Sample Paper on The Impact of the Internet on the Musical World

Chapter 1: Introduction

Background and context

The exponential growth and adoption of the Internet in the 1990s led to sea changes across most industries. Another, but was the creation, distribution, and consumption of music that experienced the greatest disruption in the shortest period. By mid-2000, record companies had registered a 14% drop in the sale of compact disc sales (Bates 2004). By the mid-2000s, the emergence of social media and the maturation of digital download and sharing sites and applications (iTunes launched in 2003) had manifested two serious developments. Firstly, consumers did not have to wait for days or even weeks for music to be shipped, they could access it at the click of a button on the internet (Shapero 2015) Secondly, the susceptibility of music to privacy increased exponentially, so much so that the artists became aware of the vulnerability of these new forms of distribution. According to Waldfogel (2012), the increase in piracy and ease to unlawfully shared music- a phenomenon first established by Napster in 1999- seriously cut back record sales as an exponentially growing number of people had access to free, high-quality music.

The outcome of these developments was that record labels lost a fair share of their capacity to establish and service the “icon” status of the artists – the scenario in which an artist experiences enough success to become a force beyond the music industry and influence fields such as politics. It is argued that in order to perform this task, record companies heavily depended on the capacity of their artist’s music to chart impressive all around the world. (Shapero 2015). This dissertation explores the impacts of the internet on the music industry by specifically delving into the negative and positive effects of the phenomenon. There has been a long-standing debate by proponents of the internet age and music industry players on whether the benefits of the internet on the music industry outweigh its demerits and vice versa. Exploring the argument through a combination of empirical data analysis and a comprehensive review of literature gathered over the past twenty years will facilitate an accurate mapping of the trajectory of the music industry with the development of the internet, helping to clearly outline the challenges and benefits that it has availed and laying the argument to rest.

Today, consumers get music instantaneously through platforms such as YouTube, Spotify, Soundcloud, and so on. Some of which are free access platforms. Needless to say, record sales have plummeted so much that streaming is the new norm- because the abundance of free music powerfully discourages consumers from buying and holding onto music (Gheorghe & Soltanisehat 2018). The Internet itself has proceeded from just a digital platform to become a socio-technological system. Meaning it goes beyond the economics of it all to shape consumer culture through technology (Gheorghe &Soltanisehat 2018). Evidently, the past 20 years have seen extreme changes in the music world, yet in order to understand the scope of these developments, it is necessary to first go back and examine the traditional (pre-web) supply chain of the music industry.

The Pre-web supply chain of music. The music supply chain is the string of parties and actors from the artist to the distributors whose collective action facilitated the consumption of music as a commodity by the general public. The “pre-web supply chain” is this aforementioned structure before the disruption of the internet and the emergence of the online platforms (as well as problems) that have extensively re-shaped the music economy (Lewis, Graham, & Hardaker 2005). In manifesting a sea change in the traditional supply chain for music, the Internet re-wired the economic model through which record companies controlled (and very successfully so) the revenue volumes of the sale of music. For instance, between 1999 and 2008, revenue in physical music sales in the United States alone dropped by well over 50% from $12.8 to $5.5. billion. The corresponding global figures across the globe for the same period match the U.S trend; the total revenue dropped from $37 to $25 billion.

The pre-web supply is notably made up of the artist and the record company at the top as the producers and distributor respectively while the base of the model consists primarily of retailers in various capacities. Radio, TV, DJs, and dance clubs, as well as event organizers generally played a secondary retail role while record stores were the main form of the retailer. Indeed, this pivotal role of the record store explains why the decline of the compact disc saw a dramatic drop in the volume of physical sales (Waldfogel, 2012). Television networks such as MTV were secondary retailers who made profits by playing music from specific artists after making arrangements with their record labels, while dance clubs and DJs were informal retailers whose distribution of the music was heavily defined by the trend upstream of the music supply chain (Lee, 2016; Lewis, Graham,& Hardaker 2005The DJs and dance clubs delivered the music through their role in building a music scene while the event organizers did so through public promotional events and club nights (Lewis, Graham,& Hardaker 2005). Notably, the internet did not eliminate the roles of many of the supply chain elements after the artist and the record company. However, it rendered these parties disposable; the end-user is still able to access the music without any of these parties, which means that the role of retailers, distributors, TV, and radio in the supply chain is vestigial at the very least.

Evidently, the internet quickly unseated compact discs (CD) as the primary value driver in the supply chain of music. As a result, the record company has to go far beyond the sale of CDs to not only earn back the money it spends on the artist’s promotion, merchandising, and content distribution but also to make some profit (Alvarez, 2017; Lee, 2016). Today, the traditional (pre-web) supply chain of music which typically included music publishers, record companies, associated parties such as legal and independent promotional agencies can be truncated to just the artist and the consumer without a significant loss in outreach for the artist (Andersen& Frenz 2010; Lewis, Graham& Hardaker 2005; Handke, Balazs, & Vallbé 2016). A good case in point for this development is the “Soundcloud Rap’ phenomenon. An August 2018 review of Soundcloud in the online Financial Review reports that the free online streaming platform has created superstars within the underground hip-hop scene whose impact exceeds well into hip-hop culture and is driving various cultural traits such as facial tattoos (Teffer, 2018). Needless to say, the implications are dramatic on both the consumption and the economic fronts, not to mention the secondary dimensions such as the legal and cultural aspects of the music industry. The complexity of this development is, therefore, very evident. Given the fact that the internet is still growing and its role in the music industry evolving in tandem with the growth, it is necessary to understand how porosity and fracturing of the music industry translate into passivity, negativity, and implications for the industry and culture at a time where the internet is king.

Research aims

There are both upsides and downsides in the internet’s takeover of the music industry. By and large, the leading narrative is that the benefits of the internet strongly eclipsed the downsides. However, this is an argument that a lot of artists will strongly oppose because the ease of sharing and access to music has made it much more difficult for an artist to not only monetize their content but also protect it from malicious individuals. Proceeding from these facts, this study explores the interaction between music and technology with the specific aim of establishing the extent of both the positive and negative influence the internet has had on the music world. In addition to this goal, this study effort will also venture into digital pirating and study how the internet has enabled this vice within the music industry.

Keeping in mind the fact that bootlegs have been a problem since the mainstream commercialization of music using vinyl discs, this paper will attempt a comparison of piracy in the pre-and post-web music supply chain to accurately describe the enabling effects of the internet for the problem. Finally (driving from these two key areas), the research will seek to establish how satisfied musicians are with the revenues they make from the internet-based organizations that host these creators’ music. The tri-focal approach to the research question is expected to provide an in-depth and objective probe into the matter.

