Abstract
At the beginning of the 1980s, a period of stagnation set in. In 1980, 1981, and 1982, the U.S. record companies had no sales growth. 1983 saw a small increase of 6%, which was followed by a more significant increase of 15% in the following year. Sales remained more or less constant at this level for the next 2 years. In 1987, however, another jump in sales occurred (+20%). Subsequent years witnessed additional increases of 12% (1988), 3% (1989), and 17% (1990).
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Notes
- 1.
In Europe, the most important national markets diminished between 1979 and 1980: Italy −11.8%, Great Britain −8.9%, Federal Republic of Germany −1.6%, and France −0.3% (see Gronow and Saunio 1998, p. 137).
- 2.
I am thinking here especially of the World Intellectual Property Organization's (WIPO) "Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms," which passed on October 29, 1971, and the "U.S.-Copyright Act" of 1976.
- 3.
"These problems arose as a result of the company's failure to invest in the development of new artists, and its ability to cope with changing patterns of competition" (Martland 1997, p. 254).
- 4.
The goal was to extend the cooperation into merging the phonographic activities of both companies. However, in 1985 German and U.S. antitrust commissions did not allow the merger in order to avoid the creation of a monopoly in the music industry (Sanjek and Sanjek 1991, pp. 253–255).
- 5.
In 1979, MCA had taken over ABC-Dunhill, thus further contributing to the market concentration.
- 6.
The credit card company American Express also participated in the founding of WASEC.
- 7.
Before MTV, music videos were used solely as promotional instruments. The Beatles' "Penny Lane" and "Strawberry Fields" were the first film clips produced for BBC. The first music video was made by Queen in order to promote their single "Bohemian Rhapsody."
- 8.
Initially, CNN founder Ted Turner operated VH-1 as a competitor channel to MTV. When the losses did not decrease, however, VH-1 was sold to MTV.
- 9.
Hip-Hop denotes a socio-cultural movement that includes graffiti art, break-dance, as well as DJ music, in addition to a music style that combines DJ improvisations with Rap.
- 10.
Early pioneers of Hip-Hop, the so-called "old school," include DJs such as Grandmaster Flash, Kool DJ Herc, Afrika Bambaataa, and Grand Wizard Theodore. Sampling would later replace this turntable technique.
- 11.
Initially, they especially used rare Jazz, Soul, and Funk records, but later they also used well-known records from all genres.
- 12.
MC is the acronym for "Masters of Ceremonies."
- 13.
The first Rap recording is usually considered to be "King Tim III" by the Fatback Band, which had already enjoyed success on the R&B market with Funk titles.
- 14.
However, "Raising Hell" was released on Profile, not on Def Jam.
- 15.
See http://tommyboy.materialinmotion.com/customer/home.php?mode=the_story (Accessed 11/7/2002).
- 16.
The exception is PolyGram's sub-label Mercury, which had already signed Kurtis Blow in 1979.
- 17.
See also Dufresne (1992, pp. 179–185).
- 18.
N.W.A. stands for "Niggers With Attitude."
- 19.
After Dr. Dre left Ruthless Records in 1992 due to disagreements about the label's business practices, he founded Death Row Records together with Marion "Suge" Knight. Disagreements with Knight and the imprisonment of Gangsta Rap per Snoop Dog, whom Dr. Dre had discovered, led him to sell his shares once again. With the help of Interscope, he founded Aftermath, which MCA eventually took over together with Interscope.
- 20.
We can prove this with the example of Jive, which is fully owned by Zomba Music Group, of which Bertelsmann owns a 20% share. After Jive had grown big with Hip-Hop acts such as Kool Moe Dee, Boogie Down Production, KRS-One, DJ Jazzy Jeff & the Fresh Prince, in later years, it enjoyed significant commercial successes with teenage Pop acts such as Britney Spears and the Backstreet Boys. During the summer of 2002, rumors had it that Hip-Hop and Rap acts were supposed to be let go for the new Pop acts.
- 21.
Weinstein (1994, pp. 186–187) already concluded in the context of Heavy Metal's commercialization: "The major record companies shifted the risk of funding and developing new metal artists to the indies. When that talent proved itself, the majors moved in, ready to skim off the cream with fat contracts."
- 22.
We should also mention Will Smith, who has been under contract with Columbia/Sony since his success as an actor as well as the Pop Rappers Salt ‘N’ Pepa, who are supervised by Universal's subsidiary, London.
- 23.
The real growth worldwide (based on US$) was 2% in 1996, 0% in 1997, 2% in 1998, and in 0% in 1999. Record sales even declined by 1% in 1998.
- 24.
In 1977, RCA began a joint venture with the Japanese Victor. In 1983, it bought 50% of the Bertelsmann subsidiary Arista.
- 25.
