The Fall of the CD Market

Music Stores, HMV and Apple

CD sales hit an all time high in the 90's and didn't look like falling. But every product has its peak and sales began to decrease horrificly in the CD market. The rise of the internet found that CD sales began to decrease, this was due to online downloads which became easier to purchase than bread. In the Noughties, music downloads became the 'cool' thing to do, and this trend has not stopped since. Apple brang out iTunes and this opened up a whole new market, the music industry of CD's fell and didn't look like it was ever going to pick itself up again.

Then came illegal downloads, people set up websites to 'share' music. There idea of sharing music around the globe assisted a collapse in the music industry as a whole. Record labels were losing money like they have never seen before. Security online has helped some illegal download websites to be shut down but it will never be stopped. Now shops such as HMV are finding it hard to keep sales alive but they are doing there best to keep the CD market alive.

The novelty of a physical CD has warn off and now people will happily pay for music and not physically get anything for their money. iPods and MP3 players are the reason people now want to buy music online, they store music on them with out any need for a CD, and to be honest they are a lot more feasable than a CD and a Walkman.

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%

Marketing a Music Video

Artists can use multiple ways to promote/market their music video. A very common method of marketing is called Viral marketing; this form of marketing is used worldwide. Viral Marketing is where the video is uploaded to a site, such as YouTube and Vevo. Sites such as these, are a great source of marketing for artists and help them promote their music for free; a lot of unknown artists us YouTube and Vevo to create a fan base for themselves. The artist that we create as a group will want to use Viral Marketing as one of the main sources of promotion as it is cheap, easy, free and very effective. In addition to Viral Marketing, using websites such as MySpace and Twitter; social networking sites assist artists as they can upload their music on to these sites and start creating a fan base. Many artists use social networking sites to promote new music, Kanye West, Jay-z and Rihanna all use MySpace to let fans see exclusive music. Once tracks are known by fans and recognised, companies such as Apple and HMV will pick up on this and begin to sell their track; Apple use software called iTunes to sell music on whereas HMV sell hard copies in store. Album covers are very important when selling as even on iTunes you purchase the album cover as well as the track; iTunes also allow you to purchase the video for many songs. Once the track is known and the artist has picked up fans, the artist will do gigs to further the artists reputation and pick up more sales and one day become a global phenomenon.