Investigacion - Desregulacion industria musical. El caso en Grecia

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Deregulation of the music industry, the Greek case. How music composers and groups affect the role of the music industry in the new technological era. Giannara Eirini Hellenic Broadcasting Corporation (ERT/ERA S.A)/ National and Kapodistrian University of Athens, Department of Communication and Media Studies Keywords: Music Industry, Internet, Traditional Media, New Media, Radio, Youth, Social Isolation, Podcasting, Composers, Groups Abstract In the past few year, “online” consumers developed two very powerful habits for the informative goods of – the first one is the “downloading” via Internet and the second is the “free of charge” acquisition. These habits influence now the music, as a newer informative good. The changes that resulted in the consuming behavior and at extension in the economy of musical industry are powerful and direct. They are considered in deed so much powerful what they tend to change the whole structure of music industry. The new structure describes the deconstruction of old chain of production in the music industry. Recording companies, as we knew them, tend to disappear. Also their role will change in order to be adapted in the new structure of music industry or will shrink considerably. Nowadays the fundamental channel for commercial promotion and distribution of music is the Internet. The New internet model of dissemination of information replaces the old enterprising model of distribution of goods. 1

Transcript of Investigacion - Desregulacion industria musical. El caso en Grecia

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Deregulation of the music industry, the Greek case. How music composers and

groups affect the role of the music industry in the new technological era.

Giannara Eirini

Hellenic Broadcasting Corporation (ERT/ERA S.A)/ National and Kapodistrian

University of Athens, Department of Communication and Media Studies

Keywords: Music Industry, Internet, Traditional Media, New Media, Radio, Youth,

Social Isolation, Podcasting, Composers, Groups

Abstract

In the past few year, “online” consumers developed two very powerful habits for the

informative goods of – the first one is the “downloading” via Internet and the second is

the “free of charge” acquisition. These habits influence now the music, as a newer

informative good. The changes that resulted in the consuming behavior and at extension

in the economy of musical industry are powerful and direct. They are considered in

deed so much powerful what they tend to change the whole structure of music industry.

The new structure describes the deconstruction of old chain of production in the music

industry. Recording companies, as we knew them, tend to disappear. Also their role will

change in order to be adapted in the new structure of music industry or will shrink

considerably. Nowadays the fundamental channel for commercial promotion and

distribution of music is the Internet. The New internet model of dissemination of

information replaces the old enterprising model of distribution of goods.

Music

Music: perhaps the simplest and simultaneously the most complex concept.

Contradictory finding, but it reflects the truth and shows the key feature of the musical

art: its vague nature. Music is not clearly defined, is not limited, it is not tangible and is

not fully evaluated by objective criteria. Despite the fact that related to practical and

objective criteria, issues such as mastery, talent, creativity, synthetic ability and many

else besides, these are not the elements, which give in music its values and shape its

identity.

By contrast, music in some way is indentified with the audience. If music is not heard, it

cannot become part of human culture. If does not «travel» in time and space, it ceases to

be important and loses its value. Therefore the existence of the audience is an integral

part of music. In modern times, where new technologies and managerial lifestyle have

invaded in all aspects of life, the meaning of music has changed partly its nature.

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In recent years, culture is moving around the backbone of the economy. Apart from the

value of music as one of the higher arts, appears as equally important and freight value,

the value of distribution, exploitation, promotion and general the consumer value. This

new aspect of music does not subtract anything from its actual value, but affects a large

extent and in many ways the music production. In essence creates a new relationship

between music and audience.

Music in the Information Age

In the course of the continuing development of the Internet as a major new medium

across the world (but particularly in the Western societies), music - related

communication has increasingly come to supply an important portion of the total

amount of information transmitted over the Net. Today, there are multitudes of well-

frequented newsgroups catering for musical tastes from the very broad to the very

specific, e-mail distributed mailing-lists for even more specialized topics, and a plethora

of Web sites created by fan and industry organizations.

Obviously music-related discourse is generally central (not only) to Western societies;

due to its very nature music is virtually inescapable, so that listeners are continually

confronted with it, and thus find themselves perpetually considering the extent of their

like or dislike towards even merely incidental music.

Music is central to popular culture, and intimately connected to the trends within it: as

Attali writes, “music runs parallel to human society, is structured like it, and changes

when it does. It…is caught up in the complexity and circularity of the movements of

history”. As we move into what is now usually called the “information age”, then music

as such and the music industry are likely to experience, but also foreshadow certain

fundamental changes in society related to that beginning age, and here particularly to

the first major medium of this new period of human history-the Internet.

