Richard Letts

Music Forum 6/5 June 2000

80% of the world's trade in music happens under four giant transnational recording companies whose fortunes at present depend on global marketing of Anglo-American pop music.

We can buy music of virtually any culture by ordering from massive catalogues from internet music suppliers, locations unknown. Furthermore, the whole deal can take place on the internet: the search, the ordering, the payment and the delivery. We needn't leave the room.

Music, more than almost any other commodity, has lent itself to globalisation. And globalisation is upon it.

Globalisation didn't just happen, and it hasn't yet finished: it is a process that has been underway for decades. But in the last decade it has so much accelerated that the way our world works has changed fundamentally. Thanks especially to electronic communications, the world is becoming a global marketplace. Capital moves around the world with great ease, and with the global movement of capital has come the formation of global companies selling to a global clientele. Global trade can take place in fractions of a second over the internet. The internet is a vehicle not only of trade, but of communications and ready access to incredible amounts of information.

While so much of the change we are experiencing depends upon electronic communications, there has also been an unprecedented global movement of people. The ease and cheapness of transport has encouraged voluntary travel — migration and tourism. Millions travel more involuntarily, refugees mainly from civil wars.

These movements of information, funds, trade and people affect culture and the means by which we participate in it. The music industry has been globalised through the absorption of many record companies into the four giant companies mentioned above.

Global trade, and the transnational corporations that dominate it, has escaped many of the regulatory regimes of national governments. New regulatory instrumentalities are being created under a World Trade Organisation but the regulation is intended mostly to free trade of constraint. There are positive effects through penalising unfair trading practices. But in the name of free trade, there have been attempts also to roll back national powers e.g. in environmental protection, or sustaining local culture and heritage.

So there has been a reaction to the homogenisation of culture and the loss of local power to global forces: a vigorous reassertion by ordinary people and by governments, of the local. There are now international alliances, both governmental and civil, to exempt "culture' (heritage and the arts) from the free trading regulations of the World Trade Organisation. The call is to preserve "cultural diversity', echoing the efforts of the environmental movement to sustain biological diversity.

Globalisation is incredibly complex. How best to organise any discussion? This article takes up the categories of trade as they are dealt with by the World Trade Organisation - trade in goods, services, and intellectual property — because are the framework for crucial government policies and therefore, private advocacy. But globalisation encompasses more than trade, so other categories deal with non-trade aspects. Globalisation and technological change have always been interdependent, and we look at technological change in that context.

The article shows a hundred ways, large and small, that globalisation affects musical activity. In future issues, we will look at the overall effect on the music industry, and at the global regulatory structures that could so damage local cultures.

MOVEMENT OF PEOPLE

Migration

Increased migration. With increasing ease and diminishing cost of transport, widening knowledge of relative living standards, and proliferation of conflicts and the refugees from them, has come massive migration.

Immigration. With the migrants comes their music.

Assimilation replaced by multiculturalism. In Australia, immigration has been officially encouraged. While earlier post-WW2 policies were for assimilation to a mono-culture, they have been replaced in Australia and most Western countries by policies in support of multiculturalism. The main (but not the only) driving force behind policies of multiculturalism has been the political response to large immigrant populations. This response generally has included policies for the survival of the arts (including music) of immigrant cultures, possibly because they are important symbolically but not in the power structures.

Survival of migrant musics. The musics of ethnic communities may survive unaided within those communities. We know also that an ethnic music may disappear if there is no interest from within its community, or from the "mainstream' community. Mainstream interest may even sometimes be a key to the survival in Australia of an ethnic music. Relevant government policies tended initially to support survival of musics at a folkloric level, through festivals for instance. There was also support for professional musicians, a focus that seems recently to be deepening.

Hybridisation of musical styles. There has been interest both among musicians and government funding agencies in hybridisation among ethnic styles or between ethnic styles and mainstream styles in pop, jazz, classical music etc., both for musical and political/idealistic reasons. The presence of immigrant musicians is only one of a number of influences driving this hybridisation, but it can be an especially powerful one.

"World music' takes hybridisation to the global market. Hybridisation is most high profile in "world music', where musical styles may mix or a single style may be adapted to attract a mass global audience. "World music' brings multicultural music into the financial rewards system of the global music industry.

For and against "world music'. Some musicians oppose the world music "industry' because they believe it distorts, degrades or displaces musical tradition. Others argue that world music encourages a tolerance for, and active interest in, cultural diversity, as well as bringing economic benefit for the musicians who have a greater opportunity to reach the global market.

Emigration.

Losing some of the best musicians. Some of the best Australian musicians emigrate, whether informally through permanent departure or formally through surrender of Australian citizenship in favour of citizenship elsewhere. Although such emigration is no longer routine as it was until the 1950s, there are some impracticalities in basing an international career in Australia: time, money and energy expended in intercontinental travel, difficulties in maintaining networks and profile in the larger and artistically denser markets of the USA, Europe and some Asian countries. Emigration deprives Australia of the artists' beneficial influence on local musical standards and innovation.