In 1989, BMG bought Miller International, which it then affiliated with Ariola. It also acquired Conifer Records, BNA Records, Logic Records, and the Zomba Record Group (with Jive, Verità, Reunion, Silverstone, Brentwood). In 2000, it entered a joint venture with the former CEO of CBS-Columbia and founder of J Records, Clive Davis.
- 26.
Until then, Warner Communications had merely acquired the relatively unimportant twentieth century Fox label in 1982.
- 27.
At the end of 2001, Vivendi sold Seagram's distillation segment to Diageo and Pernod for $8.1 billion.
- 28.
See Billboard.biz, "It's Official: Access Industries to Acquire Warner Music Group for $3.3 Billion", May 6, 2011 (retrieved 2011-05-06).
- 29.
See Heise Online, "Terra Firma or Übernahme des Musikkonzerns EMI", August 1, 2007 (retrieved 2010-02-19).
- 30.
See Financial Times, "Citigroup Takes EMI from Hands", February 1, 2011 (retrieved 2011-02-04).
- 31.
See Billboard.biz, "EMI Publishing Goes to Sony, Label to Universal", November 11, 2011 (retrieved 2011-11-14).
- 32.
If we consider only physical music sales, the decrease would be 55.8% between 1999 and 2010.
- 33.
At the end of the 1980s, a research team from the Institut für Integrierte Schaltungen (IIS) of the Frauenhofer-Institut in Erlangen, Germany, developed MP3 as a method for compressing digital audio signals for movies. Since the results were unsatisfying, the scientists from Erlangen made MP3 publicly available on the Internet. In a very short time period, MP3 spread as the dominant format for compressing music and by now has become the standard technology on the Internet.
- 34.
For the history of Napster see Menn (2003).
- 35.
A&M Records Inc. at al v. Napster Inc., U.S. District Court Northern District of California, case no. C 99-5183-MHP, December 6, 1999.
- 36.
Metallica went so far that the band’s drummer and spokesman, Lars Ulrich, personally appeared in company with the band’s lawyer at Napster’s headquarter. They handed over a list of hundred thousands of users, who had shared Metallica songs via Napster in order to prompt Napster to block the users’ IP addresses.
- 37.
KaZaA was owned by Sharman Networks and Morpheus was owned by MusicCity, which later was renamed StreamCast Networks.
- 38.
Metro-Goldwyn-Mayer Studios et al. v. Grokster, Ltd. et al., case no. 259 F. Supp. 2nd 1029(C. D. Cal. 2003). However, a Court of Appeals upheld the decision of second liability and remanded the case again to the lower court. (MGM Studios v. Grokster, Ltd., 380 F.3d (9th Cir. 2004).
- 39.
Capitol Records America (initially Virgin Records v. Jammie Thomas, civil file no. 06-CV-1497. The verdict of the first trial was vacated due to the court's conclusion it had erred in its jury instructions. In a second trial a judge reduced the award to US$ 54,000. Since Thomas declined RIAA’s offer to settle the case for US$ 25,000, she was found liable for US$ 1.5 million in a third trial in November 2010. Jammie Thomas appealed against this verdict as unconstitutionally high. In July 2011, a District Court judge again reduced the award to US$ 54,000. However, the case is still pending.
- 40.
Sony-BMG Music Entertainment et al. v. Joel Tenenbaum, civil action no. 07cv11446-NG. A year later, a judge reduced the award to US$ 67,500. However, the Appeals Court reinstated the US$ 675,000 award against Tenenbaum in September 2011.
- 41.
See Wall Street Journal, "Music Industry to Abandon Mass Suits", December 19, 2008 (retrieved 2008-12-19).
- 42.
Billboard.biz, "Three-Strikes Arrives In France", September 23, 2010 (retrieved 2010-09-23).
- 43.
Billboard.biz, "MPs Vote For U.K. Digital Economy Bill", April 8, 2010 (retrieved 2010-04-09).
- 44.
BitTorrent is one of the most common protocols for transferring large files, which was programmed by Bram Cohen in April 2001 It is now maintained by Cohen's company BitTorrent, Inc. There are numerous BitTorrent clients available for a variety of computing platforms. It has been estimated that it accounted for roughly 43% (in North Africa) to 70% (in Eastern Europe) of all Internet traffic in 2009 (Schulze and Mochalski 2009, p. 2).
- 45.
Sony Music Entertainment (Schweden) AB v. Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde, and Carl Lundström, case no. B 13301-06, judgement of the Stockholms Tingsrätt, April 17, 2009.
- 46.
BREIN v. Mininova B.V., case no. 250077 HA ZA 08-1124, judgement of the Rechtbank Utrecht, June 2, 2009.
- 47.
Arista Records et al. v. Lime Group LLC et al., case no. 06 CV 5936 (KMW), opinion and order of the U.S. District Court, Southern District of New York, October 3, 2011.
- 48.
