FINAL

Today
The times they are a-changin’. Famed rock and roll artist Bob Dylan’s legendary words from one of his most renowned songs continue to hold true today, and surely this aphorism can be applied to the music industry of today’s world. Rapid growth in technology and the Internet has led to a plethora of alternative digital options for consumers to use to listen, share and discover new music.

These new, non-traditional media options have been greatly affecting the music industry as we know it, and will continue to influence and transform the way we run our industry in the future. In the next couple of years, one can’t deny that many things will change in the industry. I would like to focus on five specific predictions of ways that the music industry will incorporate non-traditional media in the next five years.

1. Online Music Stores
Digital music downloading services such as iTunes are increasingly becoming a more popular method of finding new music. iTunes is so user friendly and easy that it has come to the point that consumers are even beginning to accept the fact that music isn’t always completely free— with Steve Jobs standardizing the 99 cent download, iTunes purchases are at an all time high and illegal downloading is nowhere near as prevalent as is what is the mid and late 90s. But the real issue with Online Music stores is DRM—consumers purchase the music yet they aren’t able to use it how they want, on the player they desire, and they aren’t allowed to share it as they please.

However, Steve Jobs’ recent statement that all music should be DRM free paired with EMI’s recent declaration that they plan to make all of their music in their catalog DRM free is promising for the Online Music stores. Indie labels are likely to follow suit with the DRM free tunes, and the other big three will likely feel the pressure. In the next five years, not only will all music on online music stores will be DRM free, but consumers will be able to access the stores not just on their home computers, but through their cellular phones, their MP3 players, their cars, and other interactive media devices. Consumers will be able to purchase music universally and use it as they desire through various player outlets.

2. Portable MP3 Players No doubt about it—the iPod reigns the portable player throne today. Attempts to introduce the Microsoft Zune have failed and the iPod has become a nearly essential item for consumers today—it is to this generation like the radio was to our grandparents, or the Walkman was to our older siblings. The iPod is so powerful because it allows users to download personal libraries of music via the convenient online music store iTunes (or through other illegal DRM-free venues) and offers the portability that consumers desire in a user-friendly, hip little player.

But with the expansion of universal wiFi in the next five years, I predict that new versions of portable MP3 players won’t just be to play personal libraries of music or video. MP3 players of the future will be all-encompassing units that can connect and share files wirelessly between units (a good idea offered by the Zune that failed because of the limited time offer the sharing allowed.) The players will be able to stream user-customized internet radio and connect to online music stores on demand to access DRM free tunes whenever they want them. While we have progressed much, in five years the portability, connectivity and interactivity will continue to expand and grow in the form on multifaceted units and universal connectivity.

3. Video and Music on Demand
We’ve all heard of TiVo and Video on Demand programs. These digital recording systems have caused uproar in the television industry, with networks worried about losing advertising revenues when consumers begin to watch their TV commercial free. The music industry is also following suit, and programs like Applian have emerged. This program is like TiVo for radio, allowing users to record their favorite radio shows, online music, podcasts and satelittle radio either as a live stream or as a scheduled recording. Users can convert the files to various formats and edit the content into their personal file to enjoy at their discretion.

The fact of the matter less than half of don’t watch the commercials anyway and in the next five years they just aren’t going to put up with it (especially with the emergence of such on-demand technology). Americans are subject to hundreds of advertisements every day, and its becoming to the point that we are becoming blind to the bland advertising we see between our favorite shows and we are changing the channel or turning off the radio when we come to a commercial break. So the first step for the next five years is in the advertisers shoes—we will always be influenced by a killer commercial or marketing plan, but advertisers need to think of alternative methods of grabbing the consumer and the 30-second add just isn’t going to cut it anymore—users want and are going to get their music and their video on demand.