The Net exhibits a number of characteristics which set it apart from the traditional

media. Centrally, it is the first mass-access medium where the public can actively and

publicly – in contrast to the mere one-to-one communication of media like the

telephone, for example-participate in large numbers.1 Is therefore has the potential to

give the “average” member of the public, so far virtually excluded from topic-setting

participation in the mainstream media, their say: thus “critical to the rhetoric

1 where access is available, and thus excluding for the moment underprivileged individuals and communities, as well as remote areas

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surrounding the information highway is the promise of a renewed sense of community

and in many instances, new types and formations of community” (Jones 11).

In the context of modern society, music is an integral part of daily audio landscape

(soundscape). The technology has also lead to a major redefinition of relations between

artist/audience in the performance of music. From the underground dance music scenes,

where computer technology has redefined what it means to operate as a "musician"

(Negus, 1992) in the karaoke-bars, where the audience and the performers are

essentially exchangeable (Drew, in 1997 .. 2001. .2004), Technological development

has exerted great influence on the role and importance of music in everyday life2.

Frith has suggested that what makes music special is “the way in which it seems to

make possible a new kind of self-recognition [and] frees us from the everyday routines

and expectations that encumber our social identities” (1987:144). In their appropriation

and use of musical texts, individuals are also symbolically engage with the everyday,

the conventions of play, pleasure and protest associated with collective participation in

music, facilitating a symbolic negotiation of everyday life in contemporary social

settings3.

As DeNora observes: “Music is a device or resource to which people turn in order to regulate

themselves as aesthetic agents, as feeling, thinking and acting beings in their day-to-day lives”

(2002: 62).

Digital Distribution of Music

Since 1999, the Internet has drastically altered the production, distribution, and

consumption of music (Molteni & Ordanini, 2003). Digital music distribution via

unauthorized consumer peer-to-peer (P2P) file trading has become one of the most

popular Internet activities throughout the world via the renegade pioneer Napster and

now current unauthorized4 organizations such as the popular Kazaa.

From 1999 to 2002, annual global music sales declined by about $2 billion, which was

attributed to unauthorized online P2P file trading, offline piracy (e.g., production and

sales of counterfeit CDs), a poor economy, and shifts in purchase priorities of young

2 The predominant use of music in advertising and the rise of retro market during the last twenty years has also glimpse the enlargement of the relationship between music and lifestyle. Like fashion, so the music now used effectively to articulate an ever more diverse range of lifestyles in the modern society. 3 This point is reinforced by Grossberg who argues that an understanding of music “requires asking what it gives to its fans, how it empowers them and how they empower it. What possibilities does it enable them to appropriate in their everyday lives?” (1986: 52). Although Grossberg is concerned here primarly with rock music and youth culture, his observations can be related to the role of music in everyday life more generally.4 The term unauthorized refers to the fact that the music currently traded on P2P networks is not licensed by record labels and copyright holders, and under the law throughout the world, is illegal.

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consumers from music to DVDs and video games (Strauss, 2003). Darwin’s survival of

the fittest and Levitt’s marketing myopia indicate the power of new technologies to

disrupt existing business models to adapt or become obsolete. Two major factors have

contributed to this imperative: technology and consumer dissatisfaction with the

traditional business model (Freedman, 2003) .5.

As a business model define «the method by which a company builds and manages its

resources in order to offer its customers the best value (products and / or services) from

its competitors in order to increase the economic benefits» (Afuah & Tucci, 2003, p.4).

The multiple manifestations of the market, the development of the scope of trade, the

types of products and services provided, but the specific features and continuous

product development and the needs of consumers leading to the creation of different

business models. Hence the firms adjust their business model depending on the type of

market they face, products and services that will promote and particularly the

relationship that either have developed or wish to have with customers and consumers.

The classic business model in the music industry involves the mass production and

distribution of material goods (Hughes & Lang, 2003). The model refers to the record

companies that manufacture industrial product (primarily CDs-optical discs) and

distributed by Music Stores and shops on the music, club music (direct mail clubs),

online retailers (online e-tailers), as and musicians who sell their works in concerts. The

classic business model reflects the history of the music industry since the early 20th

century until the beginning of the 21st century. (Hull, 1997; Rivkin & Meier, 2002).

5 Past surveys have examined the response of major record companies to the phenomenon of music piracy and illegal trafficking in music over the network (e.g. through litigation created and developed technologies for digital protection of the right of authors Freedman, 2003). Other investigations have focused on economic and social impact of the use of P2P systems and the shift of power from record companies to independent artists and consumers (Hughes & Lang, 2003)

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Deconstruction of the New Economy

As Evans and Wurster (2000) mention deconstruction is the dismantling and

reformulation of traditional business structures6. When the trade-off between richness

and reach is blown up, there is no longer a need for the components of these business

structures to be integrated. The new economics of information blows all these structures

to bits. The pieces will then recombine into new business structures, based on the

separate economics of information and things.

