The Music Industry is Growing, Believe It Or Not!

by RouteBot on October 28, 2007

Chris Anderson over at The Long Tail has compiled stats showing that the music industry as a whole is still growing!

Overall a lot has been happening in the music industry in the last few weeks, Radiohead, Madonna (leaving her label and signing with LiveNation), Prince, NIN, etc. The results of these have fueled great discussion about the industry and where it is headed.

Chris mentions it is a big mistake to equate the major labels and their plastic disc business with the industry as a whole, and when you stand back and look at all of music, things dont look so bad.

Stats are as follows:

  • Concerts and merchandise: UP (+4%)
  • Digital tracks: UP (+46%)
  • Ringtones: UP (+86% last year, but probably just single-digit percent this year)
  • Licensing for commercials, TV shows, movies and videogames: UP (Warner Music saw licensing grow by about $20 million over the past year)
  • Even vinyl singles (think DJs): UP (more than doubled in the UK)
  • And, if you include the iPod in the music industry, as I’d argue a fair-minded analysis would: UP, UP, UP! (+31% this year)

Only CDs are down (-18%). They’re around 60% of the industry not including the MP3 players, but just around 25% if you do include them.

So the problem with the music labels is not that music is an industry in decline, but that they have a too-narrow view of what business they’re in. Madonna’s switch from a label to a concert promoter should be a clue.

I am not too sure if I agree with Chris that portable music players should be part of the music industry, but  the remaining facts show the true story.

I see the entire industry moving close together and the majors are slowly losing market share and overall industry dominance. The huge majority of new releases are from the independents and I can see the industry becoming a lot more cut throat thus giving greater opportunities to unsigned and independent bands and labels to make a healthy living without losing huge royalties to the major labels.

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