HOME

TheInfoList



OR:

The music industry consists of the individuals and organizations that earn money by writing songs and
musical composition Musical composition can refer to an original piece or work of music, either vocal or instrumental, the structure of a musical piece or to the process of creating or writing a new piece of music. People who create new compositions are called c ...
s, creating and selling
recorded music Sound recording and reproduction is the electrical, mechanical, electronic, or digital inscription and re-creation of sound waves, such as spoken voice, singing, instrumental music, or sound effects. The two main classes of sound recording te ...
and sheet music, presenting
concerts A concert is a live music performance in front of an audience. The performance may be by a single musician, sometimes then called a recital, or by a musical ensemble, such as an orchestra, choir, or band. Concerts are held in a wide variety ...
, 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
songwriter A songwriter is a musician who professionally composes musical compositions or writes lyrics for songs, or both. The writer of the music for a song can be called a composer, although this term tends to be used mainly in the classical music ge ...
s and composers who write songs and musical compositions; the singers, musicians, conductors, and
bandleader A bandleader is the leader of a music group such as a rock or pop band or jazz quartet. The term is most commonly used with a group that plays popular music as a small combo or a big band, such as one which plays jazz, blues, rhythm and blues or ...
s who perform the music; the record labels,
music publisher A music publisher is a type of publisher that specializes in distributing music. Music publishers originally published sheet music. When copyright became legally protected, music publishers started to play a role in the management of the intellect ...
s,
recording studios A recording studio is a specialized facility for sound recording, mixing, and audio production of instrumental or vocal musical performances, spoken words, and other sounds. They range in size from a small in-home project studio large enou ...
, music producers,
audio engineer An audio engineer (also known as a sound engineer or recording engineer) helps to produce a recording or a live performance, balancing and adjusting sound sources using equalization, dynamics processing and audio effects, mixing, reproduction ...
s, retail and
digital music store A digital music store is a business that sells digital audio files of music recordings over the Internet. Customers gain ownership of a license to use the files, in contrast to a music streaming service, where they listen to recordings without ...
s, and
performance rights organization A performance rights organisation (PRO), also known as a performing rights society, provides intermediary functions, particularly collection of royalties, between copyright holders and parties who wish to use copyrighted works ''publicly'' in loca ...
s who create and sell recorded music and sheet music; and the booking agents, promoters,
music venue A music venue is any location used for a concert or musical performance. Music venues range in size and location, from a small coffeehouse for folk music shows, an outdoor bandshell or bandstand or a concert hall to an indoor sports stadium. ...
s,
road crew The road crew (or roadies) are the technicians or support personnel who travel with a band on tour, usually in sleeper buses, and handle every part of the concert productions except actually performing the music with the musicians. This cat ...
, 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 talent managers,
artists and repertoire Artists and repertoire (colloquially abbreviated to A&R) is the division of a record label or music publishing company that is responsible for talent scouting and overseeing the artistic development of recording artists (singers, instrumentalist ...
managers,
business manager The Oxford English Dictionary defines a business manager as "a person who manages the business affairs of an individual, institution, organization, or company". Compare manager. Business managers drive the work of others (if any) in order to op ...
s,
entertainment law Entertainment law, also referred to as media law, is legal services provided to the entertainment industry. These services in entertainment law overlap with intellectual property law. Intellectual property has many moving parts that include trad ...
yers; those who broadcast audio or video music content ( satellite,
Internet radio stations The Internet (or internet) is the global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a '' network of networks'' that consists of private, pub ...
,
broadcast radio Radio broadcasting is transmission of audio (sound), sometimes with related metadata, by radio waves to radio receivers belonging to a public audience. In terrestrial radio broadcasting the radio waves are broadcast by a land-based radio sta ...
and TV stations); music journalists and
music critic ''The Oxford Companion to Music'' defines music criticism as "the intellectual activity of formulating judgments on the value and degree of excellence of individual works of music, or whole groups or genres". In this sense, it is a branch of mus ...
s; DJs; music educators and teachers; musical instrument manufacturers; 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 The American Federation of Musicians of the United States and Canada (AFM/AFofM) is a 501(c)(5) labor union representing professional instrumental musicians in the United States and Canada. The AFM, which has its headquarters in New York City, ...
), not-for-profit performance-rights organizations (e.g.
American Society of Composers, Authors and Publishers The American Society of Composers, Authors, and Publishers (ASCAP) () is an American not-for-profit performance-rights organization (PRO) that collectively licenses the public performance rights of its members' musical works to venues, broadca ...
) and other associations (e.g.
International Alliance for Women in Music The International Alliance for Women in Music (IAWM) is an international membership organization of women and men dedicated to fostering and encouraging the activities of women in music, particularly in the areas of musical activity, such as compos ...
, a non-profit organization that advocates for women composers and musicians). The modern Western music industry emerged between the 1930s and 1950s, when
records A record, recording or records may refer to: An item or collection of data Computing * Record (computer science), a data structure ** Record, or row (database), a set of fields in a database related to one entity ** Boot sector or boot record, ...
replaced sheet music as the most important product in the music business. In the commercial world, "the recording industry"—a reference to recording performances of songs and pieces 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 Music Entertainment (SME), also known as simply Sony Music, is an American multinational music company. Being owned by the parent conglomerate Sony Group Corporation, it is part of the Sony Music Group, which is owned by Sony 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 US-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 A music venue is any location used for a concert or musical performance. Music venues range in size and location, from a small coffeehouse for folk music shows, an outdoor bandshell or bandstand or a concert hall to an indoor sports stadium. ...
owner. Live Nation is a former subsidiary of iHeartMedia Inc, 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 2000, sales of recorded music have dropped off substantially while
live music A concert is a live music performance in front of an audience. The performance may be by a single musician, sometimes then called a recital, or by a musical ensemble, such as an orchestra, choir, or band. Concerts are held in a wide variety ...
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. Apple Inc. is an American multinational technology company headquartered in Cupertino, California, United States. Apple is the largest technology company by revenue (totaling in 2021) and, as of June 2022, is the world's biggest company b ...
'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 Apple Music is a music, audio and video streaming service developed by Apple Inc. Users select music to stream to their device on-demand, or they can listen to existing playlists. The service also includes the Internet radio stations Apple Mu ...
, and
Amazon Music Amazon Music (previously Amazon MP3) is a music streaming platform and online music store operated by Amazon. Launched in public beta on September 25, 2007, in January 2008 it became the first music store to sell music without digital rights man ...
are the largest streaming services by subscriber count.