The rationale and importance of the proposed research

Two decades after the internet officially took over the music industry, the debate of whether it is killing or growing the music economy rages on as violently as ever. As one would expect, proponents of the internet and the sharing technologies it supports argue that both the music economy and music itself as an art form and cultural artifact have been revolutionized in ways that could not have been possible without the miracle of the internet. Arguing along these lines, Andersen and Frenz (2010) urge people to stop blaming the peer-to-peer(P2P) file-sharers, insisting that these developments are the result of technology and adding that disruption is inevitable. Spilker (2012) puts things in perspective further, adding that listeners now have the option of not buying the album because, at some point, it will be freely available online. Understandably, Andersen and Frenz (2010) state that the unwillingness to pay and the desire to hear the album before paying-in order to decide whether it is worth paying for-have both been these findings is that the internet has given the music consumer hitherto unimagined bargaining power. Needless to say, the economics of these developments are worthy of further exploration.

Contrary to the views expressed in the preceding paragraph, artists have a less apparent position. Virtually every artist is in support of and appreciates the internet because of the ease of outreach that it provides- it has eliminated the need for major record label merchandising and promotion. Sen (2020) clarifies this proposition with the observation that the entire has provided a means to direct interaction between fans and musicians. In a more commerce-centric argument, Dörr, Wagner, and Hess (2013) argue that the internet has enabled artists to directly sell their music under the Music as a Service (MaaS) platform through streaming. Butler (2019) endorses this view with the argument that even major record labels are seeing a rise in streaming revenues even though the mechanism mostly benefits independent artists.

The above benefits notwithstanding, the same artists are bedeviled by the harsh reality of making music that consumers may never pay for because some of the streaming platforms, including Soundcloud (which is one of the most popular), do not pay for hosting musicians. They have to contend with the question of building a fan base from free music or trying to monetize their product and probably attracting a much smaller audience. In an age where streaming allows for very little or no service charge at all to consumer music, it is only natural that audiences will gravitate towards platforms and artists who offer the lowest prices on MaaS. Alvarez (2017) demonstrates this fact when he indicates that the total revenue of money made from ad-supported music (which is music that has no price on it but generates revenue by hosting ads) is negatively disproportionate to the size of its consumer pool. In the end, the symmetric market structure is awfully upset; artists deliver the service but get very little to no returns, with Alvarez (2017) demonstrating that there are close to 1 billion consumers of free music every year for every $600 million dollars made. It has been argued that owing to the unfairness of this and other market conditions, artists lack motivation and may produce low-quality content as a result. The rationale of this study is to shed a stronger light on the above matters and describe their intensity and breadth. It is expected that this research will deepen current discourse on both the merits and demerits of the internet in the musical world. It is expected that these findings will serve as informed recommendations on how musicians can overcome the ennui they experience from the asymmetrical market structure so that they can keep making great music.

Research questions

The positive and negative outcomes of the internet are a contribution to music piracy, and the economics of musicianship in the era of free music access are the key concerns of this study. In a bid to address these issues, the review of the literature and the theoretical model will be founded upon four main questions thus;

  1. What are the positive and negative effects of the internet on the musical world?
  2. How has the Internet contributed to music piracy?
  3. Do musicians get adequate financial compensation for the music sold over the internet?
  4. What is the future of music in an increasingly connected world?

Chapter 2: Literature Review

Theoretical framework

The study will be conducted within the parameters of the social exchange theory. The premise of this framework is that people’s interactions with others and society as a whole are moderated by the rewards and punishments they target, get, or seek to avoid. According to Ghahtarani, Sheikhmohammady, and Rostami (2019), people are psychosocially hardwired to conduct a cost-benefit analysis of every individual they meet as well as their actions and participation in various situations in society. Typically, approval and disapproval during a first-time interaction become the key determinant of the repetition of certain behaviors or the encounter/avoidance of new individuals. Simply put, the behavior of a particular individual can be described as the difference between the benefits of and the costs incurred during the interaction.

Within the context of the research topic, the social exchange theory applies to the relationship and interaction between the artist and the consumers of his/her music. To be specific, the general idea is that the advent of the internet in music distribution and consumption has dramatically reduced the rewards on interaction on the part of the artist to the point where the cost of interaction seems to be incrementally outweighing the returns. Testament to this argument is the observation by Tam, Feng, and Kwan (2019) that digital piracy is strongly linked to morality because people understand the social implications of the actions surrounding their piracy and generally perceive the act as morally unacceptable. Although there seems to be an underwhelmingly low pool of evidence focusing on P2P sharing of freely available music and the consumption of free music by consumers, it is clear that when it comes to piracy, law, and punishment are the main incentives against consumers’ illegal interaction with artists. All factors considered the social exchange theory provides an exhaustive mechanism with which to analyze artists’ dilemma for making music that they know will not be paid for as well as to dissect the behavior either in service of themselves or in support of the artists.

The facts of the above paragraph introduce music piracy as a sub-topic for which a review must be conducted through a theoretical lens. Neutralization theory lends itself to this matter because it explores mechanisms (the neutralization processes) through which people suppress specific values, albeit momentarily, in order to engage in acts that they would typically deem as illegitimate/wrong (Brown 2016). Piracy itself is more complex as a subject because it can be perpetrated by artists as well as consumers. As a matter of fact, Massad (2014) argues that artists have been proven to be more likely to commit piracy than consumers of music. It needs of telling that people conclusively agree that it is wrong to pirate music. However, some of the motivations for such actions include reasons such as the need to listen to the music first before deciding whether a body of work is worth paying for or wanting to listen to only a few songs in a body of work and, therefore, pirating the few songs in a bid to satisfy this desire (Andersen & Frenz 2010). Neutralization theory will help to clarify the reasons and factors behind piracy, thereby casting a much-needed light on the negative sides of the internet’s disruption.

Positive Effects of the Internet on Music

A number of positive effects have been put forward as the main merits of the internet. Notably, these arguments center around the capacity of the internet to drive outreach and facilitate the growth of fanbases for solo artists and independent content creators for whom the lack of major label backing would almost guarantee failure in the pre-web era of music. Attention must be paid to the fact that many of these arguments are based on actual facts and statistics as evidenced by the concept of “viral” content on social media being used by springboards by up-and-coming artists to launch successful careers and even land major record companies contracts.

Leveling the playing field. Less than two decades ago, the concept of viral content was not only unheard of but practically unimaginable. By all means, the idea of successful careers being launched from a single piece of unprofessionally recorded and released material was even more far-fetched. It was until the maturity of some of the earliest social media like MySpace, Facebook, and YouTube that the sharing of music actually started drawing attention to individual talent. The ultimate outcome of this development is that even though the dynamics in mainstream media remain the same across the world’s major cities, the internet has increased market access for the artist community as a whole (Verboord & Noord 2016). An argument can be leveled against this claim; evidence suggests that even with this increase in market access, traditional media still pay attention to artists from cities that have a long-standing history of musicianship. The takeaway here is that while the internet may have increased market access, the geographical location of the artist may still impact market outreach.