Many researchers originally thought that the Internet could be a powerful tool for the

democratization of communication in general and artistic communication in particular.

The optimism expressed by the «case of the electronic market» and the «case of

disintermediation».

According to the so-called «case of the electronic market» (Malone, Yates and Benjamin

1987), the networked computers will create a new, transparent trade area, where buyers

and sellers will meet in minimum time and with minimal cost7.

The case of the electronic market-if confirmed-is important for the music- sound

recordings industry, taking into account some of the features with one hand only 10% of

generating revenue, enough to cover losses from the remaining 90% and there are

profits and huge costs required to promote the product on the market.

Therefore, the music industry could reduce costs, eliminating or at least drastically

reducing storage, transport and distribution of «natural product», as the CD.

From the perspective of authors, some researchers - such as Shapiro (1999)-considered

that the formation of this new market will contribute to further democratization of

artistic communication.8

Today, it is possible to create quality music productions with professional standards,

using only digital technology for the control and management of sound. Large

orchestras, or separate areas for rehearsals are no longer required. There is no need even

for musical instruments with the «traditional» sense. Any creation can then be put into

6 It results from two forces: the separation of the economics of information from the economics of things, and the blowup (within the economics of information) of the trade-off between richness and reach. Traditional business structures include value chains, supply chains, organizations and consumer franchises.7 The producers will reduce their overhead costs and eliminate traditional stages of distribution and consumers will benefit from unlimited choice and the cheap prices. According to Kretschmer, Klimis and Wallis, this case is consistent with the theory «on frictionless capitalism». 8 «The visual artists make virtual galleries, which expose their works. The Cartoonists have their cartoons on many sites simultaneously, instead of newspapers. The musicians have their compositions in cyberspace for the public hearing ... digital creators may collide with the Disney world, creating a completely open market with cheaper distribution ... » (Shapiro, 1999)

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circulation in the world cyber market, either directly from the manufacturer or by a

single intermediary. For several years, businesses have emerged musical sound

recordings, which operate exclusively via the Internet. Thus, even where the parties are

unable to handle the tools required to publish their works on the Internet, may delegate

this process in such enterprises, which require an even rate, if there is sales.

It, therefore, the well-founded view that the Internet-combined with advanced

technology music-production will contribute decisively to the disintermediation of

artistic communication, making unnecessary several of the major mechanisms of the

cultural industry and intermediate stages inserted between the musicians and audiences.

The new business model involves the provision of legitimate music distribution services

digitally. By 2008, according to Forrester, a percentage that is expected to be reach 33%

of the sales will be music from legitimate online «download» and that sales of CDs will

fall by 30% from the peak in 1999 ( Needham, 2003).

The provision authorized online music services is part of the primary Web business

model, which refers to digital products and digital distribution and often creates

strategic alliances with Internet service providers (Bambury, 1998). The first company

to provide legitimate music content distribution services on the Internet appeared in

1995, but none of the previous or later efforts to provide services did not appear to give

(Rivkin and Meier, 2002) 9.

Music Industry and Internet Market: The Greek Case

Greece is among the countries which have been slow to gain on technology

infrastructure and advanced information systems. The dominance of the Internet in

everyday life and in the professional field of citizenship is a matter of recent years. The

proliferation of personal computers and provide faster and more stable connections were

the causes, which contributed to the spread of Internet in Greece. Alongside the state

planning and initiatives are always crucial for the development of the country and in this

area.9 In May 2004, Napster 2.0 version was introduced in the European market with the British edition of next month and the iTunes of Apple opened up its platform in Europe, particularly Great Britain, Germany and France («iTunes Tops", 2004 ; Twist, 2004). In 2004, competition has increased with more than 10 online distributions of music files, which operated platform in Windows (Legon, 2004). Nevertheless, in accordance with the existing situation, the legal «download» music files is considered a drop in the ocean of the Internet and music compared to the mass acceptance and use of exchange files through unauthorized and therefore illegal music distribution services. When in April 2003, the company Apple presented its new iTunes service had made the first major success for this business model. Within the first six months of operation of the service purchased for «download» more than 14 million song titles. In July 2004, iTunes reached 100 million «download» ( "iTunes Tops", 2004).In the European market there are more than 30 legal online services that offer music files or method of payment per «download» (pay per download), either through subscription (IFPI, 2004).