Tourism

Expanding. International tourism is expanding with increasing affluence in many countries and cheaper real transportation costs.

Export.

Tourists and music sales. Australia's tourist industry has become a major contributor to export income and employment. This creates an opportunity for increased box office sales for musical events, harvested especially by major high profile companies and venues, and for recorded music.

Marketing to tourists. Some major events, venues and companies specifically target an international tourist audience before it has arrived in the country – e.g. Adelaide's Ring Cycle, or the Barossa Festival. Arts presenters have collaborated with airlines and credit card companies to sell advance admissions. But much of the marketing is to tourists once arrived in Australia – e.g. through print materials distributed through hotels.

Collaboration with tourist industry. There has been some collaboration between the arts sector and government tourist agencies to promote cultural sales. However, tourist agencies mostly promote overseas an image of Australia that is contrary to any perception of cultural accomplishment or attraction.

Internet marketing. Now underway is a major Sydney-based enterprise, ArtsDiary, which has the objective of selling seats for performances around the world to a global market via the internet. Australian performances will be among them. Such companies are already in operation from bases overseas. Many individual companies have websites through which program information can be discovered and tickets purchased; access of course is international.

Designing arts for the tourist market. Some artists develop content designed specifically to appeal to tourists – e.g. the "bush cabaret' performed in a restaurant in The Rocks, Sydney. This is to the performing arts as is the Australiana souvenir to serious craft work: a source of revenue if not great art.

Recordings and the tourist market. There is a large tourist market for the tangible objects of visual arts and crafts, and obviously an industry that intends to satisfy it. However, while there is some modest sale of Australian recordings at international airport terminals, I am not aware of any substantial marketing of CDs of Australian music and musicians to the tourist market.

Cultural predispositions of tourists as arts consumers. The susceptibility of tourists to arts promotion depends to an extent on their habits of cultural consumption domestically. For instance, despite the number of Japanese tourists, research has shown that their average contribution to the Australian performing arts box office is low, in part because of their relatively short duration of stay, but perhaps also because they have low participation rates when at home. Among tourists, those from North America and some European countries are the highest consumers of Australian performing arts: their longer average stay in Australia gives more time for decisions to attend, and their domestic attendance patterns predispose them more to attendance in Australia. Tourists travelling independently are more likely to attend than those travelling on organised tours. Other such statistics have been collected pertaining to the purpose of the visit. (Available from the Australian Bureau of Statistics and Australian Tourist Commission.)

Imports (i.e. the purchase of foreign travel by Australians.)

Audience expectations. The effect on the Australian music sector probably is mainly increased exposure of Australian music consumers to live performances by foreign musicians, with results as hypothesized in the next section.

Concert touring by musicians

Australian international trade. In 1991-2, Australian live musical performances (plus related merchandising) earned AU$24m in exports. Australia imported $40m in performances, for a trade deficit of $16m.

Imports

Audience expectations, again. The "Nugent Report' (Securing the Future, Report of the Major Performing Arts Inquiry, Department of Communications, Information Technology and the Arts, Canberra, 1999) posited that one reason for the financial difficulties of major Australian performing arts companies, including non-profit music organisations, is the increasing resistance by audiences to performances of less than international standard. This results from exposure to live performances in Australia (or overseas; see above) by international artists, as well as performances recorded or broadcast, which are not matched in quality by local groups.

(I would observe, however, it is no longer a general assumption that if it is local it is of poor standard. Australian performers are much more likely to be accepted or rejected on their merits.)

Festivals disadvantage other producers/presenters. The major festivals are the most notable importers of live international performances, due to their need to offer attractions otherwise not available and their deeper pockets, the result of relatively generous government and corporate funding. On-going institutions complain of relative disadvantage, with damage to their programs and even viability. A necessity for local companies to meet the standards of international competitors might be welcomed; for subsidy-dependent forms, subsidies then need to be at a level consistent with the objective.

Coordination. Some collaboration between festivals and venues has been opened up by the advantages of sharing travel costs for some overseas artists — countering somewhat their desire to be the exclusive presenters of major artists and so not have to compete for out of state/country audiences.

Government regulation. Government regulations (1) limit the number of international artists admitted temporarily to perform in Australia and (2), may require that their entrepreneurs also present a specified number of Australian performers. These requirements are supported by the relevant unions and occasionally opposed by the entrepreneurs. In the popular music industry, the special opportunity for Australian artists is compromised by their status as opening acts, clearly lower in the pecking order than the imported stars and often ignored by the audience, which arrives only early enough to hear the headliner.

Export.

Australian rock bands' success. Australian rock bands have been touring overseas since the 70s and some have achieved great popularity. Such touring may be supported by their record companies as an important element of marketing recordings rather (unless the band has a very high profile) than as an end in itself. Often, an Australian band makes it into the charts in America or Europe (in March 2000, Savage Garden and Human Nature in the US, Tina Arena in France).

