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Challenges Facing the Music Industry

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Challenges facing the Music Industry

As Albert Moran puts it, “film is an economic commodity as well as a cultural good” (Albert Moran, 1996) and therefore, the struggle to dominate the market for films and music has continued for such a long time. These cultural products because of the industrial processes they follow of production, distribution and consumption fall into the category of an industry and are immensely affected by the forces of the market. Distribution is the key factor in determining who would rule the industry as it forms the link between the production of the media goods and their exposure to the target audience.
Over the years the cultural industry has evolved imbibing newer technologies and making space for newer companies to make their mark. This process of evolution has been intercepted with changes in its economic and sociological structure owing to the external economic, social and political factors and also technological advancements. Ownership of the media forces to a great extent amounts to a huge control over the global economy and also means greater political and cultural power. Hesmondhalgh, in his book, The Cultural Industries, points out that there has been an "interweaving of change and continuity" in the cultural industry since the 1970s (Hesmondhalgh, 2007). However, this hasn’t ever been a smooth process for the older and established companies who had to face challenges from the new market players. The music industry had to grow from the sheet music days to the ipod culture. Also, with the music composer having direct access to the consumers via the internet, the existence of the music companies seems endangered. Same fate befalls the film industry where the established names are getting haunted by the emergence of newer distribution ways and the advent of small scale innovative filmmakers and distributors into the field of entertainment.

Cinema came into being in the late nineteenth century with the efforts of the Lumiere Brothers from France. Ever since then, there hasn’t been any looking back for the motion pictures. Multiple reel films too made an early entry in the United States in 1907 and the start of the First World War saw collaborations between feature films and the distributors to suit the immense cost of production of the multiple reel films (Britannica). From the early days of single reel films to the 3D era to the current age of digital cinema and sound, the entertainment industry has come a long way. In order to prevent the audience from letting television jeopardize their cinema going, the multiplex culture was encouraged where the consumer had more choices. The distribution system has gotten revolutionized with satellite projections, DVDs and optical fibers. No longer is the Hollywood the locus of the cinema world as alternate forms of entertainment catch the attention of the much sought after consumer. But this transformation has faced objections from those who had the upper edge. The American firms have had dominated the entertainment industry for most of the twentieth Century. Their music and blockbusters have been the market mobilizing factors even in the international scenario, so much so that the other regional industries have imitated their style and content despite being extremely critical of the same. But the monopoly of America now faces threat from the new rivals who are banking on the new age technologies, globalization, and consumer oriented products. There is now an intermixing of geographies, economies, politics and technologies that is defining the struggle for control over the international cultural sphere.
Globalization: The Americans have been the silver screen giant for so long that even with the other international Cinemas gaining ground, it is being seen by many as just another extension of the Hollywood with its huge influence on the media production as well as its distribution and consumption. Audiences across the globe find America films and music captivating and hence, the initial challenge for the other countries was luring their audiences back. Globalization occurred in the entertainment sector as a result of the fast evolving international global economic and political scenario. The process got further accelerated with the technological advancements in the field. The new globalised world is bringing in competition for the Hollywood. Countries like India and China have flourishing film and music industries that are creating ripples in the international market. They churn out more number of films and music albums in a year than the American industry. China hit the screen hard with its blockbuster “Crouching Tiger, Hidden Dragon” that fetched more than $100 million just in America creating a history in itself (Tom Plate, 2002). Even countries like Korea, Singapore and Iran are becoming part of the artistic genre of cinema. Iranian films like “Children of Heaven” and “Baran” have gained acclaims in the Cinema circle with their diverse style and indigenous subjects. They are bagging awards at the various ceremonies and also attracting a huge section of audiences. The new wave is compelling Hollywood to retrospect on its own subject areas and their treatment and in devising newer techniques to keep their position as global leader intact. This has led to the cultural colonialists in merging together across international boundaries starting with the late 80s and early 90s where the trend of motion picture studios collaborating with or taking over theatres gave way to more horizontal mergers. The major film distributors started coming together along with the producers to keep the reign of the international markets in their own hands. One of the earliest but powerful mergers was the acquisition of the 20th Century Fox by the Australian firm, News Corp in 1985. Rupert Murdoch sensationalized the international media industry with the emergence of Fox Broadcasting. He went on to buy shares in the British Sky Broadcasting and in Star TV, Asia’s first satellite TV network (Stevenson, 1994). There were further alliances within the United States to bring in more products into the market and also to divide out the financial risks that the production of high budget films posed. Disney bought films produced by Miramax in lieu of financial support to its production processes. Collaborations like those between Disney and ABC Capital Cities, Turner and Time Warner and Sony and Columbia etc. Trans-nationalism has been the most impacting outcome of the struggle for hegemony in the media sector, resulting in cross nation distribution of films and music.

