Music & Movie Industries Revision 2010

Internet & Digital Technology: Impact upon Music & Movie Industries

Music

Movie

Figure 1: Venn Diagram of Music and movie Industry Overlap During the course of the module there were two separate but interlinked sessions on the music and movie industries; and how the Internet and digital technolgoies have impacted upon them. A literature review of this topic area would show that it is widely felt that the movie industry is going through a similar phase to that experienced by the music industry a few yeas ago. There is a large amount of material available to students who are interested in this topic. This includes plenty of material within the module itself (See Figure 2) hosted on NOW, as well as links and mentions on the module blog and Delicious social bookmarking site.

Figure 2: Music & Movie Industry Worksheets on NOW

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There are lecture PowerPoint shows for both sessions; the one for the music session being the larger of the two slideshows. Students should note that the lecture PowerPoint contains some dated/dating statistics but more recent ones can be found via Google, the articles tagged on Delicious. There is also a concise overview document covering both industries on NOW including some suggested keywords and phrases (Section g. of NOW – Music Industry Overview – but it also notes the overlap with the movie industry). The Music & Movies Wikibook (also on NOW) is 60 pages in length and covers some key areas giving students a useful starting point (See Figure 3).

Figure 3: Table of Contents of Music & Movies Wikibook There are many articles about the music industry, movie industry and issues around technology, copyright, piracy and intellectual property tagged on Delicious and postings on the module blog, which are both searchable (See Figure 4).

Module Blog

=http://phil-wane-ics.blogspot.com/

Phil on Delicious

= http://www.delicious.com/Moonglum

Figure 4: Blog and Delicious Services Naturally a Google search will also return plenty of material and it is the kind of topic that is also covered by the quality newspapers (The Guardian, The Independent and The Times) on a fairly regular basis as well as organisations such as the BBC. If searching Delicious or the module blog try terms like musicindustry, music, movies, copyright. There is a list of tags down the right hand side of Delicious. A test search returned 72 results for the term musicindustry (see Figure 5 next page) and 23 for the term movies; many of which were good quality articles for supporting quotes and data.

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Fgiure5: Using Delicious to find articles tagged “musicindustry�

As detailed in various module materials the music and movie industries are interconnected via the perceived threat to their primary business model of content production for revenue in the light of changing consumer behaviour and expectations afforded by technological developments. Ceteris Paribus (other things being equal) consumers will often choose free stuff over paid for stuff. This presents a problem to those trying to sell stuff (music and movies especially in the form of physical products) when those who want to consume goods find that technological changes allows them to do so. There tends to be a focus on piracy and illegal copying and downloading of digital material but there are other issues to be addressed as well. For instance, even where consumers are willing (or forced) to pay for content they may consume it in a different way to before. For example music fans may choose to download individual tracks rather than but bundles of tracks called albums. This has an impact upon the possible pricing models, with a growing tendency for there to be flexible pricing, with more popular tracks being more expensive, and less popular ones being cheaper to purchase.

Consumers, especially those in the prime demographic, have many more things to choose between these days, for instance, a choice of CDs, or legal music downloads, or the purchase of DVDs or legal movie and television downloads, or maybe the purchase of a video game, or electronic book etc.

Key Economic Concepts Noting the examples above it is possible to see how a knowledge of economics might be applied to the topic. Factors such as the price elasticity of demand, possibly the cross elasticity of demand, and marginal utility come into play. As economists it would be really useful to be able to link some instances of theory to practice.

Key economic terms and phrases one might associate with this topic (not exhaustive) are: Economies of scale, price elasticity of demand, disintermediation, net profits, Return on Investment (ROI), Supply and Demand, Long Tail, marginal utility.

The lecture PowerPoints ,exercise sheets and other materials run through a number of scenarios related to the impact of technology on the music and movie industries so they will not be repeated at length here. Students are strongly encouraged to seek to offer an analysis of the subject rather than simply describing the situation with regard to music, movies and intellectual property issues. How did the music industry respond to the threat it perceived from illegal downloading of their product? Were the strategies successful? IF not, why not? Could other industries, such as the movie industry (or book publishing industry) learn lessons from the experience of the music industry. Given that the music industry is made up of heterogeneous units (companies and individuals with different characteristics) was the effect of technology a uniformly good or bad one? Or was it actually good for some whilst begin bad for others? For instance musicians who could use the technology as a means of disintermediating costly intermediaries?

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Technology

Music Industry

Movie Industry

Figure 6: Venn Diagram Illustrating Interconnection of Technology and Two Industries The above diagram is really just a way of simply illustrating the interconnected nature of the music and movie industries. The issue of technology links the two industries, both of which relied upon selling product (in the form of pre-packaged entertainment; albums, movies at the cinema and on DVD etc) as their primary business model. There are plenty of examples of how technology has impacted upon the two industries and how in responding to those effects the industries themselves have begun to change. The impact of changing technology and consumer behaviours can also be seen in other industries, such as computer games, software and electronic publishing; but a focus on music and movies allows for a more concise examination of the topic. Students can use examples from other industries but make sure they are relevant and being used to make a particular point.

Downloads

Downloads

Illegal Downloads

Legal Downloads

Legal Downloads Illegal Downloads

Figure 7: Downloads – Legal and Illegal – Changing Proportions?

Something that is clearly happening is that digital downloads are becoming a very popular way of downloading digital products (music, movies, television shows, games software, office software and more. Apps for your phone anyone?). Whatever the actual current (disputed) figures it seems clear that illegal downloads account for a greater number of the downloads than legal downloads but the relevant industries would like to reverse this situation or even eliminate illegal downloads completely. All in all an interest area and plenty of supporting materials available.

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