!
Change!and!Growth!of!
Australian!Music!Value!
Chains!
!
!
A"thesis"submitted"in"fulfilment"of"the"requirements"for"the"degree"of"Master"of"
Design"
!
Sam!Steedman!
B.A.""
School"of"Architecture"and"Design"
College"of"Design"and"Social"Context"
RMIT"University"
February"2008"
Change!and!Growth!of!Australian!Music!Value!Chains! Page!2
"
Declaration+
I"certify"that"except"where"due"acknowledgment"has"been"made,"the"work"is"that"
of"the"author"alone;"the"work"has"not"been"submitted"previously,"in"whole"or"in"
part," to" qualify" for" any" other" academic" award;" the" content" of" the" thesis" is" the"
result"of"work"which"has"been"carried"out"since"the"official"commencement"date"
of" the" approved" research" program;" and," any" editorial" work," paid" or" unpaid,"
carried"out"by"a"third"party"is"acknowledged.""
"
"
"
"
"
Sam"Steedman,""
February"2008.!
Change!and!Growth!of!Australian!Music!Value!Chains! Page!3
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Acknowledgements++
I"wish"to" acknowledge" the"assistance"of" my"supervisors,"Lawrence" Harvey" and"
Dr"Jonathan"Boymal,"for"their"time"and"guidance"in"the"preparation"of"this"thesis."
I" also" acknowledge" my" family" and" friends," especially" my" parents" and" wife" for"
their" assistance" throughout" this" study." I" could" not" have" completed" it" without"
their"support.""
Change!and!Growth!of!Australian!Music!Value!Chains! Page!4
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Forward+
This" study" of" Australian" music" distribution" systems" is" a" culmination" of" my"
experience"in"the"music"industry"over"the"past"10"years."Whilst"having"a"strong"
background" in" music" performance," composition" and" production" it" was" the"
opportunity" to" participate" in" the" development" of" a" music" distribution" system"
that"enthused"me"to"follow"an"academic"course."""
In"2000"there"was"a"lack"of"legitimate"digital"distribution"systems"and"services."
There" was" also" a" lack" of" skilled" music" personnel," and" foresight" from" financial"
institutions"and"Internet"service"providers"with"regards"to"the"potential"of"online"
music"distribution."Generally"the"industry"did"not"understand"the"importance"of"
the"emerging"group"of"music"and"technology"users.""
Following"much"time" and"effort"in"preparing"a"small"website" and"database"the"
technology" market" changed" dramatically" and" the" risks" for" such" a" project" out"
weighed" the" benefits" and" development" was" halted," due" to" the" local"
communications" company" and" banks" charging" excessive" fees" for" information"
uploads"and"downloads,"and"bank"transfers.""
I" have" subsequently" worked" for" a" variety" of" music" oriented" businesses" within"
the"creative"industries"including"a"merchandising"company"and"a"private"music"
school"in"parallel"to"my" undergraduate"and"postgraduate"studies."This"study"is"
an" accumulation" of" my" experiences" in" the" rapidly" changing" Australian" music"
industry."!
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Abstract+
The" Australian" music" industry" is" growing" and" developing" yet" specific"
information"about"the"ways"in"which"distribution"systems"develop"is"limited."In"
this"study"I"examined"the"growth"and"change"of"the"Australian"music"value"chain.""
This"includes"the"development"of"digital"distribution"systems"and"the"effect"that"
peer‐to‐peer" technology" has" on" system" development," specifically" the"
disintermediation" between" consumers" and" artists" to" the" detriment" of" the"
multinational"value"chains."The"drivers"of"this"change"are"broken"into"social"and"
technical"elements"in"order"to"describe"the"growth"and"change"occurring.""
The" method" used" included" a" comprehensive" literature" review" and" use" of"
secondary" data" from" key" music" industry" associations." The" Australian" music"
industry"is"a"subset"of"the"global"industry"and"is"led"by"foreign"markets"and"their"
methods"in"which"music"content"moves"from"the"creators"to"the"consumers."
The" consumption" patterns" of" Australian" music" consumers" are" changing." The"
overall" value" of" the" music" industry" is" dropping" as" the" new" digital" downloads"
market" emerges"and"the" overall" volume"of" sales"increases;" this" reflects"similar"
trends"in"foreign"markets."CD"single"sales"have"dropped"and"digital"single"sales"
(in" MP3" format)" have" increased." However," there" needs" to" be" a" balance" in" the"
future"development"of"Australian"music"distribution"systems"between"the"needs"
of" music" consumers" and" the" sustainability" of" music" companies," where" there" is"
both"connectivity"and"steady"revenue"flow.""
There" are" technical" elements" that" have" caused" a" movement" away" from" the"
traditional"forms"of"music"distribution"as"new"technologies"facilitate"the"change,"
such" as" Apple’s" iPod" and" broadband" Internet" connections." Advancement" of"
distribution"systems"has"increased"piracy"levels"and"the"response"has"been"the"
implementation" of" digital" rights" management" (DRM)," which" prevents"
connectivity."There"are"also"social"elements"that"affect"growth"and"change"such"
as" connectivity," or" the" consumers" freedom" to"choose" when," where" and"how" to"
listen" to" their" music." When" music" product" has" a" restriction" placed" upon" it" its"
value" to" the" consumer" drops." Multinational" music" companies" have" failed" to"
recognise"the"value"users"place"on"the"freedom"to"pick"and"choose"and"have"tried"
to"control"rather"than"to"co‐develop"systems"that"meets"both"parties"needs."