Business structure

The main branches of the music industry are the
live music A concert is a live music performance in front of an audience. The performance may be by a single musician, sometimes then called a recital, or by a musical ensemble, such as an orchestra, choir, or band. Concerts are held in a wide variety ...
industry, the recording industry, and all the companies that train, support, supply and represent musicians. The recording industry produces three separate products:
compositions Composition or Compositions may refer to: Arts and literature *Composition (dance), practice and teaching of choreography *Composition (language), in literature and rhetoric, producing a work in spoken tradition and written discourse, to include v ...
(songs, pieces, lyrics), recordings (audio and video) and media (such as CDs or
MP3 MP3 (formally MPEG-1 Audio Layer III or MPEG-2 Audio Layer III) is a coding format for digital audio developed largely by the Fraunhofer Society in Germany, with support from other digital scientists in the United States and elsewhere. Origin ...
s, and
DVD The DVD (common abbreviation for Digital Video Disc or Digital Versatile Disc) is a digital optical disc data storage format. It was invented and developed in 1995 and first released on November 1, 1996, in Japan. The medium can store any kin ...
s). 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 Claude Antoine Marie François (; 1 February 1939 – 11 March 1978), also known by the nickname Cloclo, was a French pop singer, composer, songwriter, record producer, drummer and dancer. François co-wrote the lyrics of " Comme d'habitude" ( ...
, Frank Sinatra's recording of "My Way" is owned by
Capitol Records Capitol Records, LLC (known legally as Capitol Records, Inc. until 2007) is an American record label distributed by Universal Music Group through its Capitol Music Group imprint. It was founded as the first West Coast-based record label of note ...
, 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.


Compositions

Songs, instrumental pieces and other musical compositions are created by
songwriter A songwriter is a musician who professionally composes musical compositions or writes lyrics for songs, or both. The writer of the music for a song can be called a composer, although this term tends to be used mainly in the classical music ge ...
s or composers and are originally owned by the composer, although they may be sold or the rights may be otherwise assigned. For example, in the case of
work for hire A work made for hire (work for hire or WFH), in copyright law in the United States, is a work that is subject to copyright and is created by employees as part of their job or some limited types of works for which all parties agree in writing to th ...
, the composition is owned immediately by another party. Traditionally, the copyright owner
licenses A license (or licence) is an official permission or permit to do, use, or own something (as well as the document of that permission or permit). A license is granted by a party (licensor) to another party (licensee) as an element of an agreeme ...
or "assigns" some of their rights to
publishing companies Publishing is the activity of making information, literature, music, software and other content available to the public for sale or for free. Traditionally, the term refers to the creation and distribution of printed works, such as books, newsp ...
, by means of a
publishing contract A publishing contract is a legal contract between a publisher and a writer or author (or more than one), to publish original content by the writer(s) or author(s). This may involve a single written work, or a series of works. In the case of music ...
. The publishing company (or a collection society operating on behalf of many such publishers, songwriters and composers) collects fees (known as " publishing royalties") when the composition is used. A portion of the royalties are paid by the publishing company to the copyright owner, depending on the terms of the contract. Sheet music provides an income stream that is paid exclusively to the composers and their publishing company. Typically (although not universally), the publishing company will provide the owner with an advance against future earnings when the publishing contract is signed. A publishing company will also promote the compositions, such as by acquiring song "placements" on television or in films.