Less success for groups in other styles. Within the subsidised sector, few musical groups have set out to establish themselves as viable international artists – i.e. artists with established international reputations touring regularly for fees that cover all costs and salaries. A notable exception is the Australian Chamber Orchestra, which now depends for its existence on a substantial element of overseas touring; the ACO was identified by the Nugent Committee as a company which should seek "global' status. The Song Company is heading in the same direction. Generally, touring of classical and jazz groups has not been planned in such a way as to achieve such an outcome. Assuming musical quality, this is a matter of effective management. The rising consciousness of global opportunity and increasing demands by funding bodies may change the game (see below).

Success of individuals. There is a good number of individual Australian musicians who have established international careers.

Some successful individuals and small groups reside overseas. It is not uncommon for successful popular bands to base themselves or some of their major activities such as recording, overseas; export benefits may be lost. Opportunities for Australian recording studios diminish. Similarly, many internationally successful classical musicians, and some in jazz, set up residence overseas in order to further their international careers. All or part of their contribution to Australian performance is lost. The more active and vital the Australian scene, the less the temptation to live elsewhere. However, it is difficult to see how we could fully contest such advantages as lie in residence within the much larger markets elsewhere.

Commonwealth support policies. The Australia Council Music Fund has just released a new funding policy which may challenge the continuing failure to act purposefully to create international careers for Australian musicians in other than popular styles. (See page 13, this issue.) Also, a new Department of Foreign Affairs and Trade (DFAT) initiative, the Australian International Cultural Council, is looking to a more focussed effort at international projection. Generally, DFAT initiatives build profile for Australia rather than its artists' international careers, but this one may be different. Another DFAT entity, Austrade, has supported overseas promotional efforts mainly for rock bands.

Exporting the national identity. An issue that arises in public policies for support to the export of Australian music and arts, whether through live or mediated performances, is the priority given to using them as a vehicle to promotion of a "national identity'. This is taken to mean a distinctive – unique – identity based on local artistic creation. There is pressure in funding agencies to support artists whose work is thought to manifest such an identity, and criticism of support to others who do not. Questions arise. What is this identity? How is it manifested? Is it not also part of our identity that we are excellent in disciplines shared internationally: tennis, swimming, mainstream classical music? What interests the market? It is possible that the more distinctively different the national identity and its artistic expression, the less our foreign audiences will share in it and therefore, probably, the less their comprehension of it and demand for it. But to succumb to those preferences is to yield local artistic autonomy to the homogenising influence of a global audience. On the other hand, on occasion foreign presenters say that they would like to present something from Australia that is "different' and "Australian' rather than similar to art they can source elsewhere. It is interesting that the Dutch have decided that the distinctive local elements of Dutch culture (which of course in their case involve a language which no-one else understands!) are for a Dutch audience; their international activities are to be treated in quite a different way.

Performing the international repertoire. When we participate in international art forms (e.g. the standard classical music repertory) we play to an audience already knowledgeable about them. Our problem is that we often have to overcome a prior assumption that Australia is a European or American province and its musical performances are bound to be second-rate.

Overcoming the officially promoted image. Australian tourist authorities generally market the country with images of wide open spaces and prawns on the barbie, rather than as a sophisticated country excelling in the arts. This has proved an additional handicap for Australian companies attempting to build audiences overseas – so much so that one company whose name identifies it as Australian has seriously considered changing the name. (I recall at the beginning of the 80s seeking advice in the USA for an ensemble as to whether it should name itself so as to promote its association with Australia. The response favoured such a name on the grounds that Australia was regarded positively and that the identification would at the least quickly identify the group. Perhaps it's a different story if the objective is to establish a group at the upper levels of the international hierarchy in a market that assumes Australia is a provincial home to barbecuing prawns.)

Writing for the market. In the context of exporting music (overseas or to tourists), the issue can arise of writing to serve the taste of a particular market (rather than attempting to market that which the composer wishes to write). While this idea is comfortable in the pop music world, it is subversive of the ethos of "art' music.

Foreign regulations. Australian artists can be subject to restrictive regulations by foreign governments. This may constrain their abilities to establish international careers.

Funding generally. International concert touring is generally subsidised by affluent western countries through funding of inter-country travel expenses for their own nationals. Although usually, local costs are covered by the host country or earnings there, in some cases, artists' fees or other costs will also be covered by the originating country, especially when the tour is to a markedly less affluent country. Most European countries spend more on such subsidy than Australia. To that extent, in some ways it is easier to import a foreign artist to Australia than to export an Australian artist.

Education

Export.

Exporting to balance the domestic budget. Australia "exports' music education by selling places in its tertiary music institutions to foreign students. With the slow strangulation of tertiary music (and other) education caused by reduced government funding generally, exacerbated in some tertiary institutions by poor financial management, there is pressure on music schools to balance their budgets or sustain their programs by admitting full-fee-paying foreign students. Some are actively recruiting overseas, especially in Asia. Student bodies are becoming more ethnically diverse.