One of the greatest benefits that have accrued to the leveling of the playing field is the generation of revenue from streaming. According to the Recording Industry Association of America (RIAA), 75% of all the revenue the music industry generated in 2018 came from streaming (Butler 2019). It goes without saying that for independent artists who own their music and who have a very low capacity to generate income from performance and endorsements (from their star power), streaming is one of the best tools that they can use to make a decent living. It is indicated that in the 2010s, streaming continues to grow overwhelmingly fast to become by far the most dominant form of distribution (Butler 2019). The decentralization of the distribution apparatus by the internet is by all measures the most rewarding benefit for small-time artists without the backing of major corporate distributors and publishers.

Other researchers project that with the advent of the blockchain (.bc) format that seems to be the future of the industry on both creative and economic fronts, the decentralization of resources and the leveling of the playing field is set to be even more dramatic. According to Gheorghe and Soltanisehat (2018), the rise of blockchain technology is set to completely even the playing field and put every single actor in the music industry (with the exception of consumers) on the same level as demonstrated below.

Fig 1: The music economy of the bc internet age, which is postulated to be the next frontier of the post-web music economy (Gheorghe & Soltanisehat, 2018).

In the very likely event that this projection unfolds is predicted, it would be justifiable to argue that the internet laid the foundation for a completely fair playing field in which no single actor has the advantage of resource or size over another. Admittedly, such an idealistic economic landscape may not be sustainable because it would come with its own demerits such as having a threshold of entry that is too low. Needless to say, the accuracy of this project can only be tested over time.

The digital economy and live music transmission. It has been strongly contended that although the internet has extensively undercut the physical sales of music, it has given something back; it is now much easier for artists to make a lot of money from live shows and other avenues derivative of their music because of the platforms for transmission that are dependent on the internet. Cameron (2016) indicates that the low costs for transmitting promotional information for music as well as live recordings of the shows themselves are what the internet has given back in exchange for taking away physical sales. The argument is endorsed, albeit indirectly, by the sentiments of Verboord and Noord (2016) in their argument about the expansion in market share; indeed, access to a much larger audience at zero costs is bound to boost the consumers’ awareness of the artists, effectively boosting the brand equity of the music creator and potentially opening doors to live performances, brand endorsements, features with more established artists and so on. It follows, therefore, that the loss of physical sales is offset, albeit disproportionately, by a more vibrant live performance and alternative (non-album sales) means to revenue.

Distance between the artist and the musician. The capacity of the internet to reduce the distance between the artist and his/her fans is one of its greatest selling points and by far the enabling factor for its capacity to level the playing field as described above. According to Sen (2010), fans and artists “come together on the internet”, a phrase that in its simplest sense refers to the direct contact between musicians and the consumers of their content. One of the greatest challenges for artists in the pre-web music economy was delivering their material across distances. The only solution to this conundrum was touring. Artists without major record label backing were not only unable to do this across international boundaries but also struggled to scale it within local markets if they did not enjoy “superstar” status (Shapero 2015). What the internet has done, therefore, is eliminate the barrier of distance between artists and audiences, a development whose greatest achievement is, perhaps, the closing of the psychological distance between the fan and the creative process for the music they consume.

Within the context of distance is the role of social media, which cannot be understated at any level because it is by far the bridge between artists and their fans. Verboord and van Noord’s (2016) analysis of the geographical presence for artists presents the view that a significant amount of attention is gained by all artists outside of their domestic market by way of social media. However, these findings do not categorically explore the role of social media in improving the relationship between the artist and the audience. With regard to this subject, understanding the changing dynamics of cultural products and communication exchanges between fans and artists are key to understanding the dramatic role of the internet in fan-musician relationships. Diane (2016) summarizes views across current literature on the subject when she opines that “The rise of social media has empowered fans to share their cultural products and communications more easily. It has led to a focus on “collective creativity”, or content creation that could not have been developed without a group” (p. 570). What this observation means is that fans are now able to directly influence the creative process for the creation of music, sometimes in real-time.

The outcomes of fan influences on the creative process are profound on both the cultural and commercial fronts, the creative side notwithstanding. For instance, from the mid-2010s, the fan video phenomenon has rapidly grown to become the most impactful yet low-cost means to achieving a highly relatable but culturally rich video for both signed and independent artists. An explanation for this is concisely provided in the views of Diane (2016) concerning the concept of the intertextuality of music video creation and how artists now leverage this feature of music videos to involve their fans in the creative process. Music videos leverage images and music to communicate messages. With the advent of the internet, it is possible to capture as many images and symbols as possible across a virtually endless spectrum of cultures and social spaces. Everything from “parodic allusion self-reflective reference, creative appropriation” to even “plain inclusion” is now possible (Diane 2016, p. 572). Better still, artists do not have to handle all these elements because the conversational nature of online music sharing platforms allows artists to directly invite fans into the creative process. From a socio-political perspective, one could argue that the internet has democratized not just the consumption of music but also its creation. The concept of democratization merits a more in-depth analysis given its extensive creative and economic effects on the music industry.

The democratization of music and the establishment of online music as spaces of discourse. The concept of the democratization of music by the internet cannot be fully understood without first acknowledging the foundational aspects described above: the leveling of the playing field and reducing the distance between the artist and the musician—mostly by eliminating the constraints of geographical distance. As outlined above, the internet has not only achieved the above but also enabled the musician and the artist to collaborate while giving them the freedom to “voice their inner thoughts and express their creative urges.” (Sen 2010, p. 15). In view of these observations, one would argue that the internet has given the artists and the fans a voice or, in other words, a common voice with which creative expression and expressions on creativity can be let out into the world. In many ways, this is a situation that resembles a democracy because, in the pre-web economy of music, major record labels were technically the monopolies/aristocrats whose voices drove the trends, determining consumption, and shaped the fate of artists and their relationships with the people who consumed their music.

Artists are not only able to sing and share their music at virtually no cost—all that one needs is an account on any of the innumerable digital platforms and these accounts almost always have zero opening and running costs. With nothing more than computer access and elementary internet knowledge, artists have not only touched the world but also understood exactly who is listening and what they feel about the material (Sen 2010; Shapero 2015; Verboord & van Noord, 2016). Above all, however, discourse through and around the music is now possible. Apart from being the most reliable metrics for the popularity of an artist and the quality of the music, everything from likes and comments on YouTube video to the number of streams on Spotify and Soundcloud can be translated into discrete data on the debatable issue is the song or the artist is talking about one. Sen’s (2010) view that the internet has “opened up avenues for individuals who have been traditionally powerless and voiceless” sums up this argument while the observation that these people are now able to “gain a sense of power over the discourses and texts that they are able to produce” bespeaks the socio-political clout that the internet has provided for all artists across the globe (p. 15). The social, cultural, and political dimensions of the music economy have therefore benefitted tremendously from the internet as well.