New technologies: Cinema has been the witness to technological advancements being both bane and boon to its growth. With the coming in of home videos and satellite transmissions, the theatres suffered a major setback and many exhibiting firms were forced to shut down as a result. Another outcome of the growing digital technology was the amalgamation of the new media with the old like the coming together of CBS and Viacom (Levi, 2000). There is hybridization of different distribution spheres owing to the means that digitalization has provided. Hence a local filmmaker doesn’t need a big distributor or huge finances to get his work exhibited on a global basis. Internet and CD-ROMs etc have provided the small scale units a platform to showcase and distribute the media products. Janet Wasko too propagates this synergy of industries using the new technologies as means of distribution for allowing the independent and local producers to enter the international market (Wasko, 1994). Anyone with a definite knowledge and technical skills with a modest budget can make a remarkable film and distribute it to its target audience without bringing in the middlemen. The dissemination of the information and communication technology has also decentralized the communication network. Music too has become a tool for revenue generation in the media market. It has grown to become a fast growing multi billion industry looking ahead to further progression challenging even the film industry with its potential. The music industry owes its growth to primarily the technological advancements that changed its face over the last 50 years. Music distribution underwent a revolution with the invention of cassettes in the 1960s. Unlike films, music soon became a mobile entertainment product with the invention of radio and then the introduction of Walkman later in the 80s. A completely unique experience was in store for the music lovers when musical tracks were converted to digital bits and bytes on to the compact disc and these discs became accessible to the masses. America became the largest music market in the world in the early twentieth century based on these technological innovations with a growth of around 60 percent. (Tung Q. Nguyen-Khac, 2003). In the last few years, digitalization has brought in newer and better possible means of transmission and distribution hence, pulling out the control of the industry from America to a more diversified market. The new distribution capabilities provided by the advanced information technologies both challenge and provide opportunities to the conventional film and music distributors. The internet can be used as a portal for distribution but the control over the content is jeopardized in the cyber space. These technologies are powerful enough to alter the political economy of the international entertainment industry by bringing in newer players and enable them to gain control. However, the old media authorities claim that the hold over the media industry in the coming days will probably still lie with the old Media Moguls (Golding and Murdoch, 1996). They reason their arguments on the basis of the ownership of products and services and their production techniques that form the locus to the popular culture, and also boast of their growth through additional alliances and mergers.

Consumer Oriented Products: Post 1955 a sudden emergence of pop music rocked the music industry in the United States. It gained so much popularity that was tagged as a culture in itself and record companies had to recognize the fact that for them to survive in the market, they had to offer the public what they wanted failing which the newer rivals would take lead (Wilfred Dolfsma, 1999). Even the de-regularization process has been aimed at diversification of ownership and increase of consumer’s control over media content. However, it has largely back fired with the further commercialization of the major media corporations. This commercialization process is interlaced with digital advancements in technologies. A result of the corporate behaviour and technological innovations has been the large scale media conglomeratization (Amelia H. Arsenault & Manuel Castells, 2008).

