How the Internet

1
How the Internet has Changed the Music Indus
try
Bob Gretchen Ryan Gawlas Susan Wright
2
Music Industry Analysis

• The Internet
• Music Piracy
• iPods and iTunes
• Falling CD Sales
• Who makes money from what?
• Legal Battles
• Napster
• Mainstream Music Progression
• Making It Through the Internet

3
Why Artists are Avoiding the Record Labels

• Fact 90 of records released by major recording
  labels fail to make a profit.
  
• Suggested Retail of a CD 16.98
• Where does the money go?
• Packaging Distribution 25 4.25
• Artists 10 of Remaining 12.73 1.27
• Record Company approx. 10.00 per CD
• 17.56 Million songs were purchased and
  downloaded off the Internet in January, 2006
  alone, totaling 150 growth for the year.
  
• Album sales fell in 2004 from 666.7 million to
  618.9 million,
  
• a 7.2 decrease sales
• declined another
• 8 in 2005.

4
Clap Your Hands Say Yeah

• Brooklyn-Based Band
• Refused Main-Stream Outlets to Gain Popularity
• Played weekly shows at Pianos in Manhattan to
  attract attention.
  
• Distributed CDs by mail from managers
  apartment, selling approximately 45,000 copies.
  
• Among various recognitions, Rolling Stone
  Magazine voted CYHSY as the Hot New Band for
  2006.
  

5
Tapes n Tapes
6
The Boys from Minneapolis, Minnesota

• Members
• Josh Grier (Tapes 1) Guitar, Vocals
• Jeremy Hanson (Tapes 2) Drums
• Matt Kretzman (n)Keyboards, multi-instruments
• Erik Applewick (n) Bass Guitar
• Active since 2003
• Genre Indie Rock
• Style ranges from fast-paced polka to blues
  influenced songs
  
• Labels Ibid Records, XL Recordings

7
Blowing up via the Blogosphere
Gorilla vs. Bear
Music For Robots
8

• Started by Ryan Schreiber in 1995
• Daily reviews, interviews, and music news
• Audience of more that 170,000 per day
• More than 1.3 million unique readers a month
• Music Reviews use two different rating systems
• Individual track ratings out of 5 stars
• Album reviews out of 10.0

9
Chain Reaction

• Pitchfork Music Festival
• South by Southwest Music Festival
• Rolling Stone and Spin Magazine
• XL Records
• David Letterman
• Nissan Commercial

10
Rags To Riches in Under 8 MonthsThank you
Technology!

• Just finished a nearly sold out tour in the
  United States
  
• Have sold out shows lined up for the UK in the
  near future
  

11
OK GoCreating Fans Through Youtube
12
OK Go

• Chicago based Indie Rock band formed in the fall
  of 1998
  
• Videos on Youtube sparked huge popularity!
• Produced low budget video
• A Million Ways Band dancing in their backyard
• http//www.youtube.com/watch?vbav63MWNUKg
• "Here It Goes Again Band dancing on treadmills
  it became so popular that the band performed at
  the MTV Music Awards
  
• http//www.youtube.com/watch?vpv5zWaTEVkI

13
Arctic MonkeysGaining Popularity Through the
Internet
14
Arctic Monkeys

• Indie rock/post-punk revival band from Sheffield,
  England. Formed in 2002.
  
• Used a Viral Marketing campaign ? gave away
  CDs at shows (for free) and fans passed the
  songs along the internet, creating huge buzz.
  
• The band attributes their success through
  fan-made demo tapes and online file-sharing. This
  created fans who knew the music before it had
  even been released.
• Media commentators see the band as leading the
  way to which new bands are promoted and marketed.

15
The Future of the Music Industry
16
Artist-Run Label

• BNLs Artist-Run Label Desperation Records
• Barenaked Ladies (BNL) grossed 1 million off
  intellectual property sales
  
• -Physical CDs -USB flash drives
• -Digital Albums -Ring Tones
• -Deluxe Editions -Multi-tracks for
  remixing
  
• -Streams
• -Licenses for Media

17
Artist-Run Label

• The percentage the band receives is much higher
• No Record Company No Middle Man
• The artist-run model is the future. If we can
  break bands using this model,
  
• the industry will be forever changed.
• -Terry McBride, BNL Manager and CEO of the
  Nettwerk Music Group

18
Personalization

• Jessica Simpson is selling 534 distinct versions
  of her song A Public Affair.
  
• Model Tyra Banks recorded approximately 500
  different names for a new promotion for the TV
  show Americas Next Top Model.
  
• VairTalk coordinated similar campaign for Samuel
  L. Jackson and his movie, Snakes on a Plane.
  
• Amazon.com

19
Acquiring Music

• Peer-to-Peer
• File-sharing programs such as Limewire, Unlimited
  DownloadCenter, K Lite, etc.
  
• Users share files, legality still in question
• POSITIVES NEGATIVES
• -Wide variety of music -Little Technical
  Support
  
• -FREE -No Tutorials
• -FREE -Very Limited anti-virus
  and
  
• -FREE anti-adaware protection

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- www.1st-free-music-download.com

• Because no one knows exactly what the RIAA
  will do next, or who they will sue next, the file
  sharing tips offered below do not guarantee safe
  file sharing and do not guarantee becoming a
  target of the Recording Industry yourself
  someday.

21
Acquiring Music

• Legal Downloading Sites
• 35 of music consumers are downloading legally
  via the internet
  
• Real Rhapsody, Napster, Emusic, Music Match,
  iTunes
  
• Offer music that the sites have LICENSES for
• POSITIVES NEGATIVES
• -No legal questions -
• -Virus-free Downloading -Limited
  Selection
  
• -Technical support -song format
  issues
  
• -Tutorials

22
Aquiring Music

• Zune
• promoting more independent rockers in
  association with their product and music service.
  Music is not compatible with Ipod.
  
• Urge
• Microsofts bid to fight Apples Itunes. Music
  is not compatible with Ipod.
  
• Ruckus
• Offered free through the University of Delaware.
  Music is not compatible with Ipod

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TRENDS

• Music in multiple formats
• Reluctance to pay for music
• Licensing fees
• Personalization
• POWER OF INFORMATION
• Internet has lead to a more informed consumer,
  decreased power of the middle man (i.e. record
  companies)

24
MUSIC GENOME PROJECT

• www.pandora.com

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ROCK ON!!!!!!!