October 17 , 2005
Dowd looks behind the music industry’s latest moves
By Eric Rangus
Timothy Dowd has about 8,000 songs on his iPod. He’s maxed out his 40 gigabyte machine and now needs something bigger. He has downloaded a few hundred from iTunes, eMusic and other (legal) online music services, but most of the songs come from his 1,000-CD collection.
Like many savvy consumers, Dowd uses technology to increase his enjoyment of music. As a researcher, he explores the sociology of all the factors related to his overstuffed iPod: culture, media, music, organizations and economics, among them.
“Economic sociologists are interested in how the logic by which companies operate affects the actions they take,” said Dowd, associate professor of sociology. “Companies look at the environment, they [determine] what demand is, and they quickly respond to it. Economic sociologists say that organizations confront an ambiguous environment and have to work to interpret it: ‘This is how our market works, and this is what our environment is like.’ So economic sociologists are interested in how companies put together that account.”
And the recording industry, according to Dowd’s research, hasn’t always been successful.
“Until the 1990s, the industry had not been doing much research on customers,” he said. “Recent sociological research claims that what we’re seeing now is part of a trend toward individualized listening, where you can use the music any way you see fit, negotiate your environment and define who you are.”
How does this individualized listening affect record companies? Historically, Dowd said, record companies responded by offering an expanded range of genres and attending to various segments of the audience, rather than treating the audience as undifferentiated mass.
“Retailers likewise have taken similar steps, paying particular attention to point-of-sales information,” he said. “However, sociological research finds that consumer notions regarding musical genres are more varied and evolving than the genres touted by recording companies and retailers.”
This is exemplified by the growing popularity of online music distribution—often illegal in the beginning, but now legitimate and incredibly popular. The most popular seller, Apple’s iTunes, has sold more than 500 million songs worldwide since its launch in 2003. Online music retailing has become an increasingly vibrant market.
But even here, disparities between formats means technology doesn’t always cater to the consumer. Not all players are compatible; songs downloaded from one seller may not play in another company’s player. Many industry insiders blame online music for slowing record sales.
Although record companies may be aware of these problems, Dowd said they have been slow to respond to online music, but that may be changing. “British retailers like HMV and Virgin have developed their own online services, so the shift to online music is picking up steam,” he said.
Dowd also studies the morphing world of record companies. Following recent consolidation, there are now four major record conglomerates. For many critics, that’s not enough. But Dowd points out there were only three dominant record companies in 1940, and the industry was nowhere near as diverse then as it is now. To judge the industry by that one marker, he says, is to ignore the big picture.
“The standard view is that big companies ruined music, so when a few companies dominate the industry, things are going to get bad,” he said. “I find that it depends on how those big companies operate. If they are highly bureaucratic, it makes it difficult to adjust to change, and the dominance of a number of companies does lower diversity in a number of ways, such as dealing in relatively few genres, offering limited musical and lyrical content, and touting a few established acts at the expense of new performers.
“But when they become un-bureaucratic,” Dowd continued, “[when they] have a lot of different music divisions and ally with a number of independent record companies, then that loose approach to the music business offsets the negative effects of their dominance.”
Dowd’s interest in the music industry springs from his own musical background. He performed throughout college and into graduate school, but as he moved into his academic career, he could not devote as much time to it but did not want to walk away completely. Now most of his musical energies go to working in his home studio rather than public performance.
“One of the things that struck me was that if you get into various types of professions, there are clear paths to success,” said Dowd, who plays keyboards, bass and guitar. “In the music business, it’s not so clear cut. You could become extremely polished as a musician and not have a career, or you could not be polished and have a great career. So, one of the things that drew my interest is, how does this business operate in the face of such ambiguity and uncertainty? Rather than become a musician and take a big risk, I thought I’d study it instead.”
This article first appeared in the Goizueta Business School electronic newsletter, Knowledge@Emory, and is reprinted with permission.