4. Portable Video Games
Video games are becoming a great market for the music industry as well, as the gaming industry is booming and the players themselves are becoming increasingly portable and with improved quality. Many of the games have background music to go along with the game, and this offers another opportunity for the music industry to license their tunes and make money. Additionally, games that revolve around music itself have become increasingly popular—take Guitar Hero the extremely popular interactive guitar playing game which in 2005 won numerous awards including Academy of Interactive Arts & Sciences' Interactive Achievement Awards Game of the Year for 2005 and IGN's Best of 2005 Best Music Game. The original version of the game featured 47 playable songs, 30 of these tracks being of the originals and 17 songs that were the real deal. Guitar Hero 2 came out this last November and includes 64 songs, 40 of them being licensed and 24 independent or bonus tracks. It is clear that the music industry will continue to use video games as an outlet to circulate their music and as a source of income in the next five years, and this outlet is not a bad idea considering the gaming industry is also growing.

Take the iPod for example and its latest addition—the iQuiz. Available via 99 cent download on your iTunes, by downloading iQuiz and you will have four trivia games with questions on pop culture, music, movies and TV. Music Quiz 2 even scans your iPod and tests your knowledge of the music and artists on your personal device. The most promising feature is the iQuizMaker interface, a free downloadable program that allows users to create their own iQuizes about anything they desire and share them with other players. This creative combination of gaming, music, and social networking is only an allusion to the kind of gaming that the future will bring as the world becomes even more technologically advanced and interconnected.

5. Social Networking
The concept was simple when it all started—a website that enables users to create personal profiles and connect with others online. Social networking is no longer such a simple concept today, as social networking sites have expanded to include only specialized groups: everything from couchsurfers to virtual pets to music. These sites are no longer just for socialization, but for sharing of knowledge, videos, music, and even selling themselves to the business market. The MySpace music revolution has actually been the most influential site for the music industry, exponentially expanding the ability for a performer to have their music broadcast. Just a few short years ago, a struggling musician could practically remain hopeless to have their tunes be broadcast to a widespread audience via the radio without the proper connections or record label assistance. However, with the expansion of social networking sites, everyone has the microphone and the whole world can listen to their tunes at the touch of their fingertips. The need for record labels is becoming increasingly obsolete as artists are able to use social networking sites to network, create awareness and build their own fanbase—all digitally. In the next five years, record labels may utilize social networking sites for their benefits, displaying their proudest on their sites for fans to discover new music and connecting artists that sound similar to spread the word digitally in a social networking format. If record labels fail to embrace social networking, the social networking business plan just may be more powerful than the traditional promotion plans that record labels currently hold.

Tomorrow
The music industry is an ever-changing force and of course I can’t even fathom the technology that will be developed in the next five years that could entirely change the music industry as we know it. In my lifetime I have gone from a computer and cell phone free life to a life where I feel dead without my computer and cell phone. It is clear that in the last five years the industry has changed astronomically, and the industry’s hesitation to embrace the changing industry is in actuality its downfall. The music industry still has a chance to grasp the technological crutch and get back on its feet, and I hope that in the next five years they aren’t afraid to leave the shelter and enter the storm. I think that Dylan would approve.

Keeping the Earth Alive and Singing

Popular music of today isn’t the same as popular music in the 60s and 70s. Of course today’s music is digitally re-mastered with higher quality sound and is more widely accessible because of the larger number of music venues, but one could argue that the biggest difference isn't about the sound quality or the accessibility of the music. The content of the music itself is different. While music of the 60s and 70s was often fueled by political and cultural conflicts, today’s music is more often than not much more superficial. Live Earth, a worldwide concert with goals to combat global warming, brings music back to its politically charged roots. The tour will hit all 7 continents and will last 24 hours on 7/7/07, with artists performing around the world simultaneously to support the same cause. Live Earth features critically acclaimed performers such as Bon Jovi, John Mayer and Madonna in the U.S. location alone, among many other world renowned acts.

The U.S. show will now be held at the Giants Stadium in New Jersey, but this location is only a recent determination after Republican lawmakers refused to authorize the concert location of the Mall in Washington D.C., stating that the partisan concert couldn’t be permitted in such a venue. It is unfortunate that peaceful protest through music is no longer embraced by our government and is instead considered unacceptable. However, with the expansion of the Internet and using this technology as a tool to stream the concerts to the entire world, the actual location of the event becomes a non issue.

The concert will be streamed live via liveearth.msn.com and also broadcast on 120 television networks around the world, reaching approximately 2 billion people. The concert’s organizers (led by political spokespeople such as Al Gore) want to educate and inspire businesses and governments around the world to take action to solve the climate change crisis, and by using technological advances, they are able to reach the largest possible audience and use music as a tool to promote change. Sound familiar?

