The music industry underwent a radical transformation with the emergence and widespread adoption of the MP3 concept along with the digital transformation. Digitalization, which first caused the decline and then the disappearance of physical music sales, has changed the access to music in the music industry by 100%. This study examines the transformation of the music industry on the axis of digitalization. Before digitalization, music was listened to on vinyl records, CDs, and cassettes, but with digitalization, music has started to be listened to only through MP3. In 2000, Steve Jobs opened the first digital music platform iTunes, and this study examines the 20-year development of digital music platforms, emphasizing the economic effects of digitalization on the music industry. At the end of the study, inferences are made about how digitalization will affect the music industry in the 2030s, and predictions are made about the future music industry.
TopDigital music platforms have experienced technological innovation, commercial disruption, and changing consumer behavior. Explore these platforms' history and development. Vinyl, cassette, and CDs were the main music distribution methods before digital platforms. Although charming, these formats were limited in portability, durability, and capacity. MIDI files were the first digital music files utilized by musicians and producers for electronic instruments and software.
Figure 1.
CD-MC and LP for music distribution
Creating MP3 in the 1990s was revolutionary. It reduced music files substantially without compromising audio quality. This enabled digital music storage and sharing. Napster was launched in 1999 (Yassin & Yassin, 2021). It made music sharing and downloading easy, encouraging piracy. Napster was shut down due to legal issues, but it showed customer demand for digital music. Apple introduced iTunes in 2001, allowing consumers to legally buy and download songs and albums. This site offered a legal alternative to piracy and started the digital music sales revolution. Platforms like Pandora, launched in 2000, introduced the concept of Internet radio. Users could listen to music stations curated based on their preferences but had limited control over song selection. On-Demand Streaming: Services like Spotify (2008) and Deezer (2007) introduced on-demand music streaming, allowing users to choose exactly what they wanted to listen to. These platforms often operated on a freemium model, offering both free (ad-supported) and premium (subscription-based) listening options.
Recognizing the demand from audiophiles, platforms like Tidal offered lossless, high-fidelity streaming, catering to those who prioritized sound quality. Platforms like YouTube Music combine audio tracks with a vast library of music videos, offering a unique blend of audio and visual content. SoundCloud emerged as a platform for independent artists, DJs, and creators to share their music, remixes, and live sets, fostering a community of indie music enthusiasts (Yassin & Yassin, 2021). As streaming developed, artist royalty payments were criticized. Many said the reimbursements were low, raising questions about the streaming model's sustainability and fairness. Some platforms acquired exclusive artist releases to differentiate themselves and entice members, although this practice has become controversial and rarer. Spotify expanded into audio entertainment services as podcasts and other audio content became popular. Digital music platforms are millions' main music consumption source. They have large libraries, tailored recommendations, and flexible subscriptions. Smart speakers and voice assistants have made streaming more interwoven into users' lives.