Summarily, the benefits that the internet has provided within the music industry generally center around the independent artist. By and large, the capacity to traverse distances virtually and touch the entire world went from being a dream to becoming a reality within years of the entry of the internet and the entrenchment of streaming services into the music economy. In this manner, the internet has almost completely eliminated major record labels as the key factor for musician’s success and allowed artists to rely more on their talent and creative ability as the main determinants of success, at least in their personal artist economies. Elsewhere, the internet has brought the musician and the audience closer, so much so that it is now possible for the artist to infuse his/her audience’s cultural products into the creative process, notably with the help of the audience itself, all for little to no cost at all. To a large degree, these benefits can be seen to manifest in enrichment and deepening of the artist-audience relationship while still enriching the political, cultural, and social dimensions of the music economy and balancing the odds for both the small-time independent artist and the superstar with major record label backing. Even so, these benefits have accrued to the music industry at a cost that many experts feel is nothing short of disastrous, particularly in the dimensions of copyright and sales.

Negative Effects of the Internet on Music.

The negative and positive effects of the internet on the music industry have for a long time been debated, with polarized views on both sides of the subject. Indeed, at the outset of the streaming and digital era, much of the music industry itself was radically opposed to the internet, file sharing, and all the developments that came with the internet. In the pre-web age, the money spread across the three domains of the music industry—that is recording, publishing, and live music—was evenly spread across them (Alvarez 2017). In the two decades since the ascension of the internet to become what it is today, publishing has taken a serious hit because of dramatic changes in the publishing sector and the capacity of the internet itself to facilitate publication for independent artists in various forms. Because of this change in publishing, copyright challenges and piracy and make up an overwhelming bulk of the problems that have been attributed to the internet. A steep decline in sales is another problem, one that has been directly linked to both the changes in the dynamics of publishing (copyrighting) and piracy (Sen 2010; Alvarez 2017). A critical analysis of these three problems reveals that they are heavily centered around corporations and businesses within the music industry as opposed to individual artists.

Piracy. There is consensus across all literature that piracy was the original (and continues to remain the biggest) negative effect of the internet on the music industry. To put things in perspective early enough, up to 900 million people were estimated to have accessed music illegally or accessed illegal music on the internet (Tam, Feng, & Kwan 2019). Since about 3.2 billion people used the internet in 2015, it justified arguing that 28% of all the music consumed on the internet as of 2015 was somehow affected by piracy—that is, 1 out of every 4 people who consumed music on the internet either directly or indirectly fostered piracy. Although these findings are quite depressing for all persons in the music industry today—it is safe to assume that the level of piracy has increased with the increase in internet use—the case against the internet due to piracy can be traced back to 1999 with the introduction of Napster.

In the second half of the 2000s period, piracy become so rampant that the logic of litigation and the targeting of individuals for copyright infringement ceased to make economic sense. In demonstrating how bad the problem was, Mitchell, Scott, and Brown (2018) note that in the last five years to 2009 alone, over 30 billion songs were illegally downloaded on various peer-to-peer networks. The RIAA, which posted these numbers, seems to be implying that for every single one of these songs, a dime could have been made that was not, largely because of the enabling nature of the internet in this crime. Mitchell, Scott, and Brown (2018) also state that according to various sources, it is projected that in 2002, music sales all around the world would have been 7.8% higher if there had been no peer-to-peer platforms enabling the illegal sharing of music. By this time, it was already projected that piracy was cutting back the likelihood of music purchased by as much as 30% regardless of the artist, genre, or even country. The fact that litigations by the RIAA in the United States backfired and did not work indicates that the internet has been a tremendous accessory to the act of piracy, which prior to the likes of Napster was virtually unknown as a problem to record sales and consumption of music.

In the age of smartphones and the internet growth rate that has now ensured that over 50% of the world population can access and share music in one form or another, it needs no telling that piracy is higher now than it was at the dawn of the 21st century. In fact, it is so much easier now to share music on the internet that it may be impossible to track how much piracy goes on and the extent to which it impacts the consumption of purchased music (Waldfogel 2012). It is now common to see artists giving music away for free, possible in the hope that building traction and gaining popularity may drive revenues from other forms apart from physical sales. Understandably, the argument by Gheorghe and Soltanisehat (2018), which is summed up in the view that the consumption of music is set to be even more decentralized and to adopt a blockchain format from the 2020s going forward is anchored on projections from these developments. All these findings culminate in the view that piracy has devastated the capacity of both individual artists and corporates to make money from physical sales to the point where the sale of units of music is no longer an attractive or dependable way to monetize music sustainably.

Despite the spirited argument by the music industry that piracy has dramatically reduced sales, arguments have been made that the degree to which piracy is affecting the purchase of records has been hyperbolized. Waldfogel (2012) summarizes this position with a succinct summary of findings on how piracy might affect legal sales of record music thus:

Piracy reduces sales inasmuch as it allows consumers who value products above their price and who would previously have purchased to obtain products without payment. But to the extent that low-valuation consumers engage in piracy, it would not reduce sales and would instead only turn a deadweight loss into consumer surplus (p. 95).

The position in the above quote is that piracy only undermines sales among individuals who have purchased music before who now have access to the content for free. However, it does not affect sales in markets where the music is not valued. Simply put, piracy is viewed to only undermine sales in major markets while having a negligible effect in markets where artists or specific genres of music did poorly. While the full extent of piracy can be indefinitely debated, there is unanimity on the view that the internet has seriously and negatively complicated the publishing sector of the music industry.

Copyright issues. Copyright law has always been a step behind the evolution of music consumption and sharing as driven by the internet. In the United States, for instance, since the advent of online sharing platforms at the turn of the new millennium, The Copyright Act of 1976 has proven to be progressively ineffective as individuals continue to circumvent copyright law on multiple fronts (Bates 2004). In the age of YouTube and song covers, it goes without saying that no degree of the extension of copyright protection seems to present a permanent solution to the evolving mechanisms with which individuals are granting themselves the license to violate copyright laws. In order to demonstrate just how difficult the internet has made it for artists and music businesses to protect their material, it is necessary to explore the “cover phenomenon” whose development can be attributed almost entirely to the digital video platform YouTube.

YouTube covers and Content ID: exemplifying the internet’s copyright shortfalls.  YouTube is arguably the most slippery distribution platform for the music industry as far as copyright constraints go. In 2015, YouTube paid only 4% of industry revenues globally while boasting 1 billion users worldwide; this was by the far the largest number of people on any platform in the world at the time (Alvarez, 2017). As at that time, 82% (820 million) of all YouTube users sought and consumed music on the platform before anything else. It is also important to note that today, YouTube remains the second most visited website in the world after Google (who own YouTube) with roughly 1.7 billion users as of 2020. In being the world’s leading music platform, YouTube’s challenges in protecting the copyrights of musicians have been riddled with problems, a situation that is by far the best demonstration of the shortfalls of the internet when it comes to the protection of the intellection property for musicians.

