Product Code Database
The music industry are individuals and organizations that earn money by Songwriter and musical compositions, creating and selling recorded music and sheet music, presenting live music, as well as the organizations that aid, train, represent and supply music creators. Among the many individuals and organizations that operate in the industry are: the and who write songs and musical compositions; the , , Conducting, and who perform the music; the , , Recording studio, Record producer, , Record shop and digital music stores, and performance rights organizations who create and sell recorded music and sheet music; and the talent agent, promoters, , road crew, and audio engineers who help organize and sell concerts.
The industry also includes a range of professionals who assist singers and musicians with their music careers. These include , artists and repertoire managers, , entertainment lawyers; those who broadcast audio or video music content (Satellite radio, Internet radio, broadcast radio and TV stations); and Music criticism; DJs; music education; manufacturers of musical instruments and music equipment; as well as many others. In addition to the businesses and artists there are organizations that also play an important role, including musician's unions (e.g. American Federation of Musicians), not-for-profit performance-rights organizations (e.g. American Society of Composers, Authors and Publishers) and other associations (e.g. International Alliance for Women in Music, a non-profit organization that advocates for women composers and musicians).
The modern Western music industry emerged between the 1930s and 1950s, when records replaced sheet music as the most important product in the music business. In the commercial world, "the recording industry"—a reference to sound recording and selling the recordings–began to be used as a loose synonym for "the music industry". In the 2000s, a majority of the music market is controlled by three major corporate labels: the French-owned Universal Music Group, the Japanese-owned Sony Music Entertainment,Sony Corporation announced October 1, 2008, that it had completed the acquisition of Bertelsmann's 50% stake in Sony BMG, which was originally announced on August 5, 2008. Ref: and the American-owned Warner Music Group. Labels outside of these three major labels are referred to as independent labels (or "indies"). The largest portion of the live music market for concerts and tours is controlled by Live Nation, the largest promoter and music venue owner. Live Nation is a former subsidiary of iHeartMedia, which is the largest owner of radio stations in the United States.
In the first decades of the 2000s, the music industry underwent drastic changes with the advent of widespread digital distribution of music via the Internet (which includes both illegal file sharing of songs and legal music purchases in online music stores). A conspicuous indicator of these changes is total music sales: since the year 2000, sales of recorded music have dropped off substantially, while, in contrast, live music has increased in importance. In 2011, the largest recorded music retailer in the world was now a digital, Internet-based platform operated by a computer company: Apple Inc.'s online iTunes Store. Since 2011, the music industry has seen consistent sales growth with streaming now generating more revenue per year than digital downloads. Spotify, Apple Music, and Amazon Music are the largest streaming services by subscriber count.
The recording industry produces three separate products: compositions (songs, pieces, lyrics), recordings (audio and video) and media (such as compact disc or MP3s, and ). These are each a type of property: typically, compositions are owned by composers, recordings by record companies, and media by consumers. There may be many recordings of a single composition and a single recording will typically be distributed via many media. For example, the song "My Way" is owned by its composers, Paul Anka and Claude François, Frank Sinatra's recording of "My Way" is owned by Capitol Records, Sid Vicious's recording of "My Way" is owned by Virgin Records, and the millions of CDs and vinyl records that can play these recordings are owned by millions of individual consumers.
Recordings are (traditionally) owned by record companies. Some artists own their own record companies (e.g. Ani DiFranco). A recording contract specifies the business relationship between a recording artist and the record company. In a traditional contract, the company provides an advance to the artist who agrees to make a recording that will be owned by the company. The A&R department of a record company is responsible for finding new talent and overseeing the recording process. The company pays for the recording costs and the cost of radio promotion and marketing the record. For physical media (such as compact disc), the company also pays to manufacture and distribute the physical recordings. Smaller record companies (known as "indies") will form business relationships with other companies to handle many of these tasks. The record company pays the recording artist a portion of the income from the sale of the recordings, also known as a "royalty", but this is distinct from the publishing royalties described above. This portion is similar to a percentage, but may be limited or expanded by a number of factors (such as free goods, recoupable expenses, bonuses, etc.) that are specified by the record contract. and orchestra members (as well as a few recording artists in special markets) are under contract to provide work for hire; they are typically only paid one-time fees or regular wages for their services, rather than ongoing royalties.