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During the period 2002-2005 the program of the Ministry of Economy and Finance

under the title «Information Society» and more specifically the Greek working group on

broadband, has cooperated with relevant European groups, to ensure the financial

market of the country10. As such, it and similar efforts have given a boost to adapt to

modern Greece online reality. Despite the positive results Greece has some way to go

yet. The experts talk of «Internet gap» in comparison with other European countries,

including Greece is (in 2007) in the last position in the use of broadband (large band)

internet with just 7%, dramatically small compared to the average Europe (42%).

However, the increase in Greek households with access to the Internet though small,

reflects the forthcoming change.

Despite the delay of Greece to acquire the appropriate technology and computer gear,

the imposition of the power of the Internet became evident outset. Many areas of

professional, but also the personal life of Greeks was influenced by the Internet and

companies base their business plans more and more to it. So is particularly interesting

study of business models trafficking and distribution of music online. The most part this

is simply conventional type business models. But there are a number of new studies and

research on business models, which have to offer something different.

Frequently encountered models of the type of online shops (e-shops11), or as existing

businesses that operate via the Internet, either as a pure Internet e-business. And often

for international companies, which are operating in Greece12. In most of these e-shops

you can choose from a variety of products related to music, as musical instruments,

sound systems, professional sound equipment, CDs, DVDs, books, etc. That does not

mean that there is not and what specialized online stores, as the buyer can choose from

specific types of products. In general the above electronic stores follow the imperatives

of the era of access. In terms of content can be described as fully updated with extensive

uses interactive and personalized user interface.

Another notable reference example is Madshop13, owned by Mad TV14. In this e-shop

the user has the option to buy music CDs and other promotional items with the logo of

the channel. It is a hybrid type of advertising and business model.

10 “Broadband Access”, Consultation on the Content and Services of broadband networks in Greece, Business Program “Information Society”, 200311 For example, Musica.gr, ArtSound, Compact Disk Club, CDStore, MusicStore etc.12 For example, Compact Disk Club, Music Store etc.13 http :// www . mad . tv / shop 14 Popular music channel in Greek television. Lately Mad TV bought the broadcast rights of MTV for the Greek district.

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On the other hand is now growing the creation of Greek Internet radio. Most of these

are Web pages, through which mainly conventional radio stations transmit their

program. 15

But the last two years in Greece have made their appearance and their purely online

radios (web radios) 16. The online radios are on the merits and new business model

differs radically from conventional radio station. Users have access to various

interactive services, while offering them the choice to shape and influence to a large

extent the music program. In some of these listeners create and upload their own

program17. Also frequent is the phenomenon of pre-recorded broadcasts, as well as the

«music libraries» from which everyone can choose tracks.

In general, online radio in Greece becomes highly competitive, following the evolution

of technology and acquiring a growing audience. Attribute the proliferation of web

radios is that very often created specialized radios, which rely on a very specific kind of

music.18

The landscape or the “soundscape” of the Greek online business models related to the

overall management of music on the Internet is still relatively blurred. But as shown by

what has been said already, the power of such business strategies has been recognized

and trying to «embrace» as many sectors as possible. More and more artists and groups

turn their interest in smart business moves via the Internet. It is noteworthy the fact that

most of them have a personal website on the Internet, through which they advertise,

promote and feature their music. Also it is interesting that this move is done not only by

young people, new artists, but also from older and well established artists.

The attempt to find a successful business model for the protection and management of

copyrighted digital content and is now part of the Greek reality. In this direction are

moving in recent years many researchers trying to identify a very strong formula

business and communications strategies in the modern technological environment.

Several of the scholars refer to a model designed to protect copyrighted digital works,

15 Such as: Nitro Radio (http://www.nitroradio.gr), Orange Radio (http://www.orange932.gr), Antenna Radio (http://radioantenna.gr, Second Program 103,7 (http://www.deytero.gr) etc.16 Όπως το Radiobubble (http://ww.radiobubble.gr) , το Grassagoogoo (http://www.grassagoogoo.gr), το Ραδιο Κύκλος (http://www.radiokyklos.gr), το Active Radio (http://www.activeradio.gr) etc.17 For example to Mindradio (http://www.mindradio.gr )18 For example radios, which rely on Greek folk music such as Epirus Music (http://www.epirusmusic.gr), which promotes the music of Epirus.

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the main characteristics of which are expected to be flexibility and the partial project

management and the detailed design19.

This model refers mainly to projects and works of the Greek cultural heritage and not

the music industry. Therefore this can be an indicator of the extent that business models

have taken place into the new technological environment in Greece.

Another model, which could well be applied on the Internet distribution and

management of music, either through commercial Web (e-shops), or through other

online music sites dissipating, is that of Creative Commons licenses20.