Recordings

Recordings are created by
recording artist A musician is a person who composes, conducts, or performs music. According to the United States Employment Service, "musician" is a general term used to designate one who follows music as a profession. Musicians include songwriters who wr ...
s, which includes singers, musicians (including session musicians) and
musical ensemble A musical ensemble, also known as a music group or musical group, is a group of people who perform instrumental and/or vocal music, with the ensemble typically known by a distinct name. Some music ensembles consist solely of instrumentalists, ...
s (e.g.
backing band A backup band or backing band is a musical ensemble that typically accompanies a single artist who is the featured performer. The situation may be a live performance or in a recording session, and the group may or may not have its own name, such a ...
s,
rhythm section A rhythm section is a group of musicians within a music ensemble or band that provides the underlying rhythm, harmony and pulse of the accompaniment, providing a rhythmic and harmonic reference and "beat" for the rest of the band. The rhythm sec ...
s, orchestras, etc.) usually with the assistance and guidance from record producers and
audio engineer An audio engineer (also known as a sound engineer or recording engineer) helps to produce a recording or a live performance, balancing and adjusting sound sources using equalization, dynamics processing and audio effects, mixing, reproduction ...
s. They were traditionally made in recording studios (which are rented for a daily or hourly rate) in a
recording session The term studio recording means any recording made in a studio, as opposed to a live recording, which is usually made in a concert venue or a theatre, with an audience attending the performance. Studio cast recordings In the case of Broadway m ...
. In the 21st century, advances in digital recording technology have allowed many producers and artists to create "
home studio Home recording is the practice of recording sound in a private home instead of a professional recording studio. A studio set up for home recording is called a home studio or project studio. Home recording is widely practiced by voice actors, narrat ...
s" using high-end computers and digital recording programs like Pro Tools, bypassing the traditional role of the commercial recording studio. The record producer oversees all aspects of the recording, making many of the logistic, financial and artistic decisions in cooperation with the artists. The record producer has a range of different responsibilities including choosing material and/or working with the composers, hiring session musicians, helping to
arrange Arrange is a mythological figure from the Australian aboriginal creation myth of the Alyawarre people for Karlu Karlu. In the myth, the figure Arrange, who is also referred to as the devil man, comes from Ayleparrarntenhe. Arrange was making ...
the songs, overseeing the musician performances, and directing the audio engineer during recording and mixing to get the best sound.
Audio engineer An audio engineer (also known as a sound engineer or recording engineer) helps to produce a recording or a live performance, balancing and adjusting sound sources using equalization, dynamics processing and audio effects, mixing, reproduction ...
s (including recording, mixing and mastering engineers) are responsible for ensuring good audio quality during the recording. They select and set up microphones and use
effects unit An effects unit or effects pedal is an electronic device that alters the sound of a musical instrument or other audio source through audio signal processing. Common effects include distortion/overdrive, often used with electric guitar in ele ...
s and
mixing console A mixing console or mixing desk is an electronic device for mixing audio signals, used in sound recording and reproduction and sound reinforcement systems. Inputs to the console include microphones, signals from electric or electronic instr ...
s to adjust the sound and level of the music. A recording session may also require the services of an
arranger In music, an arrangement is a musical adaptation of an existing composition. Differences from the original composition may include reharmonization, melodic paraphrasing, orchestration, or formal development. Arranging differs from orchestra ...
, orchestrator, studio musicians, session musicians, vocal coaches, or even a discreetly-hired ghostwriter to help with the lyrics or songwriting. Recordings are (traditionally) owned by
record companies A record label, or record company, is a brand or trademark of music recordings and music videos, or the company that owns it. Sometimes, a record label is also a publishing company that manages such brands and trademarks, coordinates the produc ...
. Some artists own their own record companies (e.g.
Ani DiFranco Angela Maria "Ani" DiFranco (; born September 23, 1970) is an American-Canadian singer-songwriter. She has released more than 20 albums. DiFranco's music has been classified as folk rock and alternative rock, although it has additional influe ...
). A
recording contract A recording contract (commonly called a record contract or record deal) is a legal agreement between a record label and a recording artist (or group), where the artist makes a record (or series of records) for the label to sell and promote. Artists ...
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 promoting and
marketing Marketing is the process of exploring, creating, and delivering value to meet the needs of a target market in terms of goods and services; potentially including selection of a target audience; selection of certain attributes or themes to empha ...
the record. For physical media (such as CDs), 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. Session musicians and orchestra members (as well as a few recording artists in special markets) are under contract to provide
work for hire A work made for hire (work for hire or WFH), in copyright law in the United States, is a work that is subject to copyright and is created by employees as part of their job or some limited types of works for which all parties agree in writing to th ...
; they are typically only paid one-time fees or regular wages for their services, rather than ongoing royalties.


Media

Physical media (such as CDs or vinyl records) are sold by music retailers and are owned by the consumers after they buy them. Buyers do not typically have the right to make digital copies from CDs or other media they buy, or rent or lease the CDs, because they do not own the recording on the CD, they only own the individual physical CD. A music distributor delivers crates of the packaged physical media from the manufacturer to the retailer and maintains commercial relationships with retailers and record companies. The music retailer pays the distributor, who in turn pays the
record company A record label, or record company, is a brand or trademark of music recordings and music videos, or the company that owns it. Sometimes, a record label is also a publishing company that manages such brands and trademarks, coordinates the produc ...
for the recordings. The record company pays mechanical royalties to the publisher and composer via a collection society. The record company then pays royalties, if contractually obligated, to the recording artist. When music is digitally downloaded or
streamed Streaming media is multimedia that is delivered and consumed in a continuous manner from a source, with little or no intermediate storage in network elements. ''Streaming'' refers to the delivery method of content, rather than the content it ...
, 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.


