The Big Dirty Secret: How Big Is The Music Business?
The latest estimate from RIAA is that the world music market is now worth around $17 billion – down from around $40 billion just 5 years ago (or down from $32 billion if you believe IFPI). Clearly a declining business even though digital sales are steadily picking up – they make up nearly 50% of the overall sales volume in developed countries, with US leading the way with 43%.
But there is something these figures don’t tell us.
There is such a thing as a “broader music industry.” Take hi-fi equipment manufacturers or television set manufacturers. You get my drift? If you do, then you know that already at this point we’re looking at a business that is worth $130 billion, not a paltry $17 Bn. And we’re just getting warmed up.
There’s also the minor fact that the live performance market is today worth just over $17 Bn. Merchandising and sponsorships add at least double that to the mix. And publishing is worth another $44 Bn or so. Hey things are adding up to a nice round number. All MUSIC-related!
But this figure too doesn’t tell the whole story. Not even close!
Now add TV and radio entertainment programs, music in the offices and shops, movies (Hollywood and otherwise), ringtones, and basically the ENTIRE “entertainment” sector ranging from cruise ships to porn to… you name it (think of any business that doesn’t need music AT ALL – it’s hard, isn’t it?) – and we’re finally looking at the REAL value of this business. And it is… $1.4 trillion!
And it’s projected to grow to $1.8 trillion by the end of 2010.
Now, this projection STILL doesn’t even include the internet-based businesses such as broadband providers, etc, which are almost entirely based on or around music and whose value alone can be estimated at no less than $100 Bn!
Oh, and did I mention that the radio advertising sector was worth $34 Bn in 2006? Although I couldn’t get a hold of reliable latest figures, we can assume that it’s worth around $25 Bn today – and slowly clawing its way back to where it once was. But that’s another matter.
My point is, the MUSIC business is like a cog wheel without which the ENTIRE entertainment business (“the broader music business”) machine would grind to a halt. It may be worth a mere $17Bn today but it unlocks the door to a beast worth nearly $2 TRILLION!
And you know what they say – a trillion here and a trillion there and do that ten more times and you could almost cover a solid chunk of the US national debt! (Sorry, I couldn’t resist. It’s true though…)
Let’s get back to what all these figures mean – to us.
Music BUSINESS is expanding. There is MORE AND MORE room for us in it. For the independent artists, that is.
This is the one huge secret the big corporations do NOT want you to know. They want to control all that constantly-increasing and new business potential! They insist on drawing your attention to how YOU stole all their incomes by pirating their music on the web, in the hope that you’ll think to yourself “I’m giving up. There’s no room for me to make ends meet in this business. And on top of that I’m a thieving bastard!”
Meanwhile, as some aspects of the “broader music business” contract, others expand. While CD sales dwindle, digital sales go up. While one distribution outlet (record stores) is all but gone, multiple others appear in its place (web downloads or smartphone ringtones and downloads, to name just two).
The big music labels therefore have the following problem: how can they plug ALL the holes where music is needed (throughout this VAST two-trillion-dollar industry) with only THEIR music?
They know that in order to do that, they would have to be able to produce even more music – but therefore also to increase their overheads proportionately more. And they haven’t yet mastered all the new distribution outlets. They also don’t quite have enough cash to pull this off just yet. And they actually don’t have enough product to satisfy all the demand either!
It’s a race. Between them… and us!
What this means to the indie musicians and indie entrepreneurs is that their moment is NOW! The window is currently wide open and it’s only covered with a curtain of deceptions and distractions, mostly courtesy of the big music business interests. But if you look around, you’ll see that times they’re indeed a-changin’. Licensing companies are scrambling to sign new music with less red tape (hence they turn to the indies increasingly more often than they do to the majors!). The general population, too, is experiencing a “consciousness expansion” now, where they’re slowly but surely becoming more open to NEW MUSIC. And labels are looking to sign acts even as they can barely afford to do so – but if they don’t do it the indies will, god forbid, succeed by themselves!
And here you thought there was no more good news left. There is. And it’s growing. Pass this on!
Sources: Reuters, RIAA, IFPI, Wikipedia, Collegium, UNESCO
