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Record Label Marketing, Second Edition

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The concept of selling recorded music has been around for more than a century. While the actual storage medium for music has evolved, from cylinders to vinyl discs, magnetic tape, digital discs, and now downloads, the basic notion has remained the same: a musical performance is captured to be played back at a later time, at the convenience of the consumer. Music fans continue to enjoy the ability to develop music collections, whether in physical compact disc format or in collections of digital fi les on their computer hard drives. Consumers also enjoy the portability afforded by contemporary music listening devices, allowing the convenience of determining the time and place for listening to music. The ways consumers select to access music have been undergoing changes in the past few years, as physical sales have diminished and the industry scrambles to fi nd new business models for underwriting the cost of developing new creative products.

Music consumption should not be confused with music purchases. The consumption of music by consumers has increased ( Heffl inger, 2008 ), despite the fact that sales of recorded music albums have decreased over the past decade from 785 billion units in the United States in 2000 to 535 billion units in 2008 (SoundScan). In response to the decline in sales of recorded music, record labels are experimenting with new ways to monetize the consumption of their music. For example, new services like LastFM, Pandora, and MySpace Music offer music fans the opportunity to listen to music without actually purchasing it. Record labels are compensated through advertisement revenue sharing.

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