How digitization transformed music publishing in Malaysia

The music business relies on a network of professionals working together to turn creative work into a profitable enterprise. Everything from song creation and recording to live performance and promotion falls under this umbrella. Yet the industry's operating model has shifted dramatically since the rise of the web and digital tools. Essential players—producers, A&R representatives, songwriters, record labels, and music publishers—are all having to adjust their roles as change keeps coming.

According to Wikström (2013), the digital age in music started in the 1970s "when digital technologies were introduced in music production and recording." That shift reached distribution when compact discs appeared in the 1980s. Things accelerated once internet technologies emerged, becoming the single most powerful driver of change. By the late 1990s and early 2000s, the internet had pulled "promotion and talent development, into digital technology." In that period, innovation exploded, giving rise to platforms such as SoundCloud, last.fm, Spotify, iTunes, and Pandora. This research focuses specifically on how music publishers' roles evolved between 2010 and 2019.

Every label and publishing group develops its own strategy, but they all share one goal: maximizing profit. And that process must keep pace with digitization, since that is the reality of today's music world. Each step forward brings both opportunities and obstacles. This study examines the impact of digitization and its associated challenges for music publishers in Malaysia. To guide the investigation, specific research objectives were established.

Literature review

The goal of this study is to explore how digitization has affected and challenged music publishing in Malaysia, looking at the ways publishers have adapted to new digital realities. Understanding the forces behind this change is essential. Several earlier works have tried to grasp how the internet and digital technologies reshaped the workings of the music industry. Morris (2010) noted that "recording labels, music retailers and individual artists have evolved in their own right, companies and individuals with diverse interests in technology, computing, and the internet are primarily responsible for the recent re-arrangements of music industrial relations" (p. 16).

The Global Music Report (2018) observed that record companies now aim to improve the consumer experience by licensing their music and collaborating with tech firms, including audio streaming services and social media. "They are taking on complex challenges, building systems and clearing rights to bring exciting, yet easily accessible, music experiences."

The move from physical to digital distribution

In the old business model, as Vaccaro and Cohn (2011) explained (citing Hughes & Lang, 2003), mass production and distribution of physical goods—primarily CDs—was the norm. Labels manufactured discs and shipped them to retail outlets. Artists also sold CDs at concerts, through online e-tailers, and via direct fan clubs.

That model no longer dominates. CD shops across Malaysia have been shutting down, with only a handful remaining. Moreau (2013) pointed out that "digital files are much easier and less expensive to produce than CDs. The elimination of CD manufacturing and distribution reduces the cost by about 35%." (Curien & Moreau, 2006). Yet, as Morris (2010) and Ismail et al. (2021) argued, "the digital music commodity is surrounded by a massive legal, technical and a cultural grey area" because it does not involve "traditional manufacturing, production, and marketing." Debates over traditional versus current business models are still ongoing. Researchers concluded that online music did not offer a strong financial rationale for investment. Moreau (2013) wrote that "the idea of selling only a few songs at a retail price of $0.99 rather than a whole album at about $15 was not financially attractive" (p. 26). Physical goods also carry extra value—CDs come with "packaging, contents, artwork and liner notes" (Morris, 2010, p. 30).

The internet and social media as tools for distribution and promotion

Record labels once served as the powerful channel for promoting and distributing music. However, the free and open nature of the internet, combined with the rise of social media, has significantly lowered costs for musicians and reduced the role of labels (Gamal, 2012). Latonero (2003) stated, "The friction incurred by all the costs of distributing products in real space would be alleviated by the ability to transfer bits across the Internet instantaneously" (p. 130). Barr (2016) interviewed several "creators" at different expertise levels, finding that all of them used digital production software, digital platforms for dissemination, and social media networks to market their music.

