Alles draait om de muziek

The music industry is a highly unstable business environment and research reports suggest that it is hard to earn money in this very insecure market. Within this market there are two players, the major and independent labels. The major labels are the dominant companies of this industry. However more and more independent labels appear to be entering the market. This research focuses on the question why these independent labels are entering an unstable market. The aim of this thesis was to answer the following research question: Why do Dutch independent labels enter a strongly changing, insecure, declining music market and what kind of influence does this have on the relation between independents and majors? This question is relevant because literature suggests that diversity appears to be an important factor on an economic market. Researchers claim that independents bring diversity to the music market. This research can be an addition to previous research because it explores if the industry is capable to offer enough diversity. Music plays an important role in the lives of humans and they need a diverse market supply of music. In order to answer the research question a qualitative method was used. Desk research on the numerical scale of the music market served as a basis and defined the research field. Analyses of this research field and the results from the ten interviews with independent labels in the Netherlands were used to answer de sub- questions and the main research question. Technological developments made it easier for independent labels to enter the market. This is because everyone can have their own studio at home and the internet offers new distribution opportunities, like i-Tunes (online store of Apple). A breach has arisen because of these fast developments of technology and digitalization. The independent labels jumped in that gap with their knowledge of the current market. They use blogs and promo’s (written pieces about the music they produce or distribute) to promote their music online. The independents search for other sources of income and make deals with important brands. It became clear that major labels are less capable of making full use of these new opportunities. The major labels are clinging to their proven business model. This is an important change between major and independent labels, but not a very big one. The major labels seem to stay the dominant companies in the music industry, because of their enormous network and financial capabilities. Furthermore it became clear that the market is not as problematic as research reports and literature suggests. It is a business that is dynamic and companies are still earning money. The most important problem is that consumers are less willing to pay for music. The price of music declined, but there are other sources of income. The music companies earn a lot of money with concerts, and albums are used as promotion tools. It seems that the major labels are suffering more from this problem. Majors work within a commercial market where most of the music is available online for free. The independents labels on the other hand work within a niche market. They do not suffer that much from the download threat. And more important, their aim is not to make a lot of money. Of course, they are a business and they need to earn money to survive, but it is not their main purpose to start an independent label. Independents enjoy their work, they love good music and they want to present this good music to the world.