Briefly, the first meaning of music production concerns working with musicians to get the best performance of a song, or other piece of music. A recording engineer will take care of getting the best sound in the recording process.
The second meaning of music production is where a composer or producer creates sounds using samples, synthesizers, digital, electronic and acoustic instruments, and the sounds are manipulated and blended to optimize the music being recorded. The emphasis in this case is on working with the sounds rather than musicians, although musicians may be used in addition. The producer in this case will often engineer himself or herself.
Music production has no relevance in live performance. Here, a conductor, music director or the performers themselves will determine how the music should sound. In the recording studio however, it is more difficult to create a recording that will please potential listeners and buyers than it is to please an audience in a concert hall or other performance venue. One key point is that a recording will be played many times. If there are any imperfections, then they will be heard again and again. The music production process must ensure that imperfections are minimized.
Also, the market for recorded music is very competitive. The purpose of music production is to create a product that will compete effectively, and please potential buyers as much as possible. Live music takes place in real time. In music production, as much time as required (or can be afforded) can be spent on making the recording as good as possible.
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