Broadcast, soundtrack and streaming

When a recording is broadcast (either on radio or by a
background music Background music (British English: piped music) is a mode of musical performance in which the music is not intended to be a primary focus of potential listeners, but its content, character, and volume level are deliberately chosen to affect behav ...
service such as
Muzak Muzak is an American brand of background music played in retail stores and other public establishments. The name has been in use since 1934, and has been owned by a division or subsidiary of one or another company ever since. In 1981, Westingh ...
), performance rights organisations (such as the
ASCAP The American Society of Composers, Authors, and Publishers (ASCAP) () is an American not-for-profit performance-rights organization (PRO) that collectively licenses the public performance rights of its members' musical works to venues, broadca ...
and BMI in the US, SOCAN in Canada, or MCPS and PRS in the UK), collect a third type of royalty known as a performance royalty, which is paid to songwriters, composers and recording artists. This royalty is typically much smaller than publishing or mechanical royalties. Within the past decade, more than "15 to 30 percent" of tracks on streaming services are unidentified with a specific artist. Jeff Price says "Audiam, an online music streaming service, has made over several hundred thousand dollars in the past year from collecting royalties from online streaming. According to Ken Levitan, manager from Kings of Leon, Cheap Trick and others, "Youtube has become radio for kids". Because of the overuse of YouTube and offline streaming, album sales have fallen by 60 percent in the past few years. When recordings are used in television and film, the composer and their publishing company are typically paid through a
synchronization license A music synchronization license, or "sync" for short, is a music license granted by the holder of the copyright of a particular composition, allowing the licensee to synchronize ("sync") music with some kind of visual media output (film, televisi ...
. In the 2000s, online subscription services (such as Rhapsody) also provide an income stream directly to record companies, and through them, to artists, contracts permitting.


Live music

A promoter brings together a performing artist and a venue owner and arranges contracts. A
booking agency A talent agent, or booking agent, is a person who finds jobs for actors, authors, broadcast journalists, film directors, musicians, models, professional athletes, screenwriters, writers, and other professionals in various entertainment or sport ...
represents the artist to promoters, makes deals and books performances. Consumers usually buy tickets either from the venue or from a ticket distribution service such as
Ticketmaster Ticketmaster Entertainment, Inc. is an American ticket sales and distribution company based in Beverly Hills, California with operations in many countries around the world. In 2010, it merged with Live Nation under the name Live Nation Entertai ...
. In the US, Live Nation is the dominant company in all of these roles: they own most of the large venues in the US, they are the largest promoter, and they own
Ticketmaster Ticketmaster Entertainment, Inc. is an American ticket sales and distribution company based in Beverly Hills, California with operations in many countries around the world. In 2010, it merged with Live Nation under the name Live Nation Entertai ...
. Choices about where and when to tour are decided by the artist's management and the artist, sometimes in consultation with the
record company A record label, or record company, is a brand or trademark of music recordings and music videos, or the company that owns it. Sometimes, a record label is also a publishing company that manages such brands and trademarks, coordinates the produc ...
. Record companies may finance a tour in the hopes that it will help promote the sale of recordings. However, in the 21st century, it has become more common to release recordings to promote ticket sales for live shows, rather than book tours to promote the sales of recordings. Major, successful artists will usually employ a
road crew The road crew (or roadies) are the technicians or support personnel who travel with a band on tour, usually in sleeper buses, and handle every part of the concert productions except actually performing the music with the musicians. This cat ...
: 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 transportation. On large tours, the road crew may also include an accountant, stage manager, bodyguard, hairdressers, makeup artists and
catering Catering is the business of providing food service at a remote site or a site such as a hotel, hospital, pub, aircraft, cruise ship, park, festival, filming location or film studio. History of catering The earliest account of major servi ...
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 Hardcore punk (also known as simply hardcore) is a punk rock music genre and subculture that originated in the late 1970s. It is generally faster, harder, and more aggressive than other forms of punk rock. Its roots can be traced to earlier pu ...
are more likely to do tours without a road crew, or with minimal support.


Artist management, representation and staff

Artists such as singers and musicians may hire several people from other fields to assist them with their career. The
artist manager A talent manager (also known as an artist manager, band manager or music manager) is an individual who guides the professional career of artists in the entertainment industry. The responsibility of the talent manager is to oversee the day-to-day ...
oversees all aspects of an artist's career in exchange for a percentage of the artist's income. An
entertainment law Entertainment law, also referred to as media law, is legal services provided to the entertainment industry. These services in entertainment law overlap with intellectual property law. Intellectual property has many moving parts that include trad ...
yer assists them with the details of their contracts with record companies and other deals. A
business manager The Oxford English Dictionary defines a business manager as "a person who manages the business affairs of an individual, institution, organization, or company". Compare manager. Business managers drive the work of others (if any) in order to op ...
handles financial transactions, taxes, and bookkeeping. Unions, such as
AFTRA The American Federation of Television and Radio Artists (AFTRA) was a performers' union that represented a wide variety of talent, including actors in radio and television, radio and television announcers and newspersons, singers and recording a ...
and the
American Federation of Musicians The American Federation of Musicians of the United States and Canada (AFM/AFofM) is a 501(c)(5) labor union representing professional instrumental musicians in the United States and Canada. The AFM, which has its headquarters in New York City, ...
in the U.S. provide health insurance and instrument insurance for musicians. A successful artist functions in the market as a
brand A brand is a name, term, design, symbol or any other feature that distinguishes one seller's good or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create an ...
and, as such, they may derive income from many other streams, such as
merchandise Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more i ...
, personal endorsements, appearances (without performing) at events or Internet-based services. These are typically overseen by the artist's
manager Management (or managing) is the administration of an organization, whether it is a business, a nonprofit organization, or a government body. It is the art and science of managing resources of the business. Management includes the activities o ...
and take the form of relationships between the artist and companies that specialize in these products. Singers may also hire a vocal coach, dance instructor,
acting coach An acting coach or drama coach is a teacher who trains performers – typically film, television, theatre, and musical theatre actors – and gives them advice and mentoring to enable them to improve their acting and dramatic performances, prepar ...
, personal trainer or life coach to help them.