Consolidation or Mergers as Solution: The divergent market players are now operating in an international sphere that is defined by the processes of hybridization and convergence and are looking to dominate this sphere by using further collaborative strategies and alliances to harvest profit using the newer digital information and communication technologies and in the process, also exploiting the concept of e-commerce. However, the growing mergers have led to many unforeseen and unprecedented effects that are causing the dividing lines between production, distribution and consumption processes to diminish. Also, with no segregation between the sector and the market, the different sectors are themselves overlapping with more alliances shaping up and paving way for more technological developments so as to remain stable in the ever changing media market. Established entertainment companies have to devise out new business plans and propositions in order to formulate ways to survive in this new technologically charged set up. It is easier for the newer players to start with the technologies at their service and with a better understanding of the consumer’s demands unlike the older ones who will have to shed their methods and strategies to adapt to the new setup and also re-recognize its consumer’s behavioral pattern in the digital era. To continue with their hegemony, many of the international film and music companies worked with the strategy of combining together their own forces or utilizing the synergies of technologies. According to Paul Rutten, the American entertainment industry looks at the concept of synergy as the exploitation of the same entertainment notion through varied channels (Rutten, 2001). The hegemony of production firms that cut across the boundaries of different entertainment sectors in conjugation with the control over the various means of distribution act as the salvation for a those in power who find their own ideologies conflicting with the concept of synergy. Therefore for these conventionally run companies, the control over the market can be achieved by managing multiple domains of entertainment independently. However, that task becomes rather difficult to accomplish with the technical, managerial as well as financial strength it calls for. The answer then is definitely in greater consolidations and collaborations for bringing the consumer the products he or she desires. That is why new economy is benchmarked by such alliances and ventures between corporate giants like AOL and Time Warner.

Impact on the Consumer: When CBS and Viacom merger took place, the question that concerned everyone at large was whether it would lead to the concentration of too much power in the hands of few big market players and also if it would threaten the participation of diversified population in the specific media market segments. Such large scale mergers also looked as a threat to the entry of independent and small scale filmmakers and music composers into the production sector, to the access to the distribution system for these producers and also to the variety that products from diversified companies could offer (David Waterman, 2000). Also an important issue that precedes any merger is that of the right to privacy of the consumer. For example, in the coming together of the AOL and the Time Warner groups, the users of AOL have their web history tracked with the company and also those subscribed to Time Warner. This overlap of information might leak details on to the cyberspace that the consumer wants to hold back (McCarthy, 2000).

A unique trend that is being observed owing to the advent of new players challenging the established media empires is the globalization in the field of production and capital generation, however, the content is getting extremely localized focusing on smaller sets of target audiences. They are designed to cater to specific cultures and to the multiplicity of the target audiences making globalization and diversification go hand in hand. The resources and capital required for mass production of films and music can only be provided by economically stable global networks. But the market segmentation and revenue generation is largely governed by how much appeal they hold for the local and regional audiences as well as the use of the more localized distribution channels. These globalized networks utilize the advantages offered by the new digital technologies to connect with the masses.

Albert Moran, 1996, Film policy, Institute for Cultural Policy Studies (Mankato, Minn.), Routledge
Amelia H. Arsenault & Manuel Castells, 2008, The Structure and Dynamics of Global Multi-Media Business Networks, International Journal of Communication, Vol. 2
David Waterman, 2000, CBS-Viacom and the Effects of Media Mergers: An Economic Perspective
Dolfsma, Wilfred, 1999, The Consumption of Music and the Expression of Values: A Social Economic Explanation for the Advent of Pop Music, The American Journal of Economics and Sociology
Golding, P. & Murdoch, G., 1996, Culture, Communications and Political Economy, in Curran, J. & Gurevitch, M., 1996, Mass Media and Society, London: Arnold
Hesmondhalgh, D., 2007, The Cultural Industries (2nd Edition). London: Sage.
History of the Motion Picture, Encyclopedia Britannica
Levi, Lili, 2000, Reflections on the FCC'S Recent Approach to Structural Regulation of the Electronic Mass Media, Federal Communications Law Journal
McCarthy, 2000, Pitfalls of Media Mega-Mergers, America: The National Catholic Weekly
Paul Rutten, 2001, Dynamics in Cultural Industries: Markets, Strategies and Policies, TNO Strategy, Technology and Policy, Faculty for History and Arts, Erasmus University Rotterdam
Ray Zone , 2001, Cinema's evolution, Hollywood Reporter
Tom Plate, 2002, Hollywood Faces New Competition: World Film Industry Is Globalization at Its Best, Burkle Center for International Relations
Tore Slaatta, 1999, Media and Politics, Dissertation lecture, Oslo University
Tung Q. Nguyen-Khac, 2003, The Music Industry in a Dilemma: How New Technologies can Turn an Industry Upside Down, Research Paper for the ITS Conference, Helsinki

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