.”10 -Digital’s Growing Sales Slice, Brian Garrity

From left to right, Kelly Raven, Matt Rosenthal and Jordan Berger of Lucy Vincent. Lucy Vincent is a completely independent
power-trio from Martha’s Vineyard, Mass. that works free of outside management or any form of a record label. Photo by Jon Stewart

Indie Labels at a Major Standard

It is not hard to get caught up in all of the top 100 hits on the billboard. Major labels continue to put out products that are catchy and radio friendly. In 2007 “Crank That (Soulja Boy),” by Soulja Boy (Interscope-Universal Music Group) sold a record 2.7 million copies of the track during the Christmas season.11 However, in 2005 there were only 19.7 million copies sold by the top five albums. With an increase in digital distribution, album sales dropped 7.2 percent.12 With this new medium becoming the wave of the future, independent artists are becoming widely recognized.

“As the majors stumble, independent labels gained market share, accounting for eighteen percent of CD sales in ‘05. Indie labels proved especially adept at the Internet marketing via outlets like MySpace; emo label Victory Records sold 558,000 copies of Hawthorne Heights’ album The Silence in Black and White without radio play. The indie model of earning profits on a broad range of small-scale releases, rather than focusing on the blockbusters, may offer a new direction for the majors.”13 “Music Tanks in ‘05” Rolling Stone Magazine. December 2006

Independent labels pride themselves in producing music based on the artists intent. Indie labels leave it up to the artists to create music that will draw a fan base. For independent artists, touring is the best way to grab an audience and to have them appreciate the music.

Even though independent artists do not have the resources a major label would, it is not as difficult to get music to a large audience because of the technologies available. Independent artists are doing what they can to further their career and go up against major artists as a result. A talent agency in Boston, Mass. titled Boston Event Works finds independent artists by watching them on a live stage. Kevin Baker, vice president of Boston Event Works does not book a band based on what they hear online. His agency goes out to shows where a band is playing to make sure the music is marketable so they will be able to pass them on to other clients.

“We keep our ears to the ground and we have a really good relationships with all the clubs that are out there and we sort of find who’s making waves, who’s building a buzz in their respective markets and try to speak with them. We go out and see the band and if it’s something we think we can work with than we record them.”15 Kevin Baker, vice president, Boston Event Works

The focus of the statement given by Baker is that even though music is making its way digitally, that’s not what some companies look for when booking them. Myspace and iTunes are suitable media in terms of getting the music to fans, but in terms of booking an artist, it is best to see them perform live according to Baker.