When music is digitally downloaded or streaming media, there is no physical media other than the consumer's computer memory on his or her portable media player or laptop. For this reason, artists such as Taylor Swift, Paul McCartney, Kings of Leon, and others have called for legal changes that would deny social media the right to stream their music without paying them royalties. In the digital and online music market of the 2000s, the distributor becomes optional. Large online shops may pay the labels directly, but digital distributors do exist to provide distribution services for vendors large and small. When purchasing digital downloads or listening to music streaming, the consumer may be required to agree to record company and vendor licensing terms beyond those which are inherent in copyright; for example, some services may allow consumers to freely share the recording, but others may restrict the user to storing the music on a specific number of hard drives or devices.
Major, successful artists will usually employ a road crew: a semi-permanent touring organization that travels with the artist during concert series. The road crew is headed by a tour manager. Crew members provides stage lighting, live sound reinforcement, musical instrument maintenance and trucking. On large tours, the road crew may also include an accountant, stage manager, bodyguard, hairdressers, makeup artists and catering staff. Local crews are typically hired to help move equipment on and off stage. On a small tour with less financial backing, all of these jobs may be handled by just a few roadies or by the musicians themselves. Bands signed with small "indie" labels and bands in genres such as hardcore punk are more likely to do tours without a road crew, or with minimal support.
After 15 or so years of the Internet economy, the digital music industry platforms like iTunes, Spotify, and Google Play are major improvements over the early illegal file sharing days. However, the multitude of service offerings and revenue models make it difficult to understand the true value of each and what they can deliver for musicians and music companies. As well, there are major transparency problems throughout the music industry caused by outdated technology. With the emerging of new business models as streaming platforms, and online music services, a large amount of data is processed. Access to big data may increase transparency in the industry.
The use of printing enabled sheet music to be reproduced much more quickly and at a much lower cost than hand-copying music notation. This helped musical styles to spread to other cities and countries more quickly, and it also enabled music to be spread to more distant areas. Before the invention of music printing, a composer's music might only be known in the city she lived in and its surrounding towns, because only wealthy aristocrats would be able to afford to have hand copies made of her music. With music printing, though, a composer's music could be printed and sold at a relatively low cost to purchasers from a wide geographic area. As sheet music of major composer's pieces and songs began to be printed and distributed in a wider area, this enabled composers and listeners to hear new styles and forms of music. A German composer could buy songs written by an Italian or English composer, and an Italian composer could buy pieces written by Dutch composers and learn how they wrote music. This led to more blending of musical styles from different countries and regions.
The pioneer of modern music printing was Ottaviano Petrucci (born in Fossombrone in 1466 – died in 1539 in Venice), a printer and publisher who was able to secure a twenty-year monopoly on printed music in Venice during the 16th century. Venice was one of the major business and music centers during this period. His Harmonice Musices Odhecaton, a collection of chansons printed in 1501, is commonly misidentified as the first book of sheet music printed from movable type. That distinction belongs to the Roman printer Ulrich Han's Missale Romanum of 1476. Nevertheless, Petrucci's later work was extraordinary for the complexity of his white mensural notation and the smallness of his font. He printed the first book of polyphony (music with two or more independent melodic lines) using movable type. He also published numerous works by the most highly regarded composers of the Renaissance, including Josquin des Prez and Antoine Brumel. He flourished by focusing on Flemish works, rather than Italian, as they were very popular throughout Europe during the Renaissance music era. His printing shop used the triple-impression method, in which a sheet of paper was pressed three times. The first impression was the staff lines, the second the words, and the third the notes. This method produced very clean and readable results, although it was time-consuming and expensive.