Beatles on the Apples

The big Apple Computers released a statement this week that said they have settled a lawsuit with the littler Apple Corps., the business entity that owns the Beatles. Apple Corps. had recently sued Apple Computer for $59.4 million due to accounting fraud and failing to pay royalty payments. This is the latest lawsuit in a series of lawsuits that have occurred over the past 25 years. The legal battles have kept The Beatles off iTunes, but this recent agreement is promising for fans who want to purchase one of the Beatles’ 255 songs via the iTunes store.

Steve Jobs has been teasing consumers with the speculation that Beatles music would soon be available on iTunes. The most notable tease was at the 2007 Macworld conference in January, where when displaying the latest iPhone invention, Jobs played Beatles music from his phone during the demonstration.

It is clear that something is heating up between the two Apples. Apple Corps. has been stubborn long enough—it is time that they embrace the idea of putting Beatles tunes on iTunes. While the most hardcore fans have likely already downloaded their Beatles songs illegally, with a proprer marketing strategy and a digital rerelease album with extras and remastered content, it is likely that consumers will positively respond to the Beatles music beign available online. In fact, some experts even guessed that the introduction of the Beatles catalog on itunes could make from $50 million to $100 million revenue. While some consumers may be hesistant to purchase because of the frusturation of how long it took to put the Beatles catalogs online ,and others will be unwilling to replace their illegal catalogs with legal versions now that they are available, the fairweather Beatles fan will be likely to check out the Beatles albums on the iTunes once it becomes legally available. By putting the music online, both Apples will grow.

Lots of Good Apple, But A Rotten Apple Spoils the Barrel

Apple recently made a deal with EMI (one of the four major record labels) to offer DRM-free music from their catalog via the iTunes store. This means that there won’t be any limitations on EMI music (shocking, I know—music that you purchase legally you can actually use in whatever way you want, as if you had bought the CD.) This was a good move for Apple, giving the consumers what they want and making legally purchased music have the same DRM-freeness as illegally downloaded music. But Apple’s mistake comes with the decision to charge $1.29 for the DRM-free track and offer this premium version for download alongside the $.99 standard version, which still has DRM. The reason why so many consumers download music illegally is the price. At almost a dollar per song, music can get pretty pricey. Consumers are barely willing to pay .$99, and by charging even more for DRM-free music, Apple is spoiling the entire deal. Consumers will not be willing to pay $1.29. Some claim that the higher quality of the $1.29 songs is enough for some people, but for me at least I generally listen to music via my iPod or my computer speakers (not the best sound quality at all, simply because of the speakers.) The upgrade in quality probably wouldn’t even be noticeable at all.

Apple definitely did a good thing by breaking its boundaries and allowing the sales of DRM-free music. It is a good idea. But they must not charge us more for something which we already claim is too expensive—it’s just poor business. If Steve Jobs were to get rid of the DRM versions of songs completely and just sell DRM-free tracks at $.99, I think that both iTunes and EMI would see rewards, and this would encourage other labels to jump on the DRM-free bandwagon.

Sirius Behind the Steering Wheel but Going Nowhere

Sirius satellite radio systems have recently announced that they are introducing factory-installed Sirius radio units on a number of vehicles, including BMW’s Mini Cooper and Ford’s Lincoln MKZ, MKX, Navigator, Navigator L and Mark LT starting with 2008 models. For the Ford vehicles, the unit will come with a six-month subscription with hopes that the consumer will purchase the monthly fee based subscription thereafter. In the Mini Coopers, the consumer must purchase the component at $950 and a subscription to the service goes for $1,400 and lasts the life of the vehicle, which amounts for a pre-purchase of approximately 9 years of use. The strategy of including thier prepaid service in the cost of the car is clever—a consumer already spending a large amount of money on a car may not notice paying a couple thousand more.

However, I doubt that consumers are that blind and I can’t imagine this prepayment sales tactic will amount to very many consumers purchasing the installation and lifetime subscription package. Consumers who are unfamiliar with Sirius radio won’t even know if they will like it, let alone spending over $2,000 and committing to the service for the next 9 or more years. Also, considering the face that Sirius has been in the news recently for its merger with XM may make consumers wary of the stability of the brand and will therefore be less likely to be willing to commit to the service for an extended period of time. Sirius is trying to force consumers to purchase their product for an extended period of time without any trial period, and while the idea is novel can’t imagine that many consumers will fall for it.

