This shows how the internet fundamentally changed our consumption.
A UK-based trade association representing the International Federation of the Phonographic Industry, reported last year that digital music sales accounted for 46% of global sales in 2016, totaling $US6,85 billion. Physical sales were $US6.82bn.
Online consumption and dissemination have certainly made life easier for many consumers and creators. Still, the online marketplace can also give monopoly rights to owners of sites such as YouTube, Google, and Amazon.
The explosion of online marketplaces that allow for the creation and sale of content has been described by many as democratization. The sheer concentration of market power in the hands of a few companies is a major obstacle to fair competition.
Economic power shift
The Internet has given economic power to large conglomerates like Google, Amazon.com, Yahoo!, Apple, and others. Google’s recent threat to ban the independent music sector from YouTube brought this shift into sharp focus. It raised the question as to whether or not the new economic power has reached dangerous and unprecedented levels. What does it mean for the digital market in which these giants reside?
Music has always benefited from its close symbiotic relationship with other industries, such as broadcasting. Songs that were played a lot on the radio or television were more likely to achieve commercial success. Songs that are popular on YouTube have a greater chance of being heavily streamed. Similar to radio stations and music streaming companies, the advertising revenue increases as their audience grows.
The comparison ends there. The broadcasting industry hasn’t always been a place of healthy competition, but it was, at the very least, regulated and governed. Internet economics challenges the concept of competition.
Internet addresses are now highly sought after, as digital markets are defined by URLs (and proprietary app stores). YouTube.com is an unquestionable market. For budding artists, having access to it is essential. The Internet Corporation for Assigned Names and Numbers, a non-profit organization that manages domain name designations, is a good example.
ICANN gives monopoly rights to a single TLD string, such as “.music.” The music industry and musicians have always considered “music” to be theirs for use. Still, recently tech giants like Amazon and Google have applied to ICANN to obtain the exclusive rights to use “.music.”
If the “.music domain” was to be given to a large conglomerate such as Amazon or Google, ICANN’s credibility as an independent regulator could be compromised. It would not increase competition or advocate for the rights of online communities but instead give one of these companies another market.
If these large corporations managed the “.music” domain, then artists, independents, record labels, copyright associations, and other parties would be dependent on their management. Do we want this?
What is the level playing field?
In the past, people used to discover new songs through radio. The content was curated by DJs and other experts, saving consumers a lot of money on search.
This model looks antiquated now. Ratings and views are the main ways consumers discover new content. The new model may seem fair to some, but it actually robs consumers of social cues that would help them find new music.
Consumers are more vulnerable to targeted ads based on their internet profiles without curators such as radio DJs. Music discovery has always been subject to coercive influences, but now it is nearly impossible to detect or remove them.
Who owns what
Users are the ones who create the social fabric on platforms like YouTube. The views, comments, and likes they provide are crucial to the success of any music streaming service.
The harsh reality of the situation is that while some academics will romantically describe this as “co-creation”, the content created by consumers is guided and adapted by private companies under terms of service that are so long that nobody bothers to read them.