The Future of the Classical Music Industry

The traditional music industry business model was one based around the control of publishing rights, maintaining promotional power and controlling distribution. In this model, the ‘big 5’ recording labels (EMI, Sony, Universal-Vivendi, Time Warner and Bertelsmann BMG) had around an 80% share of the global music market and were indispensible to artists and composers. With the emergence of the internet came other methods of music consumption such as online purchases, person to person file sharing and illegal downloads which have had immense repercussions for record labels. When faced with a new digital landscape, the fundamental ideals of the recorded music industry began to change.

I am writing a dissertation which investigates not only how these changes are affecting business models and strategy in the music industry as a whole, but more specifically how the classical recorded music industry is, and should be, responding and adapting.

How can a classical music label manage for the 21st century marketplace?

There are a number of findings which have arisen from my work so far, many of which require further exploration. For example, the power in the industry is moving towards artists and customers as labels are losing control over distribution channels and a more complex and flexible value chain and structure creates a need for co-creation and a more consumer centered business model. What needs to be explored further is to what extend this applies to classical music, given the different nature of the music and the unique relationship between composer, performer, conductor, label etc.

The importance of online forums and engagement with clients is proven to be highly important in order to create a consumer driven environment which the industry is calling for. I have also found, through academic research and industry discussion, that in an attempt to discourage illegal downloads of music, more stringent legislation on music copyright and ownership can actually inhibit the legal sales of music.

In terms of proposed models for the future of the recorded music industry, two key models surfaced as possible solutions. The first was the idea of ‘servitisation’ (the act of turning a product driven business into a service – think Spotify). The second was the idea of offering choice pricing to the consumer via an online store – a technique proven to work for one online classical music website.

I am now undertaking primary research in order to elaborate on and validate these findings in the context of the classical music business before applying the results to a specific case. The aim of this research is to understand how classical musicians engage with and consume classical music online and offline in order to ultimately advise a small classical record label on how they can manage their own business to thrive in this changing landscape.

Please join in with the research and complete the survey here and share your thoughts on this many faceted discussion below – I’ll write a follow up post to share my findings with the HELLO STAGE community when the dissertation is complete. www.tinyurl.com/classicalmusicsurveyEN
Author: Chiara Beebe / edited by Nina HELLO STAGE
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