Global Music Industry
Music industry reports can be found in the broad leisure business section.
Global recorded music revenue reached almost $16 billion in 2010, according to the International Federation of the Phonographic Industry's (IFPI) 2011 annual report.
Piracy constitutes the main challenge faced by music companies. Market growth is hampered by the fact that almost a third of the recorded music industry’s value is lost to illegal downloading and piracy. While digital music business is booming, with consumers flocking to their computers to buy music in a few easy clicks, so too are individuals involved in digital piracy. It is estimated that if piracy is left unchecked, it will mean the loss of over 1 million jobs from EU’s creative industries by 2015.
- The music recording market has always been driven by technological developments. Over the past 20 years, the industry has been moving from traditional analog technology to digital, benefitting not only the music industry but also the movie industry and video game market.
- According to Parks Associates, the future of the industry lies in networked audio products, due to consumers’ expanding downloaded music collections and popularity of streamed music. Networked audio products facilitate connectivity in the home, allowing consumers to access their music collections from various locations in their homes. Technology is supporting wireless in-house music streaming to multiple devices such as home stereo or theater systems, and docks.
- In the six-year period ending 2010, the global digital music market expanded an impressive 1000%, reports the IFPI. Growth potential remains, with the US market recording nearly 17% of internet users over the age of 13 having bought digital music in the third fiscal quarter of 2010, says NPD Group. Similarly, the UK market currently holds vast potential with about 15% of adult internet users purchasing music online in 2010, according to Harris Interactive. Music downloads represent the leading market segment, with iTunes selling over 10 billion downloads since it was set up in 2003. Other outfits such as HMV, 7digital and Amazon have also entered the digital music market. According to Business Insights, the global digital music industry will reach almost $13.75 billion in 2014, expanding 30% in four years. Factors driving the market include advanced mobile and broadband technologies, with increasing market penetration of mobile devices such as smartphones allowing music fans to download and listen to music anywhere. Obstacles to the market include companies outside of the music industry joining the market and widespread piracy.
Digital Rights Management
- Global Industry Analysts estimates the world Digital Rights Management industry will reach $2.5 billion by 2017. Factors driving the market include rampant software piracy and illegal use or theft of online content. Government bodies and enterprises alike are eager to protect their digital content, while service providers such as online digital music outfits are under pressure to stop losses through piracy.
Online Paid Music Services
- With broadband internet access available to millions of subscribers, online music continues to grow in popularity. Global Industry Analysts estimates over 60% of homes with an internet connection are music site users or music downloaders. Around 25% of legal music service users are in the age bracket between 25 and 35 years old, followed by just under 20% of 13 to 17 year-old customers. Demand is driven by ease of use, hassle free payment methods and the option of various platforms in line with consumer lifestyles such as iPods.
Key Industry Players
Music industry trends reveal that the global market is likely to decline due to piracy and intense rivalry forcing companies to compete on price. Consumers are shying away from physical products in brick-and-mortar music stores in favor of digital music. Without tackling the piracy issue, music industry players will continue to lose a sizeable portion of their revenue to illegal downloaders. Tighter regulations may enlist internet providers to refuse subscribers involved in piracy, though given the nature of the internet, this is neither easy to prove nor to track; therefore piracy is unlikely to be avoided in the near future.
The industry has also been affected by the economic recession, with consumers concentrating their budgets on essential items, leading to losses in the music and video game markets.
Leading Industry Associations
- International Federation of the Phonographic Industry (IFIP)
- Digital Media Association
- Recording Industry Association of America
- International Computer Music Association
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