Effects of foreign music students. The influx of foreign students has its positive aspects: financial contribution to sustaining the music education institutions, cross-cultural interactions, positive connections between foreign and Australian students after the former have gone home and so on. On the other hand, the foreign students often face language and cultural difficulties in Australia and some do not do well in their courses. I know of one institution which is rather too forgiving of foreign students at exam time, not wishing to lose the fee income. It would be interesting to know whether in general the presence of foreign students tends to raise or lower educational standards.

Imports.

Foreign study: we gain and lose. Here we refer to "importation' of education by purchase of instruction overseas by Australian students. With the greater ease and lower cost (historically speaking) of travel, many of the better music students or young professionals opt for overseas study, whether formal or informal, after graduation. Some return, bringing their new skills and ideas to enrich the local scene. Some, finding a larger world with more opportunities and money, do not – although it's probably true that most hang on to their Australian origins and visit regularly, often including professional work while here.

Bringing them home. Australia's dilemma of small population and geographical remoteness from the large population centres of Western culture is immutable, and a handicap in retaining talented artists now as always. The strategy to ameliorate the problem is to have a very rewarding arts scene here, artistically and financially. We only go half way, with arts subsidies much lower that in Europe and corporate support much lower than in the USA.

GLOBAL TRADE IN GOODS

It is important to distinguish between global trade in goods, in services, and in intellectual property because they are treated differently under World Trade Organisation regulations.

In music, the trade in goods traditionally is in sheet music, musical instruments and recordings.

Sheet music

Australia is probably a net importer of sheet music. There seem to be no figures available showing local production, exports or imports. We can speculate that exports are negligible and imports relatively substantial, if only through a visit to the shelves of the local music store.

May depend on subsidies. The nature of physical publication of new classical music depends to a degree on public subsidies: in Germany, for instance, it is still customary to publish on a printing press; in Australia and many other countries, very little new classical music is so published, and rather is photo-copied. This is because unless the publication is to be used for educational purposes the sale is too small to cover regular printing production costs.

Internet sales. It is possible to order physical scores from on-line catalogues with delivery from points anywhere in the world. It can be expected that this trade will grow. (Brisbane company Morton Music is attempting to set itself up as an on-line global source of choral music.)

Future trade in sheet music. The scale of the global trade in (physical) sheet music into the future will depend upon the extent of survival of musics dependent upon a musical score for their performance. It also depends on the vexed issue of the spread of musical literacy, hence music education, and the level of participation in music-making by musically literate people.

"Publishing' redefined. Publication of sheet music was once music publishers' main business. Now, especially in the commercial industry, it is only one form of exploitation of copyrights in musical works, potentially a much larger source of revenue especially in a global market. It is still the main business of some smaller specialist publishers, mostly of classical music or educational music. The catalogue of music printed in Australia is mainly confined to music for training or educational purposes, e.g. as associated with AMEB requirements, for which there is a focused but domestic market.

Embodies copyright. Sheet music may embody copyright material. The trade then is in copyright as well as in physical goods. Some sheet music embodies works in which copyright has expired due to the death of the composer, or does not exist because it has no identifiable author (e.g. folk music).)

Musical instruments

Australia is a net importer of musical instruments. Exports AU$4.2 million, imports $84.3 million (1994-5; ABS)

Australian production. Factory-based production of acoustic musical instruments in Australia has essentially ceased; the only exception I know of is Maton guitars. Otherwise, only hand-made instruments are produced. This production is culturally valuable but economically trivial.

Computer-based instruments. There is an affluent-country shift to production of computer-based instruments produced by large specialist companies, most of which do not produce acoustic instruments. These also are not manufactured in Australia and so are imported. Research into new instruments is dominated by US, Japan, Europe; in the latter, some research is subsidised. There is a small amount of research in Australia.

Recordings

Australia is a net importer of physical recordings — e.g. CDs. Value of exported recordings AU$4.4m, mostly to New Zealand; value of imports $70.7m. These figures are from 1991-92 and doubtless have changed significantly since. (The Australian Music Industry. An Economic Profile. Unpublished report. Price Waterhouse, 1993)

Intellectual property rights. Most recordings embody musical works in which authors and/or publishers and/or others own copyright. This trade therefore is not only in the physical goods, but in the copyright.

Partly supplanted by trade in copyright. This section of the paper deals with international trade in goods: here, physical recordings. International trade in physical recordings is being replaced by trade in copyright (intellectual property) in recordings, with the physical item then produced in local factories by a subsidiary of the major company owning copyright, or under contract by another company. Obviously the international trade in physical goods continues, especially with countries that do not manufacture recordings.

On-line purchase of physical recordings. There is rapid growth in purchase from on-line catalogues from sources which could be anywhere in the world; physical recordings are then dispatched to meet the orders. Whether this mode has a long-term future in the face of on-line delivery of the music is a matter for speculation. It has the advantage for purchasers of potentially escaping local sales taxes, but the disadvantage of the cost of custom-freighting.

