Andrew Leyshon of the School of Geography at the University of Nottingham recently gave a detailed presentation to APRS members.

 

It was part of a broader study which is considering the implications for copyright-based economic activities in an era of digital reproduction and distribution.� The focus of the study is the musical economy which in recent years has been subject to a significant crisis of reproduction which has been exacerbated by the advent of Internet �piracy� (Leyshon et al., 2005).� The project is exploring the consequences of this crisis for key actors and institutions within the music industry.� Currently, the research is investigating the recording studio sector in UK. �Over 30 interviews have been conducted with key informants since 2005, building on earlier interviews within record companies in both the UK and the US.�

 

To some observers, it might appear that the music industry has, after a long struggle, managed to convert the Internet into a successful distribution channel.� There are now as many as 335 sites that offer legal music downloads and the most successful of these, iTunes, chalked up one billion downloads by the beginning of 2006. �iTunes exceed $billion a year in sales, has a library of two million songs, and delivered 420 million tracks via download in 2005 alone.� However, iTunes is dwarfed by Peer-to-Peer (P2P) networks which are the main conduits of illegal downloads (Leyshon, 2003).� The top ten P2P programs have been downloaded over 640 million times worldwide and an estimated 2.3 billion music files are exchanged across these networks every month. �For example, Kazaa has a user base of over 140 million computer users, which is more than more than double the membership of Napster at its peak.

 

The growth of Internet piracy coincided with a decline in global music sales �by 15% between 2001 and 2004 � which led many in the music industry to argue that there is a direct and causal relationship between the two phenomena.� In fact, it is probably more accurate to see Internet piracy as a �tipping point� in the music industry, which brought into sharp focus the already precarious nature of the musical economy.� The traditional �recovery rate� within the industry of 10% has fallen to just 3%; that is, in some record companies only 3% of recordings actually recover the costs of their production.� Thus, an entire industry is predicated on the sales of a very small proportion of total production.� Although Internet piracy has played a part in the crisis facing record companies, other factors such as competition for the �share of wallet� of the under 24 year old consumer market is significant, as the consumption of music has to compete with new passions such as computer games, mobile phones, DVDs, etc.

 

The response of record companies to a collapse of sales and earnings has included job cuts, a shrinking of artist rosters and contractual changes, as well as cuts in A&R budgets.� Given the central role of record companies within the music industry these developments have inevitably had significant impacts on the musical economy more broadly (Leyshon, 2001), which included the recording studio sector.�

 

APRS members can read more about this presentation in our Members Only section by clicking here and entering the username and password which is printed on their membership card.