Bernando and Martins (2014) examined disintermediation in independent music approaches. They found that artists increasingly take control—producing, distributing, and promoting their own work—without relying on major labels. Major labels had been "a lucrative business model, and have been the main driver of the industry" (p. 8). Independent musicians now exploit the internet and social media. Apart from distribution and promotion, cloud-based tools for management and tasking, delivered as software-as-a-service, are being used. "Online social media such as Facebook, Twitter, MySpace, and YouTube provide great tools to market products, services, and ideas. Several sites, online marketers, and blogs guide how music artists can best use these tools" (Bernando & Martins, 2014). According to Gamal (2012), some label roles have shrunken, forcing innovation. Still, labels retain importance through "their wealth of experience, connections with major media organizations and radio stations, public relations expertise, access to mainstream forms of distribution, and general knowledge of career strategizing" (p. 24). Gamal added, "The record companies have partially lost hold of the control that once allowed them to keep prices for music and their profits high. Ultimately, fundamental changes in production, distribution, and promotion brought on by the transformation of the economic climate redistributed profits and created new business opportunities" (p. 21).

The internet as a gateway to illegal downloading

Peer-to-peer file-sharing programs became easily accessible online. One of the most famous, Napster, was created by Shawn Fanning and grew to around 38 million users by 2003. According to Latonero (2003, p. 171), Napster's simplicity and convenience in searching for MP3 files were key to its success. Citing Gillespie (2009) and Burkat & McCourt (2006), Arditi (2012) noted that music was being distributed through P2P networks across the United States, bypassing traditional intermediaries to get music to stores. Anyone could use the internet and P2P programs to spread music publicly. This threatened the recording industry's exclusive grip on distribution. Arditi concluded that "disintermediation of the Internet presents risks to the record labels because it destroys the advantage that the major record labels have had over independent labels and artists in the production, storage, and distribution of music" (p. 197). Gamal (2012) added, "The record companies were not only hurting from a sales perspective, but their technique of legal action against individuals for illegal file sharing was not by any means a sustainable approach to digital music and began to harm their image among consumers" (p. 18). Mooney, Samanta, and Zadeh (2010) found that Napster "enabled individuals to effectively steal and share music," which coincided with falling CD sales (p. 1). Online communities could "connect and illegally share copyrighted music without any payment to the artist" (p. 4). Leyshon (2008) estimated that the top-ten P2P download programs in 2003 had been downloaded more than 640 million times, and 2.3 billion files were moved across their networks every month (p. 1311). These networks were "illegally swallowing the profits of recording artists and the music industry as a whole" (Mooney, Samanta, Zadeh, 2010, p. 1).

Copyright

Copyright is a pillar of the music industry. It draws the line between legitimate and unauthorized use of a given product under defined conditions. Dolfsma (2004) pointed out that the internet has severely disrupted existing practices, creating a dramatic shift. The framework of music publishers and record companies relies "on having control over copyrights" (p. 226). Arditi (2012) wrote, "Copyright separated musicians from their means of production—their creative songs are the object of their labour. Copyright legislation enabled musicians, their estates or representatives (i.e., publishing companies or record labels) to own non-commodified pieces of music previously" (p. 76). Maintaining excludability is now difficult because "music is being transformed into an information product" (Dolfsma, 2004, p. 226). Music can flow freely across the internet without any loss of quality, which creates enormous problems for record companies (Dolfsma, 2004).

Streaming and download services

The Global Music Report (2018) revealed that digital revenues surged 19.1% to reach US$9.4 billion, making up over half (54%) of global recorded music income for the first time. A major factor was streaming's growth of 41.1% (paid subscription audio streams climbed 45.5%). A 20.5% revenue drop in digital downloads meant they still accounted for 20% of global digital revenue. "In 32 markets, digital revenues now account for more than half the recorded music market with six further countries crossing the threshold last year" (Global Music Report, 2018, p. 13).

Apple's iTunes was a crucial success, with download revenues topping US$1 billion annually in 2005. Leyshon (2008) described iTunes as one of several legal options that offer "downloads that ensure that revenue flows from consumers to record companies, publishing companies, and artists" (p. 1311). Spotify also distinguished itself, paying ©8 billion to rightsholders since its inception and boasting 157 million active users, including 71 million paid subscribers (Global Music Report, 2018).