Import substitution. In the early 70s, the Commonwealth government introduced requirements for radio and television broadcasters to broadcast at least a minimum percentage of music or television programs respectively, produced in Australia with Australian artists. One consequence of the Australian content requirement on music broadcasters was the opportunity and need for Australian record companies to produce more and better recordings of Australian musical works and performances. The outcome firstly was that a percentage of the Australian market for recordings moved from sale of imported recordings of foreign artists to sale of local productions. In the early 90s this took about 12% of the Australian market, compared to 83% for foreign popular recordings and 5% for classical music.

Export of physical sound recordings. A further outcome was the development, from this domestic base, of the export of recordings of Australian artists. In addition, local record companies may produce recordings of foreign artists from foreign master recordings, and export them. Export figures therefore do not necessarily indicate the extent of exposure of a country's own artists in foreign markets. They may be of greater economic than cultural relevance for the exporting country.

Piracy. There is a growing international trade in pirated recordings. These are manufactured using stolen masters (these days, the publicly issued digital CD suffices), usually in low-cost countries with poorly enforced copyright regimes so that no royalties are paid. They may also reproduce the packaging of the legal product. They are exported to more affluent countries where they undercut the price of the legal product. In Australia, the recording industry warned that repeal of the legislation banning parallel importation of sound recordings (so that holders of copyright in a recording for the Australian territory could no longer prevent importation of copies of the recording from other copyright territories) would open the way for entry of more pirated recordings. Piracy is regarded as a problem in all the affluent countries; most do not allow parallel importation and its effects on piracy in Australia are a matter for speculation. Pirated recordings appear to take a growing percentage of the Australian market. In Australia, the Music Industry Piracy Investigation Board has been set up to combat piracy. There have been major prosecutions for piracy in recent years. The Commonwealth Government has been keen to identify itself with successful prosecutions for piracy, given the outrage in the music industry over its promulgation of the parallel imports legislation.

More later. Other aspects of the recording industry are covered in the GLOBAL TRADE IN INTELLECTUAL PROPERTY section, and the industry will be dealt with as a whole in the next issue of Music Forum.

GLOBAL TRADE IN SERVICES

Regulation. The main instrument of regulation is the General Agreement on Trade in Services, negotiated under the auspices of the World Trade Organisation.

Financial transactions

Royalty collection. Technological developments are increasing the effectiveness of royalty collections and distributions globally.

Risk capital. Global record companies are the major source of risk capital for record production around the world.

World market for capital. The emergence of a world market for the movement of capital has facilitated mergers between record companies and between record and media companies, resulting in an unprecedented concentration of ownership.

On-line payments for retail transactions. Ability to pay on-line via credit card for on-line purchases of sound recordings has facilitated the growth of music "e-tailing'. An inhibitor is consumer uncertainty about the security of on-line transactions.

Education

Music education services are being sold in Australia to foreign students at undergraduate and post-graduate levels. Australian students pay for music education abroad, usually at post-graduate level. See the section MOVEMENT OF PEOPLE.

Advertising.

Australian content. The former requirement that advertisements shown on Australian free to air television must be locally produced has given way to allow broadcast of up to 20% produced elsewhere. There is pressure to abandon totally the local content requirement. This would result in further reduction in local production. Composition of advertising jingles is a staple source of income for Australian film composers and also for recording studios, who would therefore be directly disadvantaged. The film industry argues that the advertising industry has been a crucial source of training and earnings for Australian film personnel, and that there would be serious ramifications if it were lost. A less successful film industry also would have negative consequences for Australian composers, musicians and recording studios. It should be noted that advertisements produced in e.g. the USA have the same comparative advantage as television programs produced in the USA: the costs are totally amortized in the US market and they can then be sold for broadcast here and in other countries at a price much less than the costs of domestic production.

Broadcasters and narrowcasters

Satellite broadcasting. Television or radio broadcasts are delivered by satellite and in some areas by cable to territories that may encompass many nations and to greater or lesser extent escape local regulation. Programming must serve local tastes and so may require some local content but may also deliver the global hit parade.

Internet broadcast. Broadcasts are also now available over the internet and the services obviously have a global reach. There is no question here of global reach. Internet broadcasts effectively by-pass licensing and regulatory systems applied to local wireless and cable systems.

Multiplication of channels. Pay cable and satellite television bring a multiplication of channels and choices of scheduled programs. In the future, users will be able to connect interactively with service providers to control both choice and schedule, choosing from vast catalogues. As an intermediate step, it is possible that any particular program is scheduled for multiple starting times to suit viewer needs. Although so far forbidden by the Australian government in favour of the alternative high definition television, free to air channels could carry a number of programs simultaneously on one already licensed "carrier' beam. All of this is possible also for radio.

Global market for content. The need to feed multiple channels requires international purchases of content Even where the local cable network is locally owned, its sources for content must include large or global media companies.

