Any article attempting to describe the sea change going on in the “Music Industry” these days, and furthermore having the temerity to display some numbers or perhaps a pretty graph to support these claims, is fundamentally flawed. The transformation that has been gripping and kneading the business of making music for the last fifteen years is still going on, and we still don’t know how this recipe is going to turn out.
Of course, that doesn’t stop anyone from shouting about what they think is going to pop out of the oven once this sonic revolution is over. Some outfit called Bain & Company published a white paper that features this lovely graphic:
Image: Bain Analysis
The logical conclusion from this picture is that the public’s interest in purchasing music peaked sometime in 1998-99, and it’s all been downhill from there. But wait! Some people have objected to the graph’s lack of adjustment for inflation and population. The amended graph (taken from this article, which is pretty good), looks more like this:
Image: Recording Industry Association of America
That’s better, right? We can now identify two peaks (disco!), but the growth seen in the last two decades of the 20th century doesn’t seem quite as spectacular, and the slumping trend at the end is even worse. It truly must be the end of the music industry.
That is, if you define “music industry” as “businesses that report their numbers to the RIAA”. While that may have been a near-totality of those selling music thirty or even twenty years ago, it’s certainly not the case now. Absent from these numbers are any number of independent labels, and the hordes of musicians now selling their music directly to fans. It’s impossible to know how significant that number is — it’s the dark matter of the music industry.
Another qualification to keep in mind is that these numbers represent the sale of music in the form of recorded media and digital downloads. Live music and merchandise sales, which in practical terms provide more of a living for the savvy musician than do record sales, are completely absent. Does this mean that we can draw ANY conclusions from all these prettily-colored blotches?
Sure — if by “music industry” you mean those parasitic intermediaries that take a 95% cut of the revenue generated by musicians, then yeah, that’s toast. The real question is “will musicians be able to earn a living from their talents in the future?” That answer is less clear, but more positive. The total amount of money spent by the public in music makes for quite a large pie. Whether that pie is growing or shrinking will always be under debate and fodder for articles like this one and the ones referenced above. These charts make a compelling argument for its shrinkage, but as I pointed out there are pieces that are simply not accounted for. I suspect the pie is actually growing — it’s just that those pieces aren’t being tallied as directly as people are used to.
Shrinking or growing, I think there’s one thing we can all agree on, though. This pie is cut into more and more slices every year. The days of Michael Jackson’s maw-choking servings are over, but that just leaves more pie to be divvied up for the rest. And that’s a good thing.