Music industry  

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The music industry or music business consists of the companies and individuals that make money by creating and selling music. Among the many individuals and organizations that operate within the industry are: the musicians who compose and perform the music; the companies and professionals who create and sell recorded music (e.g., music publishers, producers, recording studios, engineers, record labels, retail and online music stores, performance rights organizations); those that present live music performances (booking agents, promoters, music venues, road crew); professionals who assist musicians with their music careers (talent managers, business managers, entertainment lawyers); those who broadcast music and broadcast radio); journalists; educators; musical instrument manufacturers; as well as many others.

The current music industry emerged around the middle of the 20th century, when records had supplanted sheet music as the largest player in the music business: in the commercial world, people began speaking of "the recording industry" as a loose synonym of "the music industry". Along with their numerous subsidiaries, a large majority of this market for recorded music is controlled