Fragmentation of audience. The multiplication of choice coincides with and feeds a fragmentation of the audience. Specialised programming can be produced for and directed to specialised audiences (narrowcasting).

Viable if global. The audience for a narrow interest may be too small locally to make satisfaction of its needs financially viable, but may be viable if the program reach is global. There is a potential for specialised Australian content suppliers to become more viable if they can reach a global audience.

Loss of shared culture. If the audience previously served and brought together by a relatively small number of free-to-air channels nationally is able to break up into narrow interest groups, there could be a significant loss of shared culture and sense of community. The effect could be even stronger when content sources are foreign.

Local content regulation. Some countries, including, as noted, Australia, require their music broadcasters to assign at least a prescribed minimum percentage of music broadcast time to local artists. In Australia this requirement laid the foundation for the revival and then development of the local recording industry. The industry is basically now self-regulated, although with the Australian Broadcasting Authority acting as a weak monitor of its actions. These local content regulations serve to contain slightly the importation of foreign music and to make room for local artists. However, they could be under threat from initiatives taken by the USA in World Trade Organisation negotiations. They could also be made irrelevant by other modes of music delivery which are not susceptible to such regulation. This will be the subject of an article in the October Music Forum.

Important to retain the free-to-air broadcasters. It is less defensible to insist that service providers include at least a minimum local content if consumers pay for and choose programs directly (i.e. if consumers will not choose and pay for local productions, why include them?). It also may not be feasible. While the cable network is physically within a country, and its ownership might lie in the country, frequently there is a separation of ownership and control of the cable network from the providers who transmit content over the network. This means that it is difficult to impose local content requirements on the cable network companies (that would be a little like holding the phone company responsible for the messages transmitted down its cables), or upon content providers based outside the country. (The Australian government has required cable TV providers to invest a percentage of their income on Australian drama productions, but due to legislative flaws this has not yet taken effect and so has not been tested.) On the other hand, governments can oblige free-to-air broadcasters to include local content as part of the price of the licence to use broadcast spectrum. It therefore is in the interests of those who wish to give some measure of protection and support to local culture to ensure the continuation and viability of the free-to-air broadcast services.

Effects on live performance. Fears have been expressed that a further multiplication of choice, coupled with, or with the alternative of, very high quality home reception, will reduce audiences for live performances. Others point to the survival of live audiences through other technological innovations e.g. introduction of film, television, sound recordings etc. It can be shown that in some cases media exposure increases interest in live performances. But as noted above, Nugent has claimed that the availability through the media and other means, of performances by the globe's best artists depletes the interest of local audiences in local artists and threatens the financial viability of local performing arts companies.

Entertainment

The globalisation of entertainment services is described in part in the section MOVEMENT OF PEOPLES, especially under Tourism, and Concert Tours by Musicians.

Concomitant internationalisation of artist management services. Concert touring is organised by artist managements or tour managements working within self-defined territories. The largest work more or less globally (depending on the map of audiences for the genres represented). Others work continentally, regionally, nationally, locally. It is my understanding that while in theory it is possible for artists to be promoted and tours organised by mail, phone or internet, effective action still requires on-the-ground networking and contact. Consequently, although greater ease of travel and communications have expanded the territories covered by some managements, it is customary to form working alliances with local sub-agents in territories where a management has no direct presence.

Recording studios. Australian recording studios are providing services not only to local musicians, record companies, advertising companies, film and television companies but also to foreign film and television companies. Conversely, as noted elsewhere, some internationally successful Australian artists purchase the services of studios and record producers in other countries.

GLOBAL TRADE IN INTELLECTUAL

PROPERTY

Musical scores

On-line publication. Both hand-written scores and engraved scores have been largely supplanted by computer-notated scores. Since scores can be held digitally in computers, they can be transmitted via the internet and thereby published.

On-line delivery. While the performing musician needs a physical score, the delivery of the score can be made on-line. The trade is then in the intellectual property bound in the copyright in the work. It is possible that on-line delivery could become an important medium of international trade in "sheet music', but there are disadvantages for ordinary retail customers because of the limitations of home printing (e.g. paper size and quality). I am not aware of the current extent of on-line delivery of scores, but suspect that it is not yet much offered to or used by ordinary retail customers. (What is already more common is on-line sale of physical scores.)

Opportunity for composers. Composers can take advantage of the possibility of on-line delivery of scores to self-publish and deliver scores directly to customers on-line, by-passing any intermediaries. As with self-publication of recordings (see below), the problem is one of marketing.

Music information centres. Some of the national music information centres, whose common task is especially to promote the works of their countries' contemporary classical composers, are moving to scan works digitally and to make these available on-line. Once the scanning costs are paid (and these are not incurred at all when composers present scores on computer disc), the costs of circulating scores will be much reduced, and their availability globally much enhanced. Members of the International Association of Music Information Centres are also considering setting up joint catalogue facilities on-line. These organisations might be capable of overcoming the printing quality problems noted above.