Campuses Whip Back to College Crackdown

The Record Industry Association of America is cracking down on piracy on college campuses, a site where excessive piracy occurs due to illegal file-sharing over high-speed college internet networks. The RIAA’s tactic-- sending letters not to the students themselves who have been targeted, but to their universities. They recently sent out pre-litigation letters to 400 students via their respective 13 universities across the country that threaten lawsuit if the student doesn’t settle for between $3,000-$5,000 within the next 20 days. The student can log on to p2plawsuits.com and make a quick settlement online in order to avoid litigation. The organization plans to send 400 more next month. The university is expected to forward the letter to the student, acting as a messenger for the RIAA. This tactic makes the university aware of the problem of copyright infringement at their school, and the RIAA hopes that this will encourage universities to begin to implement methods that would tackle the problem and stop piracy at their university. Additionally, it is meant to create bad publicity for the university as a whole (USC has made RIAA’s publicly-issued ranking of the College Piracy Top Five, coming in fifth.)

However, campuses are cracking the whip of resistance against the RIAA. University of Maine has joined with administration at the University of Wisconsin and the University of Nebraska in a refusal to be the messenger for RIAA and a refusal to provide student information to the RIAA for them to target said student for piracy. The universities will inform the student if they receive a pre-litigation letter, but they will not forward it to the student directly and the student will have to come pick it up from a disclosed location.

The fact of the matter is that their method of attacking the user through their school will fail to stop kids from downloading music illegally, and more and more campuses will begin to be uncooperative with the RIAA’s requests. Check out this video that was released by the RIAA, available via YouTube and sent out to schools across the country explaining how students are able to be caught and targeted for piracy.

The video wasn't well received by students (many of the YouTube comments are sarcastic and its clear that the video is corny.) As a student at a top-five-targeted school, I never saw the video so USC must not have distributed it widely. While most campuses have implemented student conduct codes that prohibit file sharing, still these restrictions just won’t stop students from sharing. Since 2003, there have been 18,000 lawsuits, yet P2P filesharing has increased froom 5.5 million users per month to 9.3 million.

Piracy is definitely an issue, but suing the consumer is not the solution. The RIAA needs to develop a way for students to access music when and where they want it, free of restrictions, and they will be willing to pay for their tunes if they get the product they want.

Record Labels No More, Turn to the SnoCap Store

With the development of programs such as SnoCap which allow artists to sell their songs directly via their MySpace page, the necessity of record labels is slowly becoming obsolete and the all-digitial, do-it-yourself promotion is becoming increasingly popular with artists. Artists are able to record their songs and then through self-promotion via their MySpace websites, can set their own prices for their songs and collect the money themselves without a deduction of any of the profits. Take a shot of Tila Tequila for example—the self-made MySpace celeb has turned down two record label offers, claiming that she would rather have complete control over her music and her image rather than just another artist who is just a part of “the system”. She currently sells her songs via using indie911's Hoooka application on her MySpace page as well as on iTunes, but she has yet to release a record. Her fame has been built digitially alone, and her songs are downloaded directly to her consumers in a digital format. The singer has over 1.7 million friends and she is in the top 50 of MySpace artists for her genre. She has lots of fans, but the question lingers—is she making money? The growth of paid downloads is on the rise—up 54% this year. But still, the track is available solely online, and while the direct access from the MySpace pages is effortless, it may be just as easy for consumers to turn to P2P software when they are already at their computers. But SnoCap is still promising for struggling artists and it’s partnership with MySpace and the creation of MyStores is a promising venue—a recent study revealed that this year MySpace was recognized as a music outlet by 54% of survey respondents, up from 16% awareness level just 12 months earlier. And last week SnoCap signed a number of independent labels for distribution through its software, so it is expanding to artists who are signed to labels as well as unsigned artists. If the major record labels were smart, they would keep this Sno ball rolling and allow their music to be distributed through MyStores as an alternative venue to profit from legal, online downloading.