Final answer:
Changing economic practices in the music business, namely the rise of music streaming services, have increased artist royalties and altered traditional revenue streams, impacting both supply and demand. Streaming has also led to a decline in demand for physical formats and enabled artists to reach audiences globally through digital platforms.
Step-by-step explanation:
The trends in the music business have been affected by changing economic practices primarily through the influence of digitalization and globalization. This digital shift has significantly influenced how revenue is generated within the industry, affecting both supply and demand.
Music streaming services have altered the traditional revenue streams for music labels and artists. Instead of predominantly selling physical formats such as CDs or vinyl, the revenue model has pivoted towards streaming. This has resulted in a diverse array of platforms where artists can earn royalties from their music being played. The proliferation of streaming platforms has increased artist royalties but has also brought about challenges in ensuring fair compensation considering the vast number of streams required to translate into substantial earnings.
The change from physical to digital formats also represents a change in consumer taste, which has negatively affected demand for traditional formats like CDs, altering the revenue streams away from these physical products. This shift has had sociological impacts, such as the closure of many brick-and-mortar record stores, once community hubs for music fans. Moreover, artists are now able to produce and distribute their music independently, finding their audience globally through web-based commerce, thus diversifying beyond the reliance on large music labels.
Finally, this new model has not standardized pricing models for physical music formats, but rather has introduced variable pricing strategies, often based on subscription models, pay-per-listen schemes, or ad-supported free tiers on streaming services.