The large rift between user statistics and revenues on YouTube can be explained by its incapacity to protect musicians’ content and bar individuals from monetizing music that they do not own under the guise of the fair use principle. Despite an elaborate screening feature called “Content ID” that was introduced in 2013 and a slew of other safeguards, YouTube is still largely unable to prevent piracy and unfair use of music. These challenges can be attributed to the Digital Millennium Copyright Act (DMCA) protection of online service providers (OSPs) such as YouTube who “enjoy immunity from liability of copyright infringement” from users if they are unaware of the infringement, act upon the infringement promptly after they learn about it, and do not make any money from the infringement (Bartholomew 2013). It is not unusual, therefore, to see singers who have monetized song covers from established and even small-time artists and continue to make money off their personalized performances without transferring any of the revenue to the original composers. Even in instances where these YouTube covers have been flagged, the content is still out there because YouTube videos can be downloaded, albeit through various unofficial (and illegal) means.

The case of YouTube above demonstrates that in multiple ways, the internet has rendered it virtually impossible for authorities and individuals to enforce copyrights effectively. In a categorical legal analysis of this phenomenon, Ned (2014) argues that copyrights are practically unenforceable today, which is the greatest plight of the music industry in this peer-to-peer (P2P) file-sharing world. The researcher argues that there are no cost-efficient litigation mechanisms against individual infringers and licensing with internet service providers (ISPs) as well as P2P service providers has complicated the process of copyright protection because it is much more difficult to determine who is responsible when an infringement occurs. Ned (2014) argues that a lot of P2P software and platforms fall outside the purview of the law, which makes it difficult to not only hold litigation against such platforms but also develop a law or laws that can stop the practice once and for all. It goes without saying that this is one of the problems that have rendered it virtually impossible for the problem of piracy to be reduced, let alone stopped, even with the constant evolution in identification software and review of existing copyright policy. Ultimately, literature does not seem to have any positive arguments on the future of copyright in the age of internet music. Developments in this domain remain unpredictable and generally negative.

Sales. The one dimension of the music economy that has changed most dramatically, especially at the corporate level, is sales. Between 2004 and 2010, sale dipped by a jaw-dropping 31%. In the last year (2009) of this trend, 29.8 million people shared illegal music across the five largest music markets in Europe. Other statistics indicate that in the United States alone, sales from physical sales dropped from $37 billion in 1999 to $25 million in 2007; a 32% drop in less than a decade (Waldfogel 2012). Despite making 32% of their total revenue from digital sales that early in the 2010s decade (and posting an 8% growth in this form of sales), record labels still performed much more poorly than they had performed in 2004 (Dörr, Wagner, Benlian, & Hess 2013). In 2019, streaming now makes 75% of all revenue in the music industry—the other 25% includes revenues from recording and live performances (Butler 2019). It is evident from these statistics that while the sale of music has been all but taken out of the hands of major record labels, it has also declined sharply, particularly because people do not need to own their own copies of music; it is ever-present on the internet and can be accessed at virtually no cost at all. Because of these developments, the internet has (in roughly 1 decade), eliminate record sales as the main form of revenue generation for both major record labels and the artists on these labels.

By and large, sharing platforms have rendered it unnecessary for consumers to have copies of music, which is easily the biggest reason for the inverse proportion relationship between record sales and the increase in global internet coverage. A simple explanation is provided for this development by an analysis of the impact of YouTube. In an empirical study that involved temporary removal of Warner Music Content in 2009, it was discovered that “albums that have a very successful debut face more displacement from YouTube videos, while the effect on lower debuting albums may be moderated by a promotional effect” (Hiller 2016, p. 16). It follows, from the above observation that YouTube, which gives free access to users, has a more profound effect on popular music and artists than their less successful counterparts. Understandably, the concept of free access, which is strongly linked to piracy as explained above, is the best explanation for this phenomenon. In the figure below, the complex economy of web-based music consumption sheds light on how and why the sale of music has suffered heavily.

Fig 1: The matrix of music consumption services today (Dörr, Wagner, Benlian, & Hess 2013).

All evidence of the development of the music industry after the introduction of the first streaming services (starting with iTunes) in the early 2000s indicate that the above matrix has been the basic form of the post-web distribution structure, with the only change being the increase in the number of agencies in each of the categories within the two bottom rows. It is not surprising, therefore, that as early as 2005, the statistics and structure of music consumption prevailing today had already been predicted (Stevans & Sessions 2005). Apart from the above structure, the value-gap disconnect has been another driver of the wanting sales for music consumed over the internet.

The value gap disconnects subscription and ad-supported sales. The disproportionate return of money to creators and investors in music is worldwide has been a norm for all players within the music industry. It is this unfair return on investment in music that is described as the value gap disconnect (Alvarez 2017). Apart from the physical sales (which are the revenue generation form that has been impacted the most), subscription and ad-supported revenues have also posted non-conventional structures of revenue flow that would not be expected in an industry where free access was not the norm. The schematic below sums up the value gap disconnect for the music industry.

Fig 2: The value gap disconnects. Note that the disproportional relationship between subscription and ad-supported revenue statistics (Alvarez 2017).

In the figure above, the monies generated from subscriptions are dramatically much higher than the number of subscribers. However, the ad-driven revenues are significantly lower than the number of consumers. In fact, if can be argued that for every 1.4 consumers of ad-supported music, there is only 1 dollar being made (Alvarez 2017). This number indicates that the overwhelming majority of consumers of music today would rather access it for free than pay for it. Indeed, these statistics blow large holds in the argument made by Waldfogel (2012) that piracy does not affect sales as much as industry experts claim it does. However, it must also be understood that the internet is not only a technological norm today but also an infrastructural necessity that seems to be affecting all industries. It is incumbent upon players within the music industry to approach record sales and the monetization of music through more complex and novel frameworks because this new paradigm is here to stay.

Chapter 3: Methodology

An abundance of information on the subject under study, particularly secondary research, provides a very firm foundation from which investigations can be launched into the primary questions for this study. Notably, the four primary questions are guiding this study effort are: What are the positive and negative effects of the internet on the musical world?; how has the Internet contributed to music piracy?; do musicians get adequate financial compensation for the music sold over the internet?; and what is the future of music in an increasingly connected world? These four questions cover four different aspects—piracy, compensation for musicians, connectivity and the future of music, and the benefits and demerits of the internet on music. Given the expanse of the combined breadth of four themes, it was most plausible to use an analytical-qualitative approach; field research would have necessitated the collection of large volumes of data, an effort that would have been inhibited significantly by the COVID-19 pandemic.

Research Design and Rationale

The study used a systematic review model, with most of the review of literature being a qualitative synthesis. The subjects of most qualitative syntheses tend to be social concerns (Soilemezi &Linceviciute (2018). As outlined by Fox (2018) technological actors behind the internet’s impact on the music industry only make up half the total force; the others are legislative and social agents. Systematic reviews are generally understood to address subjects around which evidence-based policy practice is or needs to take place. According to Dixon-Woods et al. (2006), systematic reviews avoid the pitfalls of traditional or narrative literature reviews by being more intensive and rigorous and, therefore, more reproducible and updateable (Hammersley 2018). The need for such objectivity in the study was anchored on the need to impartially address the way the internet has touched on all the parties in the music industry without a specific bias for musicians.