Until the 18th century, the processes of formal composition and of the printing of music took place for the most part with the support of patronage from aristocracies and Religion. In the mid-to-late 18th century, performers and composers such as Wolfgang Amadeus Mozart began to seek more commercial opportunities to market their music and performances to the general public. After Mozart's death, his wife (Constanze Weber) continued the process of commercialization of his music through an unprecedented series of memorial concerts, selling his manuscripts, and collaborating with her second husband, Georg Nissen, on a biography of Mozart.
In the 19th century, sheet music publishers dominated the music industry. Before the invention of sound recording technologies, the main way for music lovers to hear new symphonies and opera arias (songs) was to buy the sheet music (often arranged for piano or for a small chamber music group) and perform the music in a living room, using friends who were amateur musicians and singers. In the United States, the music industry arose in tandem with the rise of "black face" minstrel show. Blackface is a form of theatrical makeup used predominantly by non-black performers to represent a black people. The practice gained popularity during the 19th century and contributed to the spread of negative racial stereotypes of African-American people.For the "darky"/"coon" distinction see, for example, note 34 on p. 167 of Edward Marx and Laura E. Franey's annotated edition of Yone Noguchi, The American Diary of a Japanese Girl, Temple University Press, 2007, . See also Lewis A. Erenberg (1984), Steppin' Out: New York Nightlife and the Transformation of American Culture, 1890–1930, University of Chicago Press, p. 73, . For more on the "darky" stereotype, see J. Ronald Green (2000), Straight Lick: The Cinema of Oscar Micheaux, Indiana University Press, pp. 134, 206, ; p. 151 of the same work also alludes to the specific "coon" archetype.
In the late part of the century the group of music publishers and songwriters which dominated popular music in the United States became known as Tin Pan Alley. The name originally referred to a specific place: West 28th Street between Fifth and Sixth Avenue in Manhattan, and a plaque (see below) on the sidewalk on 28th Street between Broadway and Sixth commemorates it. The start of Tin Pan Alley is usually dated to about 1885, when several music publishers set up shop in the same district of Manhattan. The end of Tin Pan Alley is less clear-cut. Some date it to the start of the Great Depression in the 1930s when the phonograph and radio supplanted sheet music as the driving force of American popular music, while others consider Tin Pan Alley to have continued into the 1950s when earlier styles of American popular music were upstaged by the rise of rock & roll.
The "record industry" eventually replaced the sheet music publishers as the music industry's largest force. A multitude of record labels came and went. Some noteworthy labels of the earlier decades include the Columbia Records, Crystalate, Decca Records, Edison Bell, The Gramophone Company, Invicta, Kalliope, Pathé, Victor Talking Machine Company and many others. Many record companies died out as quickly as they had formed, and by the end of the 1980s, the "Big six" — EMI, CBS, BMG, PolyGram, WEA and MCA Records — dominated the industry. Sony bought CBS Records in 1987 and changed its name to Sony Music in 1991. In mid-1998, PolyGram merged with MCA Music Entertainment creating what we now know as Universal Music Group. Since then, Sony and BMG merged in 2004, "Sony and BMG merger backed by EU" , BBC News, July 19, 2004 and Universal took over the majority of EMI's recorded music interests in 2012.Mark Sweney "Universal's £1.2bn EMI takeover approved – with conditions" , The Guardian (London), EMI Music Publishing, also once part of the now defunct British conglomerate, is now co-owned by Sony as a subsidiary of Sony/ATV Music Publishing. As in other industries, the record industry is characterised by many mergers and/or acquisitions, for the major companies as well as for middle sized business (recent example is given by the Belgium group PIAS Recordings and French group Harmonia Mundi).Mario d'Angelo: "Does globalisation mean ineluctable concentration?" in Roche F., Marcq B., Colomé D. (eds) The Music Industry in the New Economy, Report of the Asia-Europe Seminar (Lyon 2001) IEP de Lyon/Asia-Europe Foundation/Eurical, 2002, pp.53–60.
