Saturday, October 20, 2007

Chris Anderson on "the Music Industry"

Chris Anderson has written another excellent post about the music industry, "Everything in the Music Industry is Up! (except those plastic discs)." An excerpt:

. . . it's a big mistake to equate the major labels and their plastic disc business with the industry as a whole. Indeed, when you stand back and look at all of music, things don't look so bad at all.

Indeed, it appears that every single part of the music industry except the sale of compact discs is up.

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.


And from the comments on Chris's post:

Comments

And, for what it's worth, down here in long-tail retailer land at CD Baby, even physical CD sales are up 35% over this same month last year. I suspect that part (not all) of the decline of the top-40 CD sales are people buying more CDs directly from independent musicians and alternative outlets.

Posted by: Derek Sivers | October 19, 2007 at 11:07 PM

Then there's the content. I'd bet that # of bands, # of musicians, # of tracks being made and available somewhere, # of venues are all up as well. My gut feel is that there are more people making more music than ever before. Then how about streaming; Last.fm and Pandora up. P2P sharing; Up. Number of shoutcast servers; Up. Digital radio and radio over cable/satellite stations are Up.

It's highly likely that more people are listening to more (and more varied) music than ever before.

It's not really CD sales that are down. It's the Music Major's profits.

Posted by: julian bond | October 20, 2007 at 01:46 AM

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