The music industry is made up of four main conglomerates; EMI Group, Warner Music group, Sony BMG and Universal Music Group. They own over 80% of the music industry, with only under 20% being owned by Indie Labels such as Rounder Records. These conglomerates want to keep their dominance over the music industry, therefore if an artist, group or label gets too popular, they buy them up (Horizontal Integration). According to www.songrights.com companies give 9%-12% of the profits to the artist, then keep the rest.
Traditional methods of Record labels singing artists, then selling their songs is beginning to change. The internet means that artists can reach audiences without the need of a major record label. Software to produce music can be purchased for very little, even as an app on smart phones. Unsigned artists can now sell music to iTunes, have it streamed on Spotify, Sound cloud or YouTube.
Audiences now consume music in a different way, and the music industry has struggled to keep up. The main problem is 'free' music, audiences are now less likely to pay for songs, and therefore piracy has risen. Piracy is loosing the music industry $12.5 billion every year, company's such as Spotify have tried to change this. They allow audiences to listen to music for free, without downloading it. Youtube has censored videos so they cannot be downloaded.
'The Superstar Economy is where the internet is meant to weaken the dominance of large artists, and increase the names of smaller niche artists. But research has show that the internet is not having this effect, superstars are taking most of the music revenues and their shares are increasing. The top 1% of the music industry take 77% of the profits in the music industry (2013).