Methodology

This study used qualitative methods to investigate how digitization has impacted and challenged music publishing in Malaysia. The interview questions were designed to uncover factors that transformed publishers' roles in the digital era, to identify the challenges brought by technological innovation, and to understand both the positive and negative aspects of these impacts and challenges for Malaysia's music scene. Secondary data from within and outside the industry were also incorporated to obtain a broader view. The sample comprised two Malaysian music industry professionals with direct experience of digitization. Semi-structured interview questions were adapted from earlier studies—"Learning Agility: Case Study of Record Business Professionals in the Digital Age" by Sarah McGovern (2015) and "Music Artists' Strategies to Generate Revenue Through Technology" by Kalilu Kamara II (2018). Internal sources such as data from MACP (Malaysian Author and Copyright Protection), previous theses, and dissertations provided additional context.

Data collection

One face-to-face interview was conducted. The researcher first emailed and messaged the participants via WhatsApp to outline the study and request their participation. Afterward, the researcher asked permission to audio-record the session for analysis. A prepared set of interview questions was used. Data from the second respondent came through an email interview, where the questionnaire was sent out, and the answers came back by email. All interviews were recorded and transcribed. Existing thesis and dissertation data were also re-analyzed and reviewed.

Findings and discussion

The data analysis produced two main findings:

1. The impacts and challenges arising from technological innovation within the music industry.
2. The consequences of those impacts and challenges caused by digitization on the music industry.

Impacts and challenges from technological innovation

Rising from the analysis were several specific impacts and challenges associated with technological innovation. They included the shift from physical economies to digital ones, changes in promotional channels and copyright management, and the constant need to adjust to new streaming and download models. The full details of these findings, including their broader consequences for the Malaysian music publishing industry, will continue to be explored further in the concluding sections of the original research.

No single channel or platform for publishing music comes without its own set of obstacles. Given today’s advanced technology, illegal activities are unavoidable — one of the downsides of digital music. Even on official streaming platforms, online converters allow users to retrieve music without authorization, despite rights holders locking tracks or marking them private. In this technological environment, the music industry’s survival hinges largely on consumers’ sincerity and honesty. A person who values the creative work behind music tends to pay for it or seek legal ways to enjoy it. This depends on individual mindset and how one perceives music. Some listeners never consider the artist — the process and journey required to produce the music — and therefore don’t care; they believe music should be free. Leyshon supports this observation, noting that “there is now a culture of expectation among many music consumers that the default position for obtaining music is that it should be free” (p. 1312). Leyshon (2012) based this on Radiohead’s 2007 In Rainbows album experiment, where the band sold the album at a price set by the buyer. The result showed that most people who obtained the album paid nothing for it.

4.2 The Consequences of Digitization’s Impacts and Challenges on the Music Industry

The music industry has always faced challenges, but the digital age intensifies them. The digital revolution has profoundly transformed the industry. Respondent 1 notes that nearly every month, more artists are produced today. People — especially young adults and teenagers — can gain fame easily by going viral on social media. Many crave attention and will do almost anything to achieve it; once they do, record labels see them as potential products to sell. Consequently, the stream of people or “artists” signing with labels continues without pause, and they begin producing music. As in previous eras, the industry remains highly competitive — being “talented” and hoping to be discovered is no longer enough. Survival now requires musicians to embrace these new approaches — individually or collectively — to reach their audiences. Constant performance or product availability and exposure through distribution and social media platforms are essential. Gamal (2012) stated that the Internet and illegal piracy “undeniably played a major role in the massive shift in consumer preference by providing them with the means to easily access individual songs, without even stepping out of their front door” (p. 46). This supports the fact that many people obtain and consume music without paying. The Internet is indeed a life-altering innovation that brought tremendous change, especially to the music industry.

5.0 Conclusion and Recommendations

Following the digital revolution, the music industry’s consumption and monetization of music shifted, transforming the mechanisms of music publishing and how it operates today. Some changes are beneficial, while others are detrimental. For example, digitization made music consumption far more convenient — people worldwide can access music through their devices, eliminating trips to stores for physical copies and thus reducing revenue from physical records. This benefits labels by saving on production, manufacturing, and distribution costs. Another impacted area is social media algorithms, which personalize and sort user preferences. Labels and artists today are strongly advised to harness algorithmic tools and research their target listeners’ demographics. In our current digital era, understanding the importance of data in selling products is crucial.