Research Paradigm

The study used an interpretive paradigm given the need to capture the subjective encounters of agencies in the music industry and use their collective experience to construct an understanding of the phenomenon being studied. Dean (2018) states that interpretivism approaches problems with the view that they are “subjective, multiple, and socially constructed” (p. 3). The pertinence of this paradigm to the study question is anchored on the fact that the music industry is comprised of multiple parties; each entity has experienced the impact of the internet on the music industry uniquely. A conflation of all these perspectives is necessary if a wholesome picture of the effect of the internet on the creation, distribution, and economics of music is to be painted.

Collection of Data Sources and Materials

Methodological specificity is one of the hallmarks of rationalistic systematic reviews. The point of this defining feature is to ensure that the study method is replicable (Dixon-Woods et al, 2006). As the first step towards methodological soundness, this research had several rules and criteria through which the sources were selected. The steps were essential to a sound appraisal process for all the literature prior to review, an activity that would in turn ensure the review against subpar discourse or inaccurate figures. The protocol for including and excluding sources in the pool of literature and a description of the databases and search terms for the collection process are summed up as follows.

Inclusion and Exclusion Criteria. Table 1 outlines the provisions for the selection or elimination of journal articles, books, videos, subcommittee hearings, and all other research used in the review.

 Table 1: Inclusion and exclusion criteria

Databases and search terms. The collection of peer-reviewed journal articles was conducted on four main websites: ProQuest, JSTOR, Emerald Insight, and Elsevier. In addition to these four primary locations, general searches were made on Google Scholar and Google for freely available, peer-reviewed literature shared on open-access locations on the web. The Directory of Open Access Journals (DOAJ) was also useful in facilitating access to documents and articles that could be downloaded and used freely. In order to facilitate this search, combinations of the following key terms were used: internet, music industry, piracy, streaming, online service providers (OSPs), technology, social media, music, music consumption, copyright, music distribution, music, artists, musicians, DMCA, audience, fans, compensation, and revenue.

Fig 1: PRISMA Diagram for the sourcing of literature and evidence for the systematic review and qualitative synthesis

Ethical Considerations

The study was not limited by a lot of ethical considerations given the use of publicly accessible documents as evidence. As stated by Suri (2020), there is no need for institutional ethics in conducting a systematic review. That being the case, the main ethical consideration for this effort was how the interests of different stakeholders in the music industry are represented. The methodological inclusivity of systematic reviews has, over the past four years, been established as a powerful influencer of policy and practice (Suri 2020). The researcher strived to ensure that musicians (who were the main focus of the study) were represented and their needs dissected well without necessarily villainizing record labels, distributors, OSPs, or policymakers for their alleged incapacity to establish functional legislation to prevent problems such as pi

Chapter 4: Results

The Elimination of Traditional Distribution Channels

There is general consensus in virtually all literature—even the sources that do not echo the major commonalities across current research—that the first and most profound impact of the internet has been a total restructuring of the music supply chain. According to Fox (2005), the internet is not just the main technological driver but also the leading factor for the elimination of what Lewis, Graham, and Hardaker (2005) first defined as the “pre-web supply chain” model of music distribution and consumption. A 1999 interview on BBC’s Newsnight summarizes the views of artists at the turn of the new millennium in the words of David Bowie, whose words not only predicted the future of the music industry in the internet edge but very prophetically painted in the picture of artist-musician relationship—and the elimination of mas(traditional) media in music distribution and consumption. In response to a question from Jeremy Paxman on whether or not the internet is “just a tool” Bowie makes the following statement:

No. It is an “alien life form”. I’m talking about the actual context and the state of the content is going to be so different to anything that we can really envisage at the moment. Where the interplay between the user and the provider will be so in sympatico it’s going to crush our idea of what mediums are all about (BBC Newsnight 2016).

Bowie’s prediction above is essentially the reality of the music industry today. Further evidence of the accuracy of these projections is provided in a 1998 working paper by Janson and Mansell (1998) for the Science Policy Research Unit of the University of Sussex. The scholars predicted that the internet would emerge as sales medium that would offer a convenient shortcut between musicians and their consumers because as of April 1997, 73 of all internet users in the United States had used the web for shopping “in one way or another” (Janson & Mansell 1998, p. 8). The argument from this view was anchored on the fact that music still had the capacity to be sold as a product—that is, in the form of hard CDs—and could, therefore, be retailed online by parties other than major record labels. It is evident that this position was of course justified with the emergence of the music as a service with the first P2P platform.

Increased Outreach and the Democratization of Content Creation

While various literature sources had varied opinions on the impacts of streaming, there was general agreement on the impact that it has had on outreach. The International Federation of the Phonographic Industry (IFPI) (2018) reported that between 2017 and 2018, growth in paid subscription stream rose by 45.5% to reach a total of 176 million users of paid subscription all around the world. The corresponding growth in total global revenue for streaming was 38.4%. The same report quotes Daniel Lieberberg, the Sony Music President for Continental Europe and Africa stating that “There are tremendous creative and technological opportunities in the global market and we are seizing these advantages to develop hits around the world and drive artist development across territories” (IFPI 2018, p. 19). With major companies like Sony acknowledging the role of technology in generating attention for artists, arguments in support of this view may be well founded.

Streaming platforms like Spotify, Deezer, SoundCloud, and so on best demonstrate the capacity of the internet to further artists’ outreach and garner them attention without major record label backing. Armed with the caption “Streaming the future”, Deezer boasts that it plays “837 years of music every day”, a statement clarified with statistics: “In over 180 countries around the world, millions of music fans stream 35 billion of their favorite tracks every year with us” (IFPI 2018, p. 22).  These findings are mirrored by data on album sales in the one and a half decades between 2000 and 2015. In 2000, the physical album sales were 730. The numbers dropped by 50% in 2008 and 2015 to land at 363 and 125 million respectively (VICE News 2017). The decline in physical albums sales is happening against (and is, indeed, the result of) rapid increase in streaming—streaming doubled between 2014 and 2015 and “is now the primary way of music consumption for millennials and younger generations” according to SoundCloud CCO, Stephen Bryan (VICE News 2017). It must be emphasized, however, that the evening of the playing field for established artists and their small counterparts has not resulted in a corresponding change in revenues as discussed in the next section.