Emerging business models

In the 2000s, traditional lines that once divided singers, instrumentalists, publishers, record companies, distributors, retail and consumer electronics have become blurred or erased. Artists may record in a
home studio Home recording is the practice of recording sound in a private home instead of a professional recording studio. A studio set up for home recording is called a home studio or project studio. Home recording is widely practiced by voice actors, narrat ...
using a high-end laptop and a digital recording program such as Pro Tools or use
Kickstarter Kickstarter is an American public benefit corporation based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity. The company's stated mission is to "help bring creative projects to life". As of July 2021, ...
to raise money for an expensive studio recording session without involving a record company. Artists may choose to exclusively promote and market themselves using only free online video sharing services such as YouTube or using social media websites, bypassing traditional promotion and marketing by a record company. In the 2000s,
consumer electronics Consumer electronics or home electronics are electronic ( analog or digital) equipment intended for everyday use, typically in private homes. Consumer electronics include devices used for entertainment, communications and recreation. Usually ...
and computer companies such as
Apple Computer Apple Inc. is an American multinational technology company headquartered in Cupertino, California, United States. Apple is the largest technology company by revenue (totaling in 2021) and, as of June 2022, is the world's biggest company b ...
have become digital music retailers. New digital music distribution technologies and the trends towards using sampling of older songs in new songs or blending different songs to create "mashup" recordings have also forced both governments and the music industry to re-examine the definitions of
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, c ...
and the rights of all the parties involved. Also compounding the issue of defining copyright boundaries is the fact that the definition of "royalty" and "copyright" varies from country to country and region to region, which changes the terms of some of these business relationships. After 15 or so years of the Internet economy, the digital music industry platforms like
iTunes iTunes () is a software program that acts as a media player, media library, mobile device management utility, and the client app for the iTunes Store. Developed by Apple Inc., it is used to purchase, play, download, and organize digital mu ...
, 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 Though used sometimes loosely partly because of a lack of formal definition, the interpretation that seems to best describe Big data is the one associated with large body of information that we could not comprehend when used only in smaller am ...
may increase transparency in the industry.


History of printed music and recorded music


Early history: Printed music in Europe

Music publishing using machine-printed sheet music developed during the
Renaissance music Renaissance music is traditionally understood to cover European music of the 15th and 16th centuries, later than the Renaissance era as it is understood in other disciplines. Rather than starting from the early 14th-century '' ars nova'', the T ...
era in the mid-15th century. The development of music publication followed the evolution of
printing Printing is a process for mass reproducing text and images using a master form or template. The earliest non-paper products involving printing include cylinder seals and objects such as the Cyrus Cylinder and the Cylinders of Nabonidus. The e ...
technologies that were first developed for printing regular
book A book is a medium for recording information in the form of writing or images, typically composed of many pages (made of papyrus, parchment, vellum, or paper) bound together and protected by a cover. The technical term for this physical a ...
s. After the mid-15th century, mechanical techniques for printing sheet music were first developed. The earliest example, a set of liturgical chants, dates from about 1465, shortly after the Gutenberg Bible was printed. Prior to this time, music had to be copied out by hand. To copy music notation by hand was a very costly, labor-intensive, and time-consuming process, so it was usually undertaken only by monks and priests seeking to preserve sacred music for the church. The few collections of secular (non-religious) music that are extant were commissioned and owned by wealthy aristocrats. Examples include the Squarcialupi Codex of Italian
Trecento The Trecento (, also , ; short for , "1300") refers to the 14th century in Italian cultural history. Period Art Commonly, the Trecento is considered to be the beginning of the Renaissance in art history. Painters of the Trecento included Giotto ...
music and the
Chantilly Codex The Chantilly Codex (''Chantilly, Musée Condé MS 564'') is a manuscript of medieval music containing pieces from the style known as the ''Ars subtilior''. It is held in the museum at the Château de Chantilly in Chantilly, Oise. Most of the co ...
of French
Ars subtilior ''Ars subtilior'' (Latin for 'subtler art') is a musical style characterized by rhythmic and notational complexity, centered on Paris, Avignon in southern France, and also in northern Spain at the end of the fourteenth century.Hoppin 1978, 472 ...
music. The use of printing enabled sheet music to 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 Antoine Brumel (c. 1460 – 1512 or 1513) was a French composer. He was one of the first renowned French members of the Franco-Flemish school of the Renaissance, and, after Josquin des Prez, was one of the most influential composers of his gene ...
. He flourished by focusing on Flemish works, rather than Italian, as they were very popular throughout Europe during the
Renaissance music Renaissance music is traditionally understood to cover European music of the 15th and 16th centuries, later than the Renaissance era as it is understood in other disciplines. Rather than starting from the early 14th-century '' ars nova'', the T ...
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 churches. 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 Georg Nikolaus von Nissen (sometimes Nicolaus or Nicolai; 22 January 1761 – 24 March 1826) was a Danish diplomat and music historian. He is the author of one of the first biographies of composer Wolfgang Amadeus Mozart, still used today as a s ...
, on a biography of Mozart. In the 19th century,
sheet-music Sheet music is a handwritten or printed form of musical notation that uses musical symbols to indicate the pitches, rhythms, or chords of a song or instrumental musical piece. Like its analogs – printed books or pamphlets in English, Arabi ...
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 Blackface is a form of theatrical makeup used predominantly by non-Black people to portray a caricature of a Black person. In the United States, the practice became common during the 19th century and contributed to the spread of racial stereot ...
" minstrelsy. Blackface is a form of theatrical makeup used predominantly by non-black performers to represent a
black person Black is a racialized classification of people, usually a political and skin color-based category for specific populations with a mid to dark brown complexion. Not all people considered "black" have dark skin; in certain countries, often in s ...
. The practice gained popularity during the 19th century and contributed to the spread of negative racial stereotypes of African-American people. 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 Below may refer to: *Earth * Ground (disambiguation) *Soil *Floor * Bottom (disambiguation) *Less than *Temperatures below freezing *Hell or underworld People with the surname *Ernst von Below (1863–1955), German World War I general *Fred 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.