This system proposed by the Creative Commons licenses is not the overthrow and

abolition of intellectual property, but the redefinition of the rules and creating a new

balance based on the principles of the Internet.21

The free adaptation and transformation makes the content accessible to the public the

contractual terms the same authors choose, with the ultimate objective of creating a

public space digital goods with which they may produce other projects. The Creative

Commons licenses no change in the institutional framework for the protection of

intellectual property. The principles of Creative Commons licenses leading to the

coexistence of two parallel licensing or categories of use: the licenses are based on

stable intellectual property rules, and licenses based on the rules of Creative Commons

and relate mainly to the use of works in digital form.

Unfortunately, artists are not so familiarized with these kinds of licenses hesitating to

leave the relative safety of conventional contracts. Especially, when this situation is

related with the refund of intellectual property rights. A very important sector of the

music production and distribution, which in Greece is governed by a monopolistic logic

of a single body of intellectual property management. Recently, however, more and

more known artists and groups have incorporate Creative Commons licenses in their

musical material disseminated via the Internet. The development of the Internet is a

reality and the changes it brings expanded and revised. If Greece will succeed in its

effort to follow the international pace of the Internet is an open question. The truth is

19 Tsolis, D., “The role of business models in the light of Intellectual Property”, High Performance Information Systems Laboratory, Patras University.20 From 13 October 2007 Greece was added to the countries so far have adapted the Creative Commons licenses under their domestic law to protect intellectual property.21 This system proposed by the Creative Commons licenses is not the overthrow and abolition of intellectual property, but the redefinition of the rules and creating a new balance based on the principles of the Internet. The authority is governed by the logic of Economy prize, which could be described more transactions on the Internet.

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that Greece has entered the age of access and has been affected by it, living at the same

time all the controversial implications of this act.

Conclusions

With the emergence of peer to peer networks (P2P) has contributed greatly to the so-

called adjustment of the business model. A change that forced a readjustment and the

existing international law and intellectual property rights. And here are the changes that

had occurred but also the legal adjustments and revisions made, «rise» plethora of

concerns. Freedom or restrictions? Participation or passivity? May be strengthening and

promotion of music in society without the required freedom of movement of its creators

and supporters? The answer is of course not.

New market conditions and sales, new ways of communication, new ways of

distributing music and new ways of listening, and finding music collection are some of

the results that have come to internet business models. What is remarkable in this case is

the way in which all these were entered in everyday life as essential elements. Perhaps it

could be considered that they meet the basic requirements of modern times:

convenience, speed, personality, access to information. Therefore reflect the services

offered via the Internet business models the values of modern Western society? And if

so, how this combined effect of personalized social person with the concept of common

heritage and common ownership of intellectual creations, which captures more and

more? This is contradictory issues, but successfully combined several times from the

online business models.

Taking this as a starting point of a sociological approach to the phenomenon of the

Internet is very easy to give satisfactory answers to the questions raised in this paper. A

widespread view on the identity and function of the Internet is «the ideal vision of the

Internet as a place of public debate and democratic communication» (Atton, 2004).

However, technological and economic aspects and the many other roles of the Internet

in everyday life help to understand how Internet is more than a medium of

communication. Mainly this can be seen as an alternative medium of communication

(Atton, 2004). As such does not exist just to facilitate communication between people

but also serve as a valuable tool for social and political guidance during the era of

globalization. The immediacy which characterizes Internet as a medium of facilitates its

role in shaping the identity of users / consumers.

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The faith of «belonging» in an online community restores and strengthens the sense of

identity. Through this faith is emerging a new idea for culture and civilization. The idea

of the common cultural heritage and participation of all cultural goods are more

powerful than ever.

The new Internet business models of music management adopt this dipole, which

combines the creative action of the author / user / listener / consumer with a sense of

cultural heritage in fact it is a shift that has been done primarily by the law, «intellectual

property has come to consider the symbolic forms of art as property» (Toynbee, 2002).

It is also the fact that copyright laws distinct to each project the idea of expression. Thus

the same and can be used repeatedly modified and a different way to other copyright

works. The spread and availability of music, image, sound and all creations are free via

the Internet and is not considered necessary to have intellectual keeper of the project.

However, the leeway offered in people resulted in a commercial property and

perception of art, collected, is available, copied and exchanged on the Internet. A

project «breaks» into smaller pieces exploitation and utilization of any one of which is

the corresponding «owner» and administrator. So the subject is active and affects the

fate of all creations, but also for society as a whole comes into contact with the so-called

cultural heritage, which now is undoubtedly part of the common property.

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