Report: Social Media and the Music Industry

[Prepared for COMM 3350- Spring 2011]




With tools such as Last.Fm, Pandora, music/mp3 blogs, and even artist profiles on networking sites, social media and the music industry have formed a direct relationship. Social media have opened countless new and advantageous opportunities for artist promotion and exposure, as well as eliminating the necessity of “middle men” between fans and musicians or other like-minded fans. Unfortunately for the music industry, online activity becomes increasingly difficult to control with each new technology release, and piracy becomes significantly easier to conduct. Therefore, those in the music industry, like Warner Music, must find ways to adapt to this more digital age of music commerce and utilize each change profitably.

According to a panel of music industry representatives in a discussion with the Social Media Club Los Angeles, it is exceedingly clear that there are substantial advantages to artists who make use of social media, as there are to the music labels and fans. Of these, indie bands see the greatest reward. First, loading an mp3 file onto their social networking profile is significantly easier than the time, money and effort required organizing a gig. They also immediately have access to millions of potential fans worldwide, rather than those in small venues. It is no longer unheard of for a band to gain considerable popularity and recognition without ever signing a record deal or having a song on the radio. Artists are also exposed to big companies looking to target the niches which best represent their brand.

Through many forms of social media, bands can “join the conversation” with their fans. Fans experience constant and exclusive access to artists by following Tweets, reading blogs, friending them on MySpace, etc. This greater degree of interaction between the two helps to cement the connections between bands and their fans, bringing longevity to the relationship and influencing their sales.

Social media also seems to be bringing down barriers between the music industry and fans as artists have begun using it in many ways to bypass the traditional media. Following the controversy with Taylor Swift at the MTV Video Music Awards, Kanye West used Twitter to tell his side of the story, rather than letting fans hear the interpretations of the media. He claimed: "Man I love Twitter … I've always been at the mercy of the press but no more … The media tried to demonise me". Other artists, including Jermaine Dupri have begun to focus on ways they believe new media is the future of the music industry itself.

All new opportunities come with both advantages and disadvantages though, as no good thing comes without sacrifice. Social media is no exception to the music industry. While there are now mp3 blogs such as HypeMachine which allow free downloads and samples of music to fans, music industry executives find that these do more harm than good by devaluing the work behind the music. New available technologies such as CD-R, P2P (Peer to Peer) and torrent technologies make music piracy and theft increasingly easy and cheap. As Tracey Roper points out, the impact of these on music business revenues is incalculable. John Enser, partner and head of music at Olswang, says, "As illegal downloading hits an all time high and consumers' fear of prosecution falls, the music industry must look for more ways to encourage the public to download music legally. Variable pricing models and DRM free music, which would allow consumers legally to transfer music to other devices, were popular among respondents [of the Digital Music Survey] and represent new ways of enticing people away from breaking the law."


Ways in which music is purchased have also been significantly altered thanks to social media. No longer is it necessary to travel to a physical music store, as most new music is made available to consumers inside their own home.  The switch to single songs in mp3 format has made releasing CDs almost completely obsolete. Consumers can download only the specific songs they want, so losing the guarantee of the sale of the complete album has led to decreased revenues for both the record companies and artists. Therefore, greater emphasis is now placed on the release and marketing of "singles" in an attempt to boost profits.

In the past decade alone, social media has nearly revolutionized what is required of the music industry. According to the “Impact of Social Networks on Music Commerce” Olswang report based on the 2007 Digital Music Survey, 53% of people actively surf social network sites to discover new music and artists, and two-thirds of all users regularly or occasionally discover music that they love on their preferred social network site.  Later, it appears that music labels realized the profits being generated by sites such as MySpace thanks to their artists, and began looking for ways to redirect those profits back to the label. In December of 2008, Warner Music pulled all its content from YouTube after not managing to agree on a mutually-acceptable licensing deal with Google. They advise bands not to rely on social networking sites, as they gain and lose popularity, but to have their own URL to promote themselves. On these sites, Warner Music intends to use Eos social networking platform by Cisco (a set of social networking tools that can be integrated into various music sites to bring more social feeling to them and let fans interact with their favorite artists on the artist’s own website) to keep fans on their own sites instead of communicating elsewhere.

Clearly, social media has gained huge momentum in the past decade, and is a factor which cannot and should not be ignored by the music industry. It provides a great opportunity for all parties within the industry to employ new tactics of promoting and marketing themselves. Not only will success require talent, but also technological savvy. Artists, labels, and retail companies alike must adapt to the changes or find themselves as obsolete as eight tracks.