Music in the Social Media Age

The digital revolution has spelled many changes for the Music Industry. Legitimate revenue streams in the music industry have changed frequently and rapidly in the last ten years as a result of the Digital revolution as displayed in the chart below. Illegal downloads were zapping the lifeblood of the industry and hopes were placed in legitimate streams of revenue in the form of mobile ringtones and subscription services which now are showing signs of decline (DeGusta, 2011).

The Real Death of the Music Industry (De Gusta, 2010)

With the significant rise of the smartphone it was hoped that mobile purchases of legitimate digital downloads, however, this has continues to decline. The table below as featured on (Panzarino, 2011) gives a closer look of the Digital impact on Music Industry revenues by comparing digital very physical music sales. As already mentioned, mobile revenues continued to fall by almost 30% between 2009 and 2010 but an encouraging trend is re-emerging in Music Subscription services which by 29.9% from 1.2 to 1.5 million. While these numbers may seem insignificant at first it should be noted that these subscription services such as Spotify mean that subscribers now have access to a wide array of music and not just single tracks. Therefore, the increase from 1.2 to 1.5 million subscriptions actually includes the potential for several thousand song sales. Panzarino states this occurrence has further Digital implications as subscription models deliver content to users via cloud computing which will eventually replace the single track purchase.

This also has significant impact for Digital Royalties which rose by 60%. This rise comes at a critical time for musicians who saw a decrease in traditional performance royalties for the first time ever, as released by the British Performing Rights Society in March of this year. The PRS accounted the sharp decline of £7 million to the rise of illegal downloads and the loss of high street music stores (NME, 2011).

Today the Recording Industry Association of America released their 2010 sales statistics for digital and physical music.

RIAA 2010 Music Sales

RIAA Digital and Physical Music Sales May 2011 ©

The loss of the high street shops has been a change to both culture and traditional distribution and promotional channels as detailed by Deighton and Kornfeld (2010) As CD sales have collapsed the fallout of which has meant that traditional retailers such as Virgin Megastores and Tower Records have significantly downsized or folded outright. In January of this year BBC reported HMV are in similar financial difficulty that befell Woolworths and Zavvi before they eventually closed down BBC, 2011). Legitimate Music buying Customers now buy music from larger retailers such as Tesco and Wal-Mart who stock only best-selling artists.

However many commentators have professed that Social Media’s rising importance in the music industry is continuing to grow. Further encouragement can be found in Strategic Eye’s recent findings which reveal that more than 85% of music industry respondents see social networks as a very important channel for promotion and marketing (Woods, 2009).

And so budding musicians and the industry at large desperately looks to Social Media for a replacement distribution and promotional channels. CEO of “Nettwerk” Terry McBride stated in an interview for Mediashift (Glaser, 2008) that the promotional terrain in the music industry is now shifting from retailers and radio to social networks and blogs.

Even since Social Media has begun to make its impact on music distribution the landscape has changed radically. The poster boy of Social Media music distribution was MySpace which is credited with launching the successful music careers of Lily Allen, Arctic Monkeys and Sean Kingston (Gerht, 2009). The medium even went as far as forming a record label in November 2005 and boasts having more than 5 million bands and artists online (Armstrong, 2008). However, since the purchase of Myspace by News Corporation users have criticised the site for its commerciality and since 2008 page views and user growth have declined (Crunchbase, 2009).

Facebook on the other hand has enjoyed phenomenal growth while Myspace has been deserted. Amusingly, Edwin Van Buskirk (2011) notes that Facebook has beaten Myspace in audience numbers, time spent online and number of block buster movies made about them. On a more serious note, Van Buskirk also points out that MySpace still remains a better platform for musicians to distribute music which has spurred the growth of so many “Band Facebook Applications”.  Put simply, MySpace was the superior platform with no audience while Facebook has the audience without band hospitality suite. Facebook Applications such as Reverbnation, iLike, Band Camp and BandPage have all began to serve musicians needs that arose from the mass emigration of bands from MySpace to Facebook.


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