It is no secret that the music industry is struggling as of late. With the advent of the digital technology age its entire business model is under serious revision so that the industry can maintain its revenue stream. The revenue that the music labels rely on comes mainly from the copyright contracts that they maintain with artists signed to them. Originally, this also included record sales which started off as 8-Tracks, Vinyl, Cassettes, CDs, and Videos. However, now with digital music as accessible as it, there is much less profit to be made because people have stopped buying CDs, and instead either buy songs separately or download them illegally.
Record labels have responded to this by altering the contracts that they have with artists so that they can optimize their profits. (http://www.freakonomics.com/2011/08/31/the-music-industry-copyright-battle-when-is-owning-more-like-renting/) This is further being threatened by recent legislature with copyrights which is giving back artists their rights to songs after 35 years. Record labels previously were able to make a profit on the distribution and production of different songs that they had the copyright to. So how will they be able to maintain their revenue within the industry? With artists also losing profits, the two need to revise the business plan for each so that they both profit jointly together instead of in ways that cheat one or the other out of profits. The content of the music itself is even being threatened because music labels are looking for the most profitable types of music that will make them the most money in the end. Ultimately, with youtube and iTunes, record labels will need to change their relationship with the artist and what they profit from in terms of the music that is recorded in their studios.
If I was a executive in the music industry, I would focus on the concert and touring industry which seems to be losing steam because of the internet and digital era. People can see their favorite videos and listen to their favorite songs quite literally immediately after they are released. The concert experience is one that shouldn't be lost and is one that does make a lot of money when it is executed properly. I also think that there needs to be a settlement when it comes to copyright because too many artists and record labels lose profits from the illegal downloading that has become so prominent in our digital era.