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Nicholas Kitonyi
Nicholas Kitonyi
Articles (319)  | Author's Website |

The Battle Between Technology and Music

Musicians are evolving with technology, but there are consequences

February 06, 2017 | About:

Technology and music have evolved greatly both simultaneously and interdependently. In music production, technological advances have transformed music not only in how it is produced, but also how it is heard. Digital streaming services have enabled people to listen to different styles and genres of music anywhere, any time.

For instance, musicians upload music people can listen to from anywhere in the world replacing the roles of distributors and record labels. The power to promote music is now in the hands of the musicians thanks to these advances in technologies.

What does this mean? Gone are the days of MP3 players, cassettes and CDs; welcome, on-demand streaming services. Like any change, though, downsides are bound to exist; in this case they include artists earning less from their music.

Are musicians benefiting from advances in technology?

Evolution of audio technology has come a long way and is headed much farther. Living in an era when audio hardware is no longer part of our lives, live streaming has virtually taken over demand for music in the industry. It’s great that anyone can now access music; that, previously, wasn’t possible.

This means that all those fortunes were spent on collecting music that is now easily accessible at one's fingertips. However, as a working musician, the thought of relying on people coming to see a live performance means that while that will not be generating any money for them, they would have to rely on getting money from royalties when it’s played on the radio.

It can be said that streaming exposes artists to a mega audience that would not have been able to pay for the full songs. This means that the advantages here are getting famous faster while being able to make substantial revenue along the way. This means that agents can now take up artists that have been successful on Vevo or YouTube since this comes with increased marketability.

Apple (NASDAQ:AAPL) founder Steve Jobs birthed a vision that enables people to play, purchase and store music through a media library application. This led to the launch of iTunes and the iPod – which can carry between 5,000 to 40,000 songs. In addition, the company launched another music streaming service a couple of years ago, dubbed Apple Music, which has a connect feature for artists to post pictures and videos as well as update their statuses. This merges the current trends in social media with music.

In terms of generating revenue, the company’s financial position and its uniquely qualified influence, allows it to absorb any income shocks resulting from a slow uptake of some of its innovative products. Apple Music is yet to generate any significant revenues to Apple’s top line, but analysts believe it could pay off soon.

On the other hand, there are those who view this paradigm shift as a potential bottleneck to musicians who rely on streaming services for music sales. It is not clear the revenue that makes its way into the artists’ pockets will be as good as for those using traditional distribution channels like CDs.

Pandora (NYSE:P) Radio is another comprehensive music streaming service that seeks to disrupt the music industry. It is a platform that gives you personalized radio that plays your choice of music while continually evolving with your tastes.

The radio service works by playing music of a certain genre based on the user's selection, after which it provides a "thumbs up" or "thumbs down" for songs chosen by the radio service. The feedback is considered in the selections of other songs to play.

Anyone can play music now

For many years now, technology has been changing the way music producers record and make music. While most still prefer using instruments such as guitars, drums, piano and other stringed instruments, it’s possible to make music without most or all of these instruments. Technology has also eliminated several barriers to entry in the music production industry.

Inventions such as the MIDI enable you to re-adjust wrong notes thus solving mess-ups and eventually creating a great masterpiece. It is important to note this opens the market to a bunch of creatives who might have been unable to produce quality music previously.

On one side of the coin it can be said that the technological advancement has led to loss of emotional attachment that comes with fine tuning for thousands of practice hours. On the other side, a vast possibility of ideas is created that might make the lack of technical skill insignificant.

Who stands to benefit the most?

The great question in the minds of many is whether music streaming services such as Apple Music, Pandora and Spotify will reap from the changes that have taken place over the last decade or so, or the musicians will continue to improve their sales.

Musicians are now revolutionized in how they can produce music and even the techniques to be used in creating and music writing. What previously required investments amounting to thousands of dollars can now be done with minimal cost incurred. Therefore, while the top line might be affected, innovative ways of producing music will help them cut their costs.

In addition to this, music can now be relayed over live streaming services and artists get paid for it. Not to mention being able to interact with fans using the same platforms. This type of engagement can help musicians create what the audience wants, thereby improving sales.

The audience gets to be able to listen to music released at almost no cost in comparison to the fortunes that would have been spent on collecting records. On the other hand, companies such as Apple Music and Pandora Radio can earn money by simply providing a platform that brings audiences and musicians together.

Disclosure: I have no position in any stock mentioned in this article.

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About the author:

Nicholas Kitonyi
Nicholas is the founder of CAGR Value. He is a financial analyst with extensive experience in investment research and stock market analysis. His analysis has been featured on several research sites.

Nicholas has solid knowledge of both U.S. and European markets. His investment style is focused on undervalued plays and growth stocks. Nicholas classifies himself as a swing trader and likes to trade GBP/USD, gold and FTSE 100, among other liquid instruments.

Visit Nicholas Kitonyi's Website

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