Advent of recorded music and radio broadcasting

At the dawn of the early 20th century, the development of sound recording began to function as a
disruptive technology In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances. The concept w ...
to the commercial interests which published sheet music. During the sheet music era, if a regular person wanted to hear popular new songs, he or she would buy the sheet music and play it at home on a piano, or learn the song at home while playing the
accompaniment Accompaniment is the musical part which provides the rhythmic and/or harmonic support for the melody or main themes of a song or instrumental piece. There are many different styles and types of accompaniment in different genres and styles o ...
part on piano or guitar. Commercially released phonograph records of musical performances, which became available starting in the late 1880s, and later the onset of widespread radio broadcasting, starting in the 1920s, forever changed the way music was heard and listened to. Opera houses, concert halls, and clubs continued to produce music and musicians and singers continued to perform live, but the power of radio allowed bands, ensembles and singers who had previously performed only in one region to become popular on a nationwide and sometimes even a worldwide scale. Moreover, whereas attendance at the top symphony and opera concerts was formerly restricted to high-income people in a pre-radio world, with
broadcast radio Radio broadcasting is transmission of audio (sound), sometimes with related metadata, by radio waves to radio receivers belonging to a public audience. In terrestrial radio broadcasting the radio waves are broadcast by a land-based radio sta ...
, a much larger wider range of people, including lower and middle-income people could hear the best orchestras,
big band A big band or jazz orchestra is a type of musical ensemble of jazz music that usually consists of ten or more musicians with four sections: saxophones, trumpets, trombones, and a rhythm section. Big bands originated during the early 1910s and ...
s, popular singers and opera shows. 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 Decca Records is a British record label established in 1929 by Edward Lewis (Decca), Edward Lewis. Its U.S. label was established in late 1934 by Lewis, Jack Kapp, American Decca's first president, and Milton Rackmil, who later became American ...
, Edison Bell,
The Gramophone Company The Gramophone Company Limited (The Gramophone Co. Ltd.), based in the United Kingdom and founded by Emil Berliner, was one of the early recording companies, the parent organisation for the ''His Master's Voice (HMV)'' label, and the European ...
, Invicta, Kalliope,
Pathé Pathé or Pathé Frères (, styled as PATHÉ!) is the name of various French businesses that were founded and originally run by the Pathé Brothers of France starting in 1896. In the early 1900s, Pathé became the world's largest film equipme ...
, 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 EMI Group Limited (originally an initialism for Electric and Musical Industries, also referred to as EMI Records Ltd. or simply EMI) was a British transnational conglomerate founded in March 1931 in London. At the time of its break-up in 201 ...
,
CBS CBS Broadcasting Inc., commonly shortened to CBS, the abbreviation of its former legal name Columbia Broadcasting System, is an American commercial broadcast television and radio network serving as the flagship property of the CBS Entertainme ...
, BMG,
PolyGram PolyGram N.V. was a multinational entertainment company and major music record label formerly based in the Netherlands. It was founded in 1962 as the Grammophon-Philips Group by Dutch corporation Philips and German corporation Siemens, to be ...
,
WEA The Wea were a Miami-Illinois-speaking Native American tribe originally located in western Indiana. Historically, they were described as either being closely related to the Miami Tribe or a sub-tribe of Miami. Today, the descendants of the W ...
and MCA — dominated the industry.
Sony , commonly stylized as SONY, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. As a major technology company, it operates as one of the world's largest manufacturers of consumer and professional ...
bought CBS Records in 1987 and changed its name to Sony Music in 1991. In mid-1998, PolyGram Music Group merged with MCA Music Entertainment creating what we now know as Universal Music Group. Since then, Sony and BMG merged in 2004, and Universal took over the majority of EMI's recorded music interests in 2012.
EMI Music Publishing EMI Music Publishing Ltd. is a British multinational music publishing company headquartered in London, owned by parent company Sony Corporation of America. In May 2018, Sony Music Publishing agreed to increase its stake in EMI to 90%, pendi ...
, 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 and French group
Harmonia Mundi Harmonia Mundi is an independent record label which specializes in classical music, jazz, and world music (on the World Village label). It was founded in France in 1958 and is now a subsidiary of PIAS Entertainment Group. Its Latin name ''harm ...
). 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 Ad hoc is a Latin phrase meaning literally 'to this'. In English, it typically signifies a solution for a specific purpose, problem, or task rather than a generalized solution adaptable to collateral instances. (Compare with ''a priori''.) Com ...
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 Hardcore punk (also known as simply hardcore) is a punk rock music genre and subculture that originated in the late 1970s. It is generally faster, harder, and more aggressive than other forms of punk rock. Its roots can be traced to earlier pu ...
and
extreme metal Extreme metal is a loosely defined umbrella term for a number of related heavy metal music subgenres that have developed since the early 1980s. It has been defined as a "cluster of metal subgenres characterized by sonic, verbal, and visual tran ...
, 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.


