collapse of record companies not the collapse of music

Worldwide Recording Industry Revenues from Physical: $33.1 billion (2006), $30.6 billion (2007), $27.5 billion (2008), $24.6 billion (2009), $22.2 billion (2010), $19.9 billion (2011)

digitalmusicnews | The recording industry has been fractionalized over the past decade. The touring sector suffered its worst decline ever last year. And music publishers are struggling to keep things flat.

So how is the broader music industry somehow worth $168 billion? The answer comes from a broader list of music-related sectors, including those tied to consumer electronics, radio advertising, and musical instruments.  

   

Take a look at this 2010 estimate from global trade group IFPI, which pegs the figure at $167.7 billion, with radio advertising squarely in the lead (larger graph here).  Recognize this business?

Forbes | From the 1960s on, the LP album gave the music industry a main product to push, and business was good. In the 1990s the widespread acceptance of the Compact Disc format gave a giant boost to the music industry in album sales. By 2007, over 200 billion CDs had been sold worldwide. But sales of the long playing album have decreased dramatically. In 2000, U.S. consumers bought 785.1 million albums; in 2011, that figure was down to 330.57 million. In 2000, the ten top-selling albums in the U.S. sold a combined 60.4 million copies; in 2011, the top ten sold just 20.2 million copies.

While accounts of the “death of the music industry” have been greatly exaggerated, no one can deny that the music industry is experiencing major changes. For decades the industry relied on a business model of selling massive amounts of copies of a few albums to finance the high-cost of producing records, plugging songs to radio, and overcoming the losses from their other projects. Record companies used the clout of having access to recording studios and access to airplay on the radio to their advantage in contract negotiations with artists, which leveled their risk intake of the enormous costs and influence needed to both produce and push a record.