Capelight Pictures v. RapidShare AG, case no. I-20 U 166/09 and I-20 U 8/10, judgement of the Oberlandesgericht Düsseldorf, July 22, 2010.
- 49.
"German Court Upholds Fines Against Rapidshare For Violating Injunction", press release of Bedford, Freeman and Worth Publishing Group LLC, Cengage Learning Inc., Elsevier Inc, John Wiley & Sons Inc., The McGraw-Hill Companies Inc., and Pearson Education Inc., December 1, 2010 (retrieved 2010-12-06).
- 50.
The sampling hypothesis argues that file sharing lowers sampling costs and, thus, more consumers become familiar with heretofore unknown music/artists. Hence, more consumers buy music from legitimate sources.
- 51.
Billboard.biz, "eMusic Adds EMI Catalog—Store Now Has All Four Majors", May 19, 2011 (retrieved 2011-05-19).
- 52.
The iTunes media player computer program is based on SoundJam MP software, which was purchased in 2000 for its developers, who moved to Apple as software engineers (see http://panic.com/extras/audionstory/popup-sjstory.html). ITunes initially was solely used by Apple users, before the iTunes Music Store was lanuched.
- 53.
In most of the important music markets, the iTunes Music Store was launched in 2004. However, in most the Eastern European countries and in Latin America (except Mexico) iTunes was not available until fall 2011.
- 54.
In June 2009—5 years after the launch of the iTunes store—Apple celebrated passing five billion downloads. Just 20 months later—February 2010—10 billion downloads were sold (see Billboard.biz, "iTunes Reaches 10 Billion Milestone", February 25, 2010 (retrieved 2010-02-25)).
- 55.
YouTube initially was created by three former PayPal employees—Chad Hurley, Steve Chen and Jawed Karim—in February 2005.
- 56.
Billboard.biz, "Google Music Launch Unveils a Solid Competitor to Apple, Amazon, Spotify" , November 16, 2011 (retrieved 2011-11-17).
- 57.
On March 28, 2011 Amazon.com launched its music cloud service Amazon Cloud Drive; Google followed in May 10, 2011 with Music Beta, and finally Apple introduced its iCloud on June 6, 2011. (see Associated Press, "Apple's iCloud Could Finally Make Music Pirates Pay", June 7, 2011 (retrieved 2011-06-07)).
- 58.
Capitol Records et al. v. MP3tunes, LLC and Michael Robertson, civil action no. 07-CIV-9931, November 9, 2007. The case is still pending in December 2011.
- 59.
MusicAlly, "Last.fm reveals £2.84 m loss for 2009", March 12, 2010 (retrieved 2010-12-6) and Music Ally, "we7 reveals £3.66m loss for 2009", October 5, 2010 (retrieved 2010-11-23).
- 60.
Billboard.biz, "Spotify's Big Losses in 2010 Are Evidence Freemium Models Need Time to Grow", October 10, 2011 (retrieved 2011-10-10).
- 61.
Press release of News Corporation, "News Corporation to Acquire Intermix Media, Inc.", July 18, 2005 (retrieved 2011-12-30).
- 62.
Wall Street Journal, "News Corp. Sells Myspace for a Song", June 30, 2011 (retrieved 2011-07-01).
- 63.
Billboard.biz, "Spotify Usage Explodes After F8, Facebook Integration", September 30, 2011, (retrieved 2011-10-04).
- 64.
Billboard.biz, "Simfy Launches Facebook Music Player Before Spotify Does", June 1, 2011 (retrieved 2011-06-02).
- 65.
evolver.fm, "MOG Grows Fastest Among Facebook's On-Demand Music Apps", November 4, 2011 (retrieved 2011-11-04).
- 66.
Press release Starbucks, "Starbucks Launches Hear Music Record Label", March 12, 2007 (retrieved 2011-12-30).
- 67.
Press release Starbucks, "Starbucks Refines Its Entertainment Strategy", April 24, 2008 (retrieved 2011-12-30).
- 68.
It was not Live Nation, but EMI that signed a US$ 160 million unified rights deal with Robbie Williams in 2002 including all income streams from his recordings, publishing activities, and performances.
- 69.
Since Live Nation did not want to become a record label, it stopped signing new 360° deals since fall 2008 (Budnick and Baron 2011, p. 312).
- 70.
Billboard.biz, "Live Nation, Universal Music Group Launch Partnership: Management, Ticketing, More", September 19, 2011 (retrieved 2011-09-22).
- 71.
For a detailed description see Vogt (2011).
- 72.
Billboard.biz, "The Beat Generation: Electronic Dance Music Is Rapidly Becoming The New Sound Of Young America", December 8, 2011 (retrieved 2011-12-08).
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Tschmuck, P. (2012). The Digital Music Revolution. In: Creativity and Innovation in the Music Industry. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-28430-4_10
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