State of the Music Industry
The days of walking into Wal-Mart to purchase the hot new record on the market have dwindled drastically since the rise of the monster we have all come to love as the internet. The music business continues to be the leader of the pack for the “creative industries” in terms of taking advantage of the digital revolution, generating far greater value from the online and mobile market than any other sector in the creative industries, except for video games. The digital music market has changed the way music is bought and enjoyed, and now accounts for 40% of the total music purchased in the United States (which is up from 32% in 2008, according to a Neilsen SoundScan summary). In 2003, the music industry’s digital revenue peaked at $20 million, and in 2009, digital revenue reached an estimated $4.2 billion (IFPI Digital Music Report). In just seven short years, these technological advancements have changed the state of the music industry, for better or for worse.
Even with all the problems surrounding the record labels, it is still important to note that total sales and revenue are continuing to rise from year to year. In 2008, 65.8 million digital albums were sold, compared to 76.4 million in 2009, resulting in a 16.1% increase. The problem with this statistic is that because the digital market is growing, the value and popularity of the physical product is decreasing drastically. The total albums that were sold decreased by 12.7% in 2009. iTunes is the biggest reason the physical aspect of music sales keeps decreasing, accounting for 25% of the overall music market. The iTunes format has in turn placed a huge emphasis on the sales of “single” track downloads, which is another reason album sales have decreased.
Digital tracks purchased from iTunes and other download services have been greatly diminishing the desire for consumers to purchase full albums. Many people listen to an album online and pick and choose a few...