The Model of Ownership and Revenue Streams Remain Predominantly the Same

Arguments in favor of the internet as a leveler of the playing field are strongly opposed by the view that at the very core, the internet seems to have failed to change the business model of the music industry, especially when it comes to ownership. A 2016 interview with Kobalt, a digital platform established to give control and the cashflow back to musicians, reveals that even with the entrenchment of P2P sharing and streaming in the industry, record labels, most of which double as distributors, still get a gross majority of music revenues. Speaking to The Economist, the Senior Vice President Creative for Kobalt states that:

We wanted to make everything transparent and open and fair… which doesn’t sound like a big thing but in the music industry that’s quite a revolution. Suddenly, here’s a company that actually gonna tell you what you are earning, helps you earn more money, help you earn your own money quicker, and handle those billions of transactions from billions of different sources and pile them all up and make sure the writer got paid every little, you know… percentage of a cent that they should have been paid (The Economist 2016). The quote above is from a documentary that was published less than five years ago, indicating that the struggle by artists to own their music and maximize their efforts to monetize their music is still an actual fact in the music economy. As of 2016 July, Kobalt had over 8000 artists on its repertoire, including snow patrol, one of the biggest Irish-Scottish rock bands (the economist). while these findings suggest that the concept of democratization of music and artist ownership is illusory, they also suggest that developments in technology are turning these illusions into reality. the take away from Kobalt’s case is an echo of the views by fox (2018) that technology is the leading all changes in the music economy.

Streaming revenues: the status quo remains. In spite of the great platform that streaming and internet platforms provide, all evidence suggests that the structure of income and revenue for artists remains the same. essentially, the biggest artists—that is, the ones with major record label backing—also get the highest volume of streams and, correspondingly, the biggest revenue flows. Verboord and Noord (2016) insist that visibility for major label artist remains far superior to that of independent ones, with the only benefit of the internet being increased attention for artists in their local economies. understandably, the corresponding view on revenue is presented by record executives. in a 2017 vice news interview featuring three industry insiders, the question of how big a song needs to be for an artist to make a significant streaming revenue is made. to this question, Jon Caramanica, music critic for the New York times promptly says “you have to be drake”, suggesting that an artist has to be a powerhouse to make significant revenues on platforms like Spotify (VICE News 2017). further data cements this view. for instance, as of 2017, Googleplay and YouTube (the best and least paying streaming platforms) paid 0.0073 and 0.0003 cents respectively. the statistics indicate that even an appreciable number of streams for an unknown artist (such as 1 million in a year) across multiple platforms may generate a few ten thousand streams at best; these figures are measly given the expenses of making music as a livelihood.

Copyright Challenges and Complications

The blurred lines of online music consumption and ownership make it difficult for the law to navigate all the technicalities of intellectual property infringement emanating from such consumption. It is evident that the scope of the problem is very broad given the development of music as a service and its eclipsing of music as a product according to Dörr, Wagner, and Hess (2013). Streaming and “free” access have facilitated more sharing on P2P platforms to the point where it is difficult to categorically state which forms of sharing or replication are unlawful (Andersen & Frenz, 2010). While focusing on difference case scenarios, most literature generally comes to the conclusion or very strongly implies that the elimination of actors along the pre-web supply chain continuum and the ushering in of the P2P sharing networks pose as a more amorphous landscape within which the rather rigid provisions of copyright law cannot work as they did in the pre-web music market.

Incontrovertible evidence from primary sources suggests a dramatic increase in the complexity of copyright mechanics with the maturation of the internet as an integral element of the music industry at the turn of the new millennium. The problem is specifically pronounced in the United States because of conflicts in copyright law. What Ned (2014) terms as the quandary of “unenforceable copyright laws” for music are addressed in subcommittee hearings on the Digital Millennium Copyright Act (DMCA) from 2001 and 2005. Section 109 of the Copyright Act of 1976 is argued to have been the genesis of the current challenge of copyrighting that continues to bedevil music consumption and mar lines between piracy and the concept of fair use. Notably, Section 109 is the clause of the Copyright Act (1976) upon which the DMCA was founded; it provides the terms of the exclusive distribution and disposal of a copy of music by the owner (Hearing 2001).  In full cognizance of the potential challenges of the internet, the hearing before the Subcommittee on Courts, the Internet, and Intellectual Property of the Committee on the Judiciary House of Representatives came to the recommendation that:

We recommend no change to section 109 at this time. Although no speculative concerns have been raised, there was no convincing evidence of present-day problems. In order to recommend a change in the law, there should a demonstrated need for change that outweighs the negative aspects of the proposal. The Copyright Office does not believe that this is the case with the proposal to expand the scope of section 109 to include digital transmissions… (Hearing 2001, p. 13).

 

Further policy proceedings have revealed that cognizance of the shortfalls of the Copyright Act of 1976 and their ripple effects in the DMCA seemed apparent by 2005, even though action at the time also proved insufficient in handling the situation. The extensive amount of piracy and other copyright issues that occurred after the Hearing Before the Subcommittee on Courts, the Internet, and Intellectual Property of the Committee on the Judiciary House of Representatives on the 8th of March 2005 is evidence of the difficulty experienced by policy-makers in containing the capacity of the internet to cause copyright complications. In his testimony at the hearing, Lawrence Kenswil, President of e-LABs for the Universal Music Group UMG, attested to the complexity of copyright the many digital formats available as of 2005. The second and third paragraphs of the “Licensing Difficulties” subsection of his preparing statement read as follows:

The biggest problem with Section 115 and the whole licensing system that has grown up around it is the enormous transaction costs it entails. In the case of licensing for traditional channels, we have overcome this by building up over decades copyright licensing and royalty accounting departments and information systems to correlate records to musical works and manage publisher splits… Licensing for new technologies and formats is much harder. We should all want to make it easy for a service to launch with a million tracks or for large numbers of physical products to be re-released in new formats. But every new technology is effectively a new configuration for which our whole catalogue needs to be licensed separately all over again (Hearing 2005, p. 17).

 As captured in the excerpts above, at the time of the hearings in both 2001 and 2005, the policy-making machine in the United States had not grasped the full scope and potential detriments of the internet, including its capacity to scatter the order of copy ownership, distribution and possession established in the pre-web supply music chain. Needless to say, extreme piracy is the outcome.

Piracy

Most evidence in literature points to piracy as the main vagary of the internet in the music industry, particularly in the United States—which is the world leader in music production and consumption. According to Snapes and Beaumont-Thomas (2018), roughly one third of all consumers of music were pirates as of October 2018. The data presuppose that one in every three listeners all around the world listens to, distributes, shares, or owns copies of music he/she accessed illegally. Relative to the days of Napster, this number is higher by several hundred percent, almost entirely because of the ease with which music can be shared on the internet (Waldfogel, 2012). Massad (2014) proves that piracy is more likely to occur among artists than the general public. Among artists, piracy as a copyright issue is much more complex to handle in the age of free access and streaming because the lines on format, sharing, and consumption are much more blurred.

A good case in point is YouTube; music on this platform is concomitantly consumed in video and audio formats. Even with so much value, Alvarez (2017) has stated that YouTube paid only 4% of all industry revenues from music in 2015 while still being one of the largest online distributors. The explanation for these unimpressive numbers is the incapacity of YouTube to contain the sharing of music by individuals who are not the owners of the original copy on its own platform. More statistics from Alvarez (2017) reveal an acutely asymmetrical relationship between the numbers of consumers of freely available music on platforms like YouTube and revenues from the music on such platforms, suggesting that the internet has strongly undermined the allure of music as a product. Bartholomew (2013) explains this phenomenon as being a direct result of copyright shortfalls when it comes to legal restrictions on agents like YouTube. Under the DMCA, parties like YouTube are recognized as OSPs, which automatically affords them immunity from any form of legal action regarding copyright infringement for the content they host.