Genre-wise, music entrepreneurs expanded their industry models into areas like folk music, in which composition and performance had continued for centuries on an ad hoc self-supporting basis. Forming an independent record label, or "indie" label, or signing to such a label continues to be a popular choice for up-and-coming musicians, especially in genres like hardcore punk and extreme metal, even though indies cannot offer the same financial backing of major labels. Some bands prefer to sign with an indie label, because these labels typically give performers more artistic freedom.
In response to the rise of widespread illegal file sharing of digital music-recordings, the record industry took aggressive legal action. In 2001 it succeeded in shutting down the popular music-website Napster, and threatened legal action against thousands of individuals who participated in sharing music-song sound-files. However, this failed to slow the decline in music-recording revenue and proved a public-relations disaster for the music industry. Some academic studies have even suggested that downloads did not cause the decline in sales of recordings. The 2008 British Music Rights surveyAndrew Orlowski. 80% want legal P2P – survey . The Register, 2008. showed that 80% of people in Britain wanted a legal peer-to-peer (P2P) file-sharing service, however only half of the respondents thought that the music's creators should be paid. The survey was consistent with the results of earlier research conducted in the United States, upon which the Open Music Model was based.Shuman Ghosemajumder. Advanced Peer-Based Technology Business Models . MIT Sloan School of Management, 2002.
Legal digital downloads became widely available with the debut of the Apple iTunes Store in 2003. The popularity of music distribution over the Internet has increased, and by 2011 digital music sales topped physical sales of music.
In 2008, Atlantic Records reports that digital sales have surpassed physical sales.
However, as The Economist reported, "paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs".
After 2010, Internet-based services such as Deezer, Pandora Radio, Spotify, and iTunes Radio began to offer subscription-based "streaming media" services over the Internet. With streaming services, the user pays a subscription to a company for the right to listen to songs and other media from a library. Whereas with legal digital download services, the purchaser owns a digital copy of the song (which they can keep on their computer or on a digital media player), with streaming services, the user never downloads the song file or owns the song file. The subscriber can only listen to the song for as long as they continue to pay the streaming subscription. Once the user stops paying the subscription, they cannot listen to audio from the company's repositories anymore. Streaming services began to have a serious impact on the industry in 2014.
Spotify, together with the music streaming industry in general, faces some criticism from artists claiming they are not being fairly compensated for their work as downloaded-music sales decline and music-streaming increases. Unlike physical or download sales, which pay a fixed price per song or album, Spotify pays artists based on their "market share" (the number of streams for their songs as a proportion of total songs streamed on the service). Spotify distributes approximately 70% to rights-holders, who will then pay artists based on their agreements. The variable, and (some say) inadequate nature of this compensation, has led to criticism. Spotify reports paying on average US$0.006 to US$0.008 per stream. In response to concerns, Spotify claims that they are benefiting the music business by migrating "them away from piracy and less monetized platforms and allowing them to generate far greater royalties than before" by encouraging users to use their paid service.
The Recording Industry Association of America (RIAA) revealed in its 2015 earnings report that streaming services were responsible for 34.3 percent of the year's U.S. recorded-music-industry revenue, growing 29 percent from the previous year and becoming the largest source of income, pulling in around $2.4 billion.Compare: US streaming revenue grew 57 percent to $1.6 billion in the first half of 2016 and accounted for almost half of industry sales. This contrasts with the $14.6 billion in revenue that was received in 1999 by the U.S. music industry from the sale of CDs.