Sound recordings

Following are some simple points. Please see the article in the next issue for a much more complete and complex analysis..

Value of Australian trade in royalties. In 1991-92, the trade in royalties and services was $AU$154m in imports, and $92m in exports, for a balance of trade deficit of $62m (Price Waterhouse).

The trade no longer requires a physical recording. If there is no physical recording (e.g. when the recording is delivered on-line), the trade is then only in the intellectual property: the work, and the recording, and in some countries the recorded performance. This trade is consummated through royalty payments.

Companies trade in copyright. As noted, international trade in physical recordings is being replaced in the "first world" by trade in copyright in recordings, with the physical recording produced locally. This is an international trade between record companies.

Internet download. There is a rapid expansion of global trade in recorded works delivered on-line over the internet. This then is a trade between individual consumers and record companies and/or on-line "e-tailers' and/or the authors or performers of the musical work. The trade is limited at this point by a number of factors, including these: consumers are not yet accustomed to purchase by this modality; some consumers would prefer to buy a physical recording or to have the social experience of visiting a physical retail store; importantly, the downloading time is too long. The future addresses these factors as follows: consumers will become accustomed to such trade; feeling within the music industry is that retail and etail will co-exist, retail will lose market share and will have to enhance somehow the attraction of visiting the physical store; downloading time will be reduced by expansion of bandwidth and further developments in compression.

Artists sell direct on-line. It is possible for musicians and composers to sell their own recordings from their own web-sites directly to customers globally, with delivery on-line. This pre-empts the post-mastercopy production costs for a physical recording. Payment can be made on-line, if the customer is confident of security. The major practical difficulty is in finding a way to let potential customers know of the existence of your web-site among hundreds of thousands of others. There are attempts to address this problem through artist cooperatives that establish a website, or by working through small e-tailers that develop catalogues including unknown, as well as known, artists: and thereby to have some extra marketing power.

On-line marketing. Global marketing of sound recordings on-line is supported by visuals and print information, added to artist or company websites.

Audio-visual on-line. As the expansion of band-width permits, it will become increasingly practicable to deliver video/musical performances on-line, thus trading in the intellectual property embodied in both visual and aural imagery.

In-store kiosks. In Japan and possibly elsewhere, there are business ventures setting up "kiosks" in retail record stores, from which customers can order recordings from a catalogue; the music is then delivered on-line and embedded in a disc in the kiosk. Obviously there is a potential for customers to fill a disc with any selection of tracks. The on-line sources can be anywhere in the world, so there is still a trade in royalties, with the kiosk replacing the local production plant.

Piracy. The record industry is very activated by issues of piracy via the internet, and is seeking extensions of international property rights through various international instrumentalities. It also attempts to fight on-line piracy or unauthorised copying through various technological strategies. The evidence suggests that the majors lose income to pirates of recordings with international audiences. On the other hand, according to Kretschmer, Klimis and Wallis (The Global Music Industry in the Digital Environment: A Study of Strategic Intent and Policy Responses (1996-99), a report for UK Economic and Social Research Council), independent companies might benefit from the spread of their music even though illegal.

Record companies. There are very large transnational companies ("majors') and small independent companies serving local territories. There are also local branches of the majors. Artists generally sign with local companies, but in the popular industry especially, aspire to global distribution through the majors.

Vertical integration. The major record companies may be part of larger conglomerates, and themselves are taking over other phases of the sequences that takes music from creation to the market, e.g. publishing, distribution. They also integrate horizontally e.g. with internet service providers, phone companies, cable networks.

Copyright collection societies threatened. The majors are seeking in various ways to handle all copyright transactions and to sideline the copyright collection societies. This probably further exacerbates the disparity in negotiating power between artists and record company.

Global market. Majors create and service a global market. They have chosen to concentrate upon Anglo-American pop music. There is some minor access for local musics. There is a reaction to this globalisation of musical style: a renewed emphasis on local style. A very small amount of the latter may reach a global audience, and reap the financial rewards. This possibility affects the aspirations of the local artists, and leads to modifications of style to address the supposed tastes of a global audience.

Information

On-line delivery of information. A massive amount of music-related information – e.g. concerning trade, technology, musicology -- is available on-line. There is consumer resistance to paying for information received on-line, and to that extent perhaps this cannot be called "trade'. Some of it assists trade, whether more directly or less, e.g. on-line catalogues of recordings, books.

Education

Curricula. There is international trade in curricula, teaching methodologies and teaching materials. These may be delivered in physical form, or intangible form on-line, through classes and lectures, or through on-site consultancies with foreign experts.

Internet delivery of tertiary education. There is an apparently inexhaustible global demand for tertiary education. Universities are forming consortia with each other and with media organisations such as News Ltd. to offer high quality tertiary education on-line. This trend probably will be given added momentum by the increasing difficulty in finding state funds to support traditional forms of tertiary education. The societal consequences of global provision of tertiary education to a global student body probably can hardly be anticipated, but they could be enormous.