 Chapter 5: Discussion

The cases made for and against the internet’s role in music are generally very strong. The driving arguments on either side of the debate provide not just compelling evidence but also have real-life and real-time examples of the merits and the demerits of the entrenchment of the internet into the production-consumption dynamics of the music economy. All in all, there are two main themes on the subject: one addresses the economics and the other the production and distribution of music—or the nature of musicianship in the age of global connectivity. Generally, both overarching themes demonstrate that the advantages and shortfalls of the internet as an integral element of the music industry today are somewhat balanced. The takeaway from a careful consideration of both major positions is the conclusion that the internet has made it much easier for musicians all over the world to be heard and to showcase their talent, yet the economic challenges and barriers to livelihood for independent musicians largely remain; the pre-web business model has simply shifted onto the internet as best demonstrated in the mediocre revenues that artists get from streaming unless they have major label backing and are A-list superstars.

The Impacts of the Internet on Music Industry Economics

There is very little evidence levelled against the view that the internet did not improve the economics of the music industry for the artist. Evidence from the small struggles of companies like Kobalt and the views of industry insiders provide almost unassailable proof of the fact that the same business model that existed before streaming and OSPs took over has simply been transferred onto the internet (The Economist 2016; VICE News 2017). Even without the overwhelming evidence from some of the interviews quoted in the results section above, secondary research on the matter much earlier—and this is cited early in the review of literature—was already emphatic on the fact that the visibility facilitated by the internet for small-time artists was drastically disproportionate to their financial gains from online platforms (Verboord & Noord 2016). It is not surprising, therefore, that Alvarez’s (2017) statistics reveal a very lopsided relationship between the number of people listening to free, ad-supported music—which is the natural option for independent artists—and those consuming music on subscription basis. Ultimately, it is clear that the internet has done little, if nothing at all, to eliminate the unfair influence of record labels on the economics of music.

All secondary research literature and primary data as captured in the experiences of artists/record executives suggest that the internet has given musicians very little power to monetize their music. In fact, for the most part, the internet has only managed to transform music from being sold as a “product”—that is, physical sales of CDs and vinyl—to being sold as a “service” in the form of streaming (Butler 2019). By and large, this change did not level the financial playing field for independent musicians. In response to this development, record labels simply transferred their distribution mechanisms onto OSPs and continued to monetize artists’ skills while still using their capacity to generate and sustain star power as a means to determine which artist made the most revenue off internet sales (VICE News 2017). In the end, star power, which is created or undone by the major corporations of the music industry, remains the first and most significant aspect of how well an artist performs in the economic dimension of the music industry.

The Impacts of the Internet on Musicianship as a Personal and Social Creative Process

It is within this dimension—and only this dimension—that significant advantages of the internet manifest. The independence to create and share one’s music is very real on the internet, hence the common view that artists and their fans “come together” on the internet (Sen 2010). With the social, cultural, and psychological distance between the artist and the consumer of his/her music reduced to the point of negligibility, the creation of music has become more enriching for musicians because it is no longer a solo endeavor. As a matter of fact, Diane (2016) has described it as a collective creative process. Evidence for this position lies in the fact that artists are now able to have feedback on their music from their fans through direct engagement on social media. In this manner, OSPs become a connective medium between creators and consumers, eliminating the capacity of major labels and outlets to control the artists and expressive nature of music—it must be emphasized that music industry corporations view music as a product and service only, and control artists’ output purely on the basis of which music are commercially viable.

An argument within the broader perspective of this theme is that artists do not need to be stellar and achieve “celebrity” status to actually have a sizeable audience and establish a community of consumers. Testament to the view is the SoundCloud rap phenomenon; a number of successful careers have used SoundCloud, a free streaming platform, as the foundation (Teffer 2018). The accuracy of this argument cannot be held in doubt, and it is true that building fellowship on streaming platforms is an integral element of the marketing dynamics for artists of the streaming age. However, keeping in mind the fact that all artists seek some form of financial reward from making music—indeed, most artist strive to make a livelihood from their music—the fact that online musician communities do not necessarily transform into a healthy revenue stream is one of the flaws of the internet is explained in the subsection above.

Copyright Challenges: A Bleaker Future

The above merits notwithstanding, the internet seems to have exacerbated the problems of piracy and copyrights, and the trend has not improved in the past two decades since the peer-to-peer sharing of music started. The fact that roughly one in every three consumers of music is in possession of or accessing pirated music is unassailable evidence for this argument (Snapes & Beaumont-Thomas 2018). Given the fact that the DMCA and a slew of other copyright legislations have been two decades in the making, it is justified to argue that the law is still a long way from protecting copyrights well enough to eliminated internet-based intellectual property rights infringement. The fact that most OSPs are immune to litigation on the basis of piracy and copyright violation in most countries in the world is set to make the challenge a long-standing problem (at the very least), with projections being that the line between fair use and copyright will continue to blur even as piracy worsens with the increase in global internet coverage.

Chapter 6: Conclusion

The benefits of the internet to the music industry are evident, but it appears that the demerits of the internet have more real-life and livelihood implications to artists when compared to its advantages. In spite of the growing capacity of the internet to earn artists local, regional, and even international repute for free, the problem of corporate cannibalism remains a very real challenge for musicians. The pre-web business model continues to control the dynamics of revenue flow in the music economy, albeit in a different form. Even with the greatly reduced distance between the artists and their fans and the statistically evident increase in the volume of subscribers on streaming platforms, being on a major record label remains the best way for artists to make a decent living through their music. Indeed, many researchers argue that it is almost impossible to sustainably make a living from music without “star” status; this was a fact before the internet and continues to be one two decades after the internet allegedly upset the pre-web structure of the music economy.

An objective review of developments in the industry since Napster launched in 1999 reveals that only the creative process and the relationship between the musicians and the artists has really improved; everything else has remained the same. When legislative and economic considerations are given an even keener focus, it appears that the internet may have made things worse than good in most regards. The increase in piracy, the increasing shortfalls in copyright protection for music and greater access to free music for fans continue to exist against a stunted capacity for musicians to monetize their art, which ultimately means that artists have very benefits even though they are the mainstay of the industry. From the corporation’s point of view, the demerits of the internet have been somewhat negative, but the corporates are still in control and little, if nothing at all, has been lost. Furthermore, the grimmest reality of this situation is that the internet is now an integral element of not just work and industry today, but 21st century life as we know it; it would be grossly impractical to image a future of the music industry where most things do not go through the internet. It is, therefore, incumbent upon musicians to come up with ways to circumvent the vagaries of the internet and improve their personal economy in the music indus

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