Rise of digital online distribution

In the first decade of the 2000s, digitally downloaded and streamed music became more popular than buying physical recordings (e.g. CDs,
records A record, recording or records may refer to: An item or collection of data Computing * Record (computer science), a data structure ** Record, or row (database), a set of fields in a database related to one entity ** Boot sector or boot record, ...
and tapes). This gave consumers almost "friction-less" access to a wider variety of music than ever before, across multiple devices. At the same time, consumers spent less money on recorded music (both physically and digitally distributed) than they had in the 1990s. Total "music-business" revenues in the U.S. dropped by half, from a high of $14.6 billion in 1999 to $6.3 billion in 2009, according to
Forrester Research Forrester is a research and advisory company that offers a variety of services including research, consulting, and events. Forrester has nine North America locations: Cambridge, Massachusetts; New York, New York; San Francisco, California; McLe ...
. Worldwide revenues for CDs,
vinyl Vinyl may refer to: Chemistry * Polyvinyl chloride (PVC), a particular vinyl polymer * Vinyl cation, a type of carbocation * Vinyl group, a broad class of organic molecules in chemistry * Vinyl polymer, a group of polymers derived from vinyl m ...
, cassettes and digital downloads fell from $36.9 billion in 2000 to $15.9 billion in 2010 according to IFPI. '' The Economist'' and '' The New York Times'' reported that the downward trend was expected to continue for the foreseeable future. This dramatic decline in revenue has caused large-scale layoffs inside the industry, driven some more venerable retailers (such as Tower Records) out of business and forced record companies, record producers, studios, recording engineers and musicians to seek new
business model A business model describes how an organization creates, delivers, and captures value,''Business Model Generation'', Alexander Osterwalder, Yves Pigneur, Alan Smith, and 470 practitioners from 45 countries, self-published, 2010 in economic, soci ...
s. 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 Napster was a peer-to-peer file sharing application. It originally launched on June 1, 1999, with an emphasis on digital audio file distribution. Audio songs shared on the service were typically encoded in the MP3 format. It was founded by Shaw ...
, 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 Public relations (PR) is the practice of managing and disseminating information from an individual or an organization (such as a business, government agency, or a nonprofit organization) to the public in order to influence their perception. Pu ...
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 survey 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. 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, Spotify, and Apple's iTunes Radio began to offer subscription-based " pay to stream" 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. 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. ,
big-box store A big-box store (also hyperstore, supercenter, superstore, or megastore) is a physically large retail establishment, usually part of a chain of stores. The term sometimes also refers, by extension, to the company that operates the store. The te ...
s such as Wal-Mart and
Best Buy Best Buy Co. Inc. is an American multinational consumer electronics retailer headquartered in Richfield, Minnesota. Originally founded by Richard M. Schulze and James Wheeler in 1966 as an audio specialty store called Sound of Music, it was rebr ...
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 live performance and
merchandise Merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more i ...
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
music venue A music venue is any location used for a concert or musical performance. Music venues range in size and location, from a small coffeehouse for folk music shows, an outdoor bandshell or bandstand or a concert hall to an indoor sports stadium. ...
s). In order to benefit from all of an artist's income streams, record companies increasingly rely on the "
360 deal In the music industry, a 360 deal (from 360° deal) is a business relationship between an artist and a music industry company. The company agrees to provide financial and other support for the artist, including direct advances as well as support i ...
", 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 Kickstarter is an American public benefit corporation based in Brooklyn, New York, that maintains a global crowdfunding platform focused on creativity. The company's stated mission is to "help bring creative projects to life". As of July 2021, ...
help independent musicians produce their albums through fans funding bands they want to listen to. Many newer artists no longer see a record deal as an integral part of their
business plan A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals. It also describes the nature of the business, background information on t ...
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
audio engineer An audio engineer (also known as a sound engineer or recording engineer) helps to produce a recording or a live performance, balancing and adjusting sound sources using equalization, dynamics processing and audio effects, mixing, reproduction ...
s: 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 A technology company (or tech company) is an electronics-based technological company, including, for example, business relating to digital electronics, software, and internet-related services, such as e-commerce services. Details According to '' F ...
such as
Apple Inc. Apple Inc. is an American multinational technology company headquartered in Cupertino, California, United States. Apple is the largest technology company by revenue (totaling in 2021) and, as of June 2022, is the world's biggest company b ...
and Pandora Radio.


Sales statistics


Digital album volume sales growth in 2014

According to IFPI, the global digital album sales grew by 6.9% in 2014. Source: Nielsen SoundScan, Official Charts Company/BPI, GfK and IFPI estimate.


