Monday, 8 November 2010

The Music Industry

The music industry sells compositions, recordings and performances of music to the public. Music is produced and sold by two groups; the act and the organizations that operate within the industry. In the late 19th century, the industry was mainly controlled by publishers of sheet music; sheet music is a hand-written piece of music on a hard copy of paper that uses music notes to display the music. Technology improved and music was moved to audio in the 20th/21st century; this was due to Thomas Edison, he invented the phonograph which assisted the industry in recording music and allowed them to play music via radio. The record industry then replaced sheet music publishers as the largest force. Record labels were then introduced e.g. Columbia Records. Labels came and went, but in the 1980s the "big 6" were formed; EMI, CBS (Sony), BMG, PolyGram, WEA and MCA (Universal).

We entered the 21st century and technology was improving daily. Consumers were spending less and less money on CDs, Vinyls, cassettes and digital downloads, they eventually dropped 25% world wide; this was due to the vast number of illegal downloads. Illegal downloading became a 21st century phenomenon, everybody seemed to be doing it. Websites were being created with a 'front' (selling things to make the website legal), but allowing music sharing, for free! Napster was the leading site for illegal downloads, in 2001 Napster was shut down, but this was just the beginning; one website closes down, 2-3 websites open. This was a massive issue for the music industry as a whole.

The opening of the iTunes store in 2003 lowered the rate of illegal downloads due to easy access of music. Digital sales improved but still have not recovered the loss due to illegal downloads.

In 2010, a study shows that MNCs (Multi National Companies) such as Wal-Mart and Best-Buy retail more music than stores that just sell music. Due to the massive decline in the sales of music, artists these days rely on live performances and merchandise to bring in the majority of their money; this has made artists more dependent on labels and has created a market for record labels.

Changed in the industry has given consumers a wider variety of choice and at an extremely low price.

Universal account for 25% of the industry, closely followed by Sony at 21%, Warner and EMI also have large shares. The rest of the market falls down to independent record labels.

Album Sales and Market Value

# Country Album Sales Share Share of World Market Value
1 USA 37–40% 30–35%
2 Japan 9–12% 16–19%
3 UK 7–9% 6.4–9.1%
4 Germany 7–8% 6.4–5.3%
5 France 4.5–5.5% 5.4–6.3%
6 Canada 2.6–3.3% 1.9–2.8%
7 Australia 1.5–1.8% 1.5–2.0%
8 Brazil 2.0–3.8% 1.1–3.1%
9 Italy 1.7–2.0% 1.5–2.0%
10 Spain 1.7–2.3% 1.4–1.8%
11 Netherlands 1.2–1.8% 1.3–1.8%
12 Mexico 2.1–4.6% 0.8–1.8%
13 Belgium 0.7–0.8% 0.8–1.2%
14 Switzerland 0.75–0.9% 0.8–1.1%
15 Austria 0.5–0.7% 0.8–1.0%
17 Russia 2.0–2.9% 0.5–1.4%
18 Taiwan 0.9–1.6% 0.5–1.1%
19 Argentina 0.5–0.7% 0.5–1.0%
20 Denmark 0.45–0.65% 0.5–0.8%

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