The turmoil in the recorded-music industry in the 2000s altered the twentieth-century balance between artists, record companies, promoters, retail music-stores and consumers. , such as Wal-Mart and Best Buy sell more records than music-only CD stores, which have ceased to function as a major player in the music industry. Music-performing artists now rely on concert and merchandise sales (T-shirts, sweatshirts, etc.) for the majority of their income, which in turn has made them more dependent – like pre-20th-century musicians – on patrons, now exemplified by music promoters such as Live Nation (which dominates tour promotion and owns or manages a large number of ). In order to benefit from all of an artist's income streams, record companies increasingly rely on the "360 deal", a new business-relationship pioneered by Robbie Williams and EMI in 2007.
At the other extreme, record companies can offer a simple manufacturing- and distribution-deal, which gives a higher percentage to the artist, but does not cover the expenses of marketing and promotion.
Companies like Kickstarter help independent musicians produce their albums through crowdfunding they want to listen to. Many newer artists no longer see a record deal as an integral part of their business plan at all. Inexpensive recording-hardware and -software make it possible to record reasonable-quality music on a laptop in a bedroom and to distribute it over the Internet to a worldwide audience. This, in turn, has caused problems for recording studios, record producers and : the Los Angeles Times reports that as many as half of the recording facilities in that city have failed.
Changes in the music industry have given consumers access to a wider variety of music than ever before, at a price that gradually approaches zero. However, consumer spending on music-related software and hardware increased dramatically over the last decade, providing a valuable new income-stream for technology companies such as Apple Inc. and Pandora Radio.
Source: Nielsen SoundScan, Official Charts Company/BPI, GfK and IFPI estimate.
In 2004, the joint venture of Sony and BMG created the 'Big Four' at a time the global market was estimated at $30–40 billion.According to the RIAA the world music market is estimated at $40 billion, but according to IFPI (2004) it is estimated at $32 billion. Total annual unit sales (CDs, music videos, MP3s) in 2004 were 3 billion. Additionally, according to an IFPI report published in August 2005, the big four accounted for 71.7% of retail music sales:
Nielsen SoundScan in their 2011 report noted that the "big four" controlled about 88% of the market: "The Nielsen Company & Billboard's 2011 Music Industry Report," Business Wire (January 5, 2012)
After the absorption of EMI by Sony Music Entertainment and Universal Music Group in December 2011 the "big three" were created and on January 8, 2013, after the merger there were layoffs of forty workers from EMI. European regulators forced Universal Music to spin off EMI assets which became the Parlophone Label Group which was acquired by Warner Music Group.Tom Pakinkis, "EMI lay-offs reported in the US," Music Week (January 8, 2013) Nielsen SoundScan issued a report in 2012, noting that these labels controlled 88.5% of the market, and further noted: "The Nielsen Company & Billboard's 2012 Music Industry Report," Business Wire (January 4, 2013)
Note: the IFPI and Nielsen Soundscan use different methodologies, which makes their figures difficult to compare casually, and impossible to compare scientifically., Clicknoise.net, February 1, 2007.
Market shares as of September 2018 are as follows:IBISWorld report 51221
The largest players in this industry own more than 100 subsidiary record labels or sublabels, each specializing in a certain market niche. Only the industry's most popular artists are signed directly to the major label. These companies account for more than half of US market share. However, this has fallen somewhat in recent years, as the new digital environment allows smaller labels to compete more effectively.
Source: IFPI 2014 annual report.
Sales statistics
Digital album volume sales growth in 2014
According to IFPI, the global digital album sales grew by 6.9% in 2014.
+2.1% −2.8% −3.4% +6.9%
Consolidation
Prior to December 1998, the industry was dominated by the "Big Six": Sony Music and BMG had not yet merged, and PolyGram had not yet been absorbed into Universal Music Group. After the PolyGram-Universal merger, the 1998 market shares reflected a "Big Five", commanding 77.4% of the market, as follows, according to MEI World Report 2000:
Albums sales and market value
Total album sales have declined in the early decades of the 21st century, leading some music critics to declare the death of the album. (For instance, the only albums that went platinum in the US in 2014 were the soundtrack to the Disney animated film Frozen and Taylor Swift's 1989, whereas several artists did in 2013.) The following table shows album sales and market value in the world in 2014.