Consolidation

Prior to December 1998, the industry was dominated by the "Big Six": Sony Music and BMG had not yet merged, and
PolyGram PolyGram N.V. was a multinational entertainment company and major music record label formerly based in the Netherlands. It was founded in 1962 as the Grammophon-Philips Group by Dutch corporation Philips and German corporation Siemens, to be ...
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: * Universal Music Group — 21.1% * Sony Music Entertainment — 17.4% * EMI — 14.1% * Warner Music Group — 13.4% * BMG — 11.4% * Independent labels combined — 22.6% 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. Total annual unit sales (CDs, music videos,
MP3 MP3 (formally MPEG-1 Audio Layer III or MPEG-2 Audio Layer III) is a coding format for digital audio developed largely by the Fraunhofer Society in Germany, with support from other digital scientists in the United States and elsewhere. Origin ...
s) 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: * Universal Music Group—25.5% * Sony BMG Music Entertainment—21.5% * EMI Group—13.4% * Warner Music Group—11.3% * Independent labels combined—28.3% Nielsen SoundScan in their 2011 report noted that the "big four" controlled about 88% of the market: * Universal Music Group (US based) — 29.85% *
Sony Music Entertainment Sony Music Entertainment (SME), also known as simply Sony Music, is an American multinational music company. Being owned by the parent conglomerate Sony Group Corporation, it is part of the Sony Music Group, which is owned by Sony Entertainment ...
(US based) — 29.29% * Warner Music Group (US based) — 19.13% * EMI Group — 9.62% * Independent labels — 12.11% 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. 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)
* Universal Music Group (US based) which owns EMI Music — 32.41% + 6.78% of EMI Group *
Sony Music Entertainment Sony Music Entertainment (SME), also known as simply Sony Music, is an American multinational music company. Being owned by the parent conglomerate Sony Group Corporation, it is part of the Sony Music Group, which is owned by Sony Entertainment ...
(US based) which owns publishing arm of
EMI Group EMI Group Limited (originally an initialism for Electric and Musical Industries, also referred to as EMI Records Ltd. or simply EMI) was a British transnational conglomerate founded in March 1931 in London. At the time of its break-up in 201 ...
— 30.25% * Warner Music Group— 19.15% * Independent labels— 11.42% Note: the IFPI and Nielsen Soundscan use different methodologies, which makes their figures difficult to compare casually, and impossible to compare scientifically. Current Markets shares as of September 2018 are as follows:IBISWorld report 51221 * Warner Music Group — 25.1% * Universal Music Group — 24.3% * Sony Corporation — 22.1% * Other — 28.5% 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.


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 The album era was a period in English-language popular music from the mid-1960s to the mid-2000s in which the album was the dominant form of recorded music expression and consumption. It was primarily driven by three successive music recording ...
. (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. Source: IFPI 2014 annual report.


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 Classical music generally refers to the art music of the Western world, considered to be distinct from Western folk music or popular music traditions. It is sometimes distinguished as Western classical music, as the term "classical music" also ...
sales over the preceding year.


2005

Interim physical retail sales in 2005. All figures in millions.


2003–2007

Approximately 21% of the gross CD 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 The first-sale doctrine (also sometimes referred to as the "right of first sale" or the "first sale rule") is an American legal concept that limits the rights of an intellectual property owner to control resale of products embodying its intellec ...
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

* Music industry of Asia *
Music industry of East Asia The music industry of East Asia, a region that includes Mainland China, Hong Kong, Macau, Japan, Mongolia, North Korea, South Korea and Taiwan is a rapidly growing economic sector that is home to some of the world's largest music markets. Mileston ...
* Music industry of Northern Europe * Music industry of the U.K.


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

* DIY ethic * History of music publishing * Independent record label * List of record labels and :Record labels * List of best-selling music artists * MIDEM-World's largest music trade fair * Record label *
Music community A music community is a group of people involved in a given type of music. Typically such a community has an informal, supportive structure. In the past such groups have typically developed within a town or school, where the members can meet physic ...
*
White label A white label record is a vinyl record with white labels attached. There are several variations each with a different purpose. Variations include test pressings, white label promos, and plain white labels. Test pressings Test pressings, usua ...
*
Taylor Swift Taylor Alison Swift (born December 13, 1989) is an American singer-songwriter. Her discography spans multiple genres, and her vivid songwriting—often inspired by her personal life—has received critical praise and wide media coverage. Bo ...


References


Citations


General and cited sources

*


Further reading

* Lebrecht, Norman: ''When the Music Stops: Managers, Maestros and the Corporate Murder of Classical Music'', Simon & Schuster 1996 * Imhorst, Christian
The 'Lost Generation' of the Music Industry
published under the terms of the GNU Free Documentation License 2004 * Gerd Leonhard: ''Music Like Water – the inevitable music ecosystem'' * The Methods Reporter
Music Industry Misses Mark with Wrongful Suits


– a mid-2000 overview put together by Duke University undergraduate students * 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. * Mario d'Angelo: ''Perspectives de gestion des institutions musicales en Europe'' (Management Perspectives for Musical Institutions in Europe), OMF Series, Paris-Sorbonne University, Ed. Musicales Aug. Zurfluh, Bourg-la-Reine, 2006 * Hill, Dave: ''Designer Boys and Material Girls: Manufacturing the 90s Pop Dream''. Poole, Eng.: Blandford Press, 1986. * Rachlin, Harvey. ''The Encyclopedia of the Music Business''. First ed. New York: Harper & Row, 1981. xix, 524 p.
The supply of recorded music
A report on the supply in the UK of prerecorded compact discs, vinyl discs and tapes containing music. Competition Commission, 1994. * * Tschmuck, Peter: ''Creativity and Innovation in the Music Industry'', Springer 2006. * Knopper, S., 2011. The New Economics of the Music Industry. ''Rolling Stone'', ''25''.


External links


Salon article on Courtney Love's criticism of record industry business practices



Antitrust settlement in Nevada price-fixing case

The British Library - Music Industry Guide (sources of information)

Academic articles about the music industry
The Music Business Journal {{Authority control Distribution (marketing) Industries (economics)