Former colonies, non-Western countries. In asserting intellectual independence, some music educators in non-Western nations in for instance Africa and Asia reject Western music and music teaching methodology in favour of traditional music and its teaching methods. Some are happy to see both used, side by side, since this gives students a greater repertoire of financially negotiable skills. The issue is felt keenly by some in former European colonies.

Interest in multicultural curriculum. In many Western countries especially, there is a strong current interest from the music education establishment in teaching music, or about music, from other cultures. As noted under Migration above, the interest arises often from a wish to recognise and serve a local population, formerly relatively homogeneous, but now diverse due to immigration. However, the curricula often go beyond representation of ethnicities present in the population to a broader range of cultures. The impetus for this, presumably, is the greater awareness of and communication with other cultures generally. Relevant issues: if a broad range of musics is to be introduced into the curriculum, is there time to give a real understanding of any of them? Is it better to teach one or a small number of musical styles in depth, or a large number more superficially? Is the motivation here socio-political or musical?

RELEVANT TECHNOLOGY

The Internet

As a commercial medium: summary. The music industry's use of the internet has been addressed in most sections of this paper. In brief summary, the main issues are noted and a few additional comments added. Sales of scores, recordings, related multimedia such as music videos, and broadcasts are now possible on the internet, both for physical goods (CDs etc) and for on-line delivery. Advantages for customers include avoidance of local sales taxes, avoidance of local censorship where that exists, access from the home computer terminal to vast choice. Disadvantages at the moment include slow on-line downloading due to lack of bandwidth, uncertainties about deliveries of physical purchases, and apprehension about the security of on-line transactions. Artists can use the internet to sell direct to customers all over the world but, lacking capital, have difficulty in attracting attention to their internet sites. The power of the internet as a sales medium is forcing a major restructuring of the music industry.

Direct artist collaboration. The internet enables direct collaboration of artists geographically remote from each other in real time. For instance, it has been used for public performances of simultaneously improvising musicians in Sydney and European cities, or New York and San Diego.

An equaliser? The internet provides equal opportunities to utilise an incredible wealth of information for those with access to the equipment and a phone line, whether private or publicly provided, regardless of geographical location. However, in reality, vast numbers have no access. A very large percentage of the world's population has never made a phone call because there is no access to a phone system. The internet therefore may in actuality widen the gulf between rich and poor globally.

Aids to creative production

Market dominance of a small range of computer tools? Just a hypothesis: if there were global market dominance of a small range of music production tools (software and hardware) there could be a homogenising influence on the output.

Computer music production is democratising. The costs of computer music production and recording tools is steadily falling. Also, while the executant skills required for professional competence on a traditional instruments take years to acquire, and in some genres considerable private financial resources, it is possible to create music on computer with only very modest development of fine motor skills. This makes it more feasible for lay people to produce music to something like a professional level, and for musicians to record their own performances to a level that can satisfy the market. Musicians in affluent countries therefore can produce master recordings independently of professional recording studios and record companies. Musicians in poor countries also may have greater possibilities to record.

Lack of equipment a handicap. In a market in which music production is so dependent on computers, those individuals or countries lacking the equipment are disadvantaged. There is an argument for government provision of universal access to computer capacity for music production as for other forms of information and production (through local libraries, for instance).

ECONOMIC IMPERATIVES

Forced by globalisation. Economic rationalism is forced by the globalisation of markets. The products of industries in affluent countries are obliged to compete with the products of less wealthy or poor countries whose costs are low by virtue of low wages inter alia and which gain a further market advantage because their social welfare programs are relatively meagre and so add little to costs through taxes. The consequent need in affluent countries to reduce costs for local industry creates an ethos which rewards governments for cutting costs. There is pressure to reduce the size of the public sector and lower taxes. Subsidy generally becomes a negative concept.

Governmental economies and arts subsidies. Governmental fiscal constraint limits the funds available for subsidy to anything. It appears that subsidy even to core activities such as education and health is inadequate and shrinking. At the same time, in an increasingly complex world, the number of sectors and activities attempting to secure subsidy multiplies. The arts sector is an expanding segment of the services sector, itself the most rapidly expanding sector economically and as an employment generator. This expansion continues in Australia despite stasis in arts subsidies: which is both good news because it shows self-reliance, and bad news because existing subsidies are spread ever thinner and indeed most Australian major performing arts companies consequently have come close to bankruptcy (Nugent Report).

Changed nature of arts management. Faced with an expanding sector, increased artistic competition, costs that rise faster than inflation, inabilities to create efficiencies in a labour-intensive industry, and subsidies that are static because of the global pressures described, arts companies are pushed to become financially self-sustaining. Business and marketing managers increasingly dominate artistic directors.

Affects the nature of art. The dominance of business concerns and the lack of subsidies foster populist programming and constrain artistic experimentation by arts companies.

Global threat to subsidies. The decline in support for subsidies in various