+Music markets, with total retail value, and share of Physical, Digital records, 2014
Recorded music retail sales
2000
In its June 30, 2000 annual report filed with the U.S. Securities and Exchange Commission, Seagram reported that Universal Music Group made 40% of the worldwide classical music sales over the preceding year.
2005
Interim physical retail sales in 2005. All figures in millions.
1 US 14.7 300.5 11.6 326.8 4783.2 4783.2 −5.70% −5.30% 2 Japan 28.5 93.7 8.5 113.5 2258.2 239759 −6.90% −9.20% 3 UK 24.3 66.8 2.9 74.8 1248.5 666.7 −1.70% −4.00% 4 Germany 8.5 58.7 4.4 71 887.7 689.7 −7.70% −5.80% 5 France 11.5 47.3 4.5 56.9 861.1 669.1 7.50% −2.50% 6 Italy 0.5 14.7 0.7 17 278 216 −8.40% −12.30% 7 Canada 0.1 20.8 1.5 22.3 262.9 325 0.70% −4.60% 8 Australia 3.6 14.5 1.5 17.2 259.6 335.9 −22.90% −11.80% 9 India – 10.9 – 55.3 239.6 11500 −19.20% −2.40% 10 Spain 1 17.5 1.1 19.1 231.6 180 −13.40% −15.70% 11 Netherlands 1.2 8.7 1.9 11.1 190.3 147.9 −31.30% −19.80% 12 Russia – 25.5 0.1 42.7 187.9 5234.7 −9.40% 21.20% 13 Mexico 0.1 33.4 0.8 34.6 187.9 2082.3 44.00% 21.50% 14 Brazil 0.01 17.6 2.4 24 151.7 390.3 −20.40% −16.50% 15 Austria 0.6 4.5 0.2 5 120.5 93.6 −1.50% −9.60% 16 Switzerland ** 0.8 7.1 0.2 7.8 115.8 139.2 n/a n/a 17 Belgium 1.4 6.7 0.5 7.7 115.4 89.7 −13.80% −8.90% 18 Norway 0.3 4.5 0.1 4.8 103.4 655.6 −19.70% −10.40% 19 Sweden 0.6 6.6 0.2 7.2 98.5 701.1 −29.00% −20.30% 20 Denmark 0.1 4 0.1 4.2 73.1 423.5 3.70% −4.20% Top 20 74.5 757.1 42.8 915.2 12378.7 −6.60% −6.30%
2003–2007
Approximately 21% of the gross revenue numbers in 2003 can be attributed to used CD sales. This number grew to approximately 27% in 2007. The growth is attributed to increasing on-line sales of used product by outlets such as Amazon.com, the growth of used music media is expected to continue to grow as the cost of digital downloads continues to rise. The sale of used goods financially benefits the vendors and online marketplaces, but in the United States, the first-sale doctrine prevents copyright owners (record labels and publishers, generally) from "double dipping" through a levy on the sale of used music.
2011
In mid-2011, the RIAA trumpeted a sales increase of 5% over 2010, stating that "there's probably no one single reason" for the bump.
2012
The Nielsen Company & Billboard's 2012 Industry Report shows overall music sales increased 3.1% over 2011. Digital sales caused this increase, with a Digital Album sales growth of 14.1% and Digital Track sales growth of 5.1%, whereas Physical Music sales decreased by 12.8% versus 2011. Despite the decrease, physical albums were still the dominant album format. Vinyl Record sales increased by 17.7% and Holiday Season Album sales decreased by 7.1%.
Total revenue by year
Global trade revenue according to the IFPI.
By region
Associations and organizations
The List of music associations and organizations covers examples from around the world, ranging from huge international bodies to smaller national-level bodies.
See also
Citations
General and cited sources
Further reading
External links
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