How The Internet Has Rocked The Music Industry
Online music downloads and streaming caused the traditional ways of buying and listening to music to suffer. But just how bad it is?
The decline of the record store
- Between 2000 and 2010 record store sales declined more than 76%. It may be dropping another 77.4% by 2016.
- Between 2000 and 2009 CD album sales declined by 50%.
- Record stores were in Ibisworld's list of 10 U.S. industries that were dead or dying fast.
Sign of the times:
- In 2004, HMV - a company like Virgin, but based out of the U.S. market.
- In 2006, Tower Records closed all of its 89 U.S. stores. The company's parent filed for Chapter 11 bankruptcy in early 2009.
- Also in 2006, Sam Goody's parent company filed for Chapter 11 bankruptcy.
- In 2009, the last of the Virgin stores closed its doors.
- In January 2012, digital music sales surpassed physical music sales for the first time ever. Digital sales made up 50.3% of all music sales.
- In 2011: physical music sales - 5% down; digital music sales - 8.4% up.
From MP3 to streaming
Originally, digital music was confined to the computer
- MP3 were mainly distributed online.
File - sharing services became popular, like: Morpheus + Audiogalaxy.
Then, Diamond Multimedia created RIO,a digital audio player. Music became: portable; more affordable; available with large selections.
iTunes was established in 2001. iPod users could buy songs for just $0.99.
- Spotify is now very popular way to access music.
Instead of storing music on a hard drive or MP3 player, users can stream songs.
1 $0.99 iTunes purchase = 64 Spotify song listens.
The MP3 player phenomenon and music streaming have allowed users to download and listen to individual songs instead of entire albums.
This market a huge change in the music industry.
In fact, from about 1999 to 2009, sales of full albums dropped 55% to less than 400 million.
However, individual, digital track sales went from 0 to 1.2 billion.
The old lives on
Despite the growth in digital media, about 2.000 indie music stores still survive. some attribute this to the remaining popularity for vinyl.
- In 2011, vinyl album sales increased by 39%.
- So far in 2012, sales are up about 10%.
- Vinyl remains relatively popular because it: causes feelings of nostalgia; provides quality sound; is actually tangible.
- Even though the digital music revolution caused both independent and chain record stores to suffer, some retailers continue on with the help of avid supporters.
- Regardless of the growth and decline of music forms, there are pros and cons to every type, and only the future will tell what additional changes are to come.
Sources: http://abcnews.go.com/Business/top-10-dying-industries-usinclude-newspapers-telecom/story?id=13292328#.T-Dr-83c61M; http://www.thefiscaltimes.com/Special-Features/Slideshow/Dying-
Industries/Slide2.aspx; http://www.nytimes.com/2009/06/15/arts/music/15virgi.html; http://money.cnn.com/2006/01/13/news/companies/samggody_suncoast; http://www.cbsnews.com/2100-207_162-599008.html;