The music industry's decline

My latest post is now up on The Industry StandardHave reports of the music industry’s decline been greatly exaggerated?

For the article, my editor asked me to take a look at the earnings/revenue numbers that have been coming from the major music companies to see if things are really as bad as the companies are claiming. After all, it seems like the double-digit gains in digital should be contributing quite a bit of revenue, and if these companies are still generating millions (or billions) in revenue, how can the major labels and their efforts be branded as “failures.”

The bottom line is that companies are losing money on their bottom line – and anytime that happens, the word failure is tossed about liberally. Until the major music companies figure out a way to improve their margins, sell more digital products, or start working together to adjust their business models to make the digital music market work for them, the major labels are going to continue seeing bad numbers like these from the 2007 EMI Annual Report:

EMI Annual Report

In the course of researching this article, I came across a number of other facts & figures about the digital music industry that might come in handy for some of you, so I thought I would post the links here. These are almost all links to (PDF) files, so consider yourself forewarned.

The Recording Industry Association of America (RIAA) 2007 Consumer Profile

RIAA 2007 Year-end Shipment Statistics

IFPI Digital Music Report 2007

Recorded Music Sales 2007 (physical, digital & performance rights revenue)

And here are a few other graphics from that EMI Annual report:

Value of digital music market according to EMI

Digital music as part of music market according to EMI

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