More than ten years have passed since Shawn Fanning and friends released the file-sharing software “Napster” to the world and thereby kick-started one of the most radical transformations of the multinational music industry.
Today, young music listeners no longer put on a CD then they party and it is actually also becoming less common that they play MP3s from their computers or iPods. Rather, the young audience of today listen to music from YouTube, last.fm, Lala, Spotify, or some other Web-based music service. Music is no longer something the mainstream audience owns and collects – Music has moved into the Cloud.
*’The Cloud’ has been used as a metaphor for the Internet since the early 1970s when the technologies behind the network of networks were invented. A cloud was considered to be a useful and vague enough symbol which could be used to summarize all the resources, cables and gadgets which connected the computers at the nodes of the network.
*During less than a decade, the music industry has completely shifted from the physical to the virtual – from the Disk to the Cloud. The Disk-based music industry was all about control and a music firm’s top priority was to maximize the revenues from each individual piece of intellectual property and to minimize unauthorized use. In a Cloud-based music industry, it is still important to know how one’s intellectual property is used by the audience but it is more or less impossible to control that use. In a Cloud-based music industry, music firms must embrace the enhanced connectivity between fans and build their businesses on an assumption that their recordings are universally available.
The relationship between connectivity and control is fundamental to all cultural and media industries, and as the connectivity increases and the ability to control the flow of information decreases, the logic of these industries is radically altered. In the old music industry, the content(music) and the medium (disk) were inseparable, and the music industry was focused on music products as a physical goods which were shipped and sold all over the world. In the Cloud-based music industry where information is more or less impossible to control, it becomes increasingly difficult to charge a premium for discrete chunks of information. As soon as some kind of information is uploaded to the Cloud, it is instantly universally accessible which makes the commercial value of providing basic access to an individual track or album very close to zero. But there are other things which remain chargeable. In a world where information is abundant, people may not be willing to pay a premium for basic access to that information, but they are most likely willing to pay for services which help them to conveniently navigate through the vast amounts of information. Such services, such as the currently much-hyped European based service Spotify, is an example of how the industry may be able to survive even without the ability to control.
Further, the increased connectivity combined with various kinds of music production tools enable ‘non-professionals’ to create, remix and publish content online. The making of mashups and remixes based on well-established musics seems to be a thriving mode of consumption in the Cloud-based music industry. Many music firms respond to this user behavior by arguing that this is copyright infringement which should be policed and ceased as soon as possible. However, it is not entirely unrealistic to assume that those fans who create, remix and upload content to the Cloud also are the most dedicated and loyal. It is also quite likely that they are the ones who spend the most on concerts, merchandise etc. Based on those two assumptions, it makes sense for music firms to secure a good relationship with these fans, encourage their creative desires and do their best not to push them away.