The Music Industry

The music business has faced a number of challenges in recent years. The effect the internet would have on the music business was completely underestimated by record companies and music publishers. They were taken unaware by the impact that file sharing websites such as Napster and The Pirate Bay would have on their business.

In the past few years cd sales have declined sharply. People regard them as being expensive and out of date. Many bands now make more money from touring then they do from cd sales.

The internet has had a huge effect on the music business in recent years both positive and negative. Positive effects that the internet has had are that it has created a cheap and efficient way of selling music-downloading MP3 files straight from the internet e.g. I Tunes. The internet has also reduced advertising costs and created closer relationships between bands and their fans. The negative impact of the internet has mostly to do with piracy and file-sharing websites. Within hours of a new cd being released it has been copied and is available for illegal download on the internet. This obviously costs record companies a huge amount of money in lost sales.

The music industry needs to adapt to changing circumstances. If it can change its business model to take advantage of new technology and deal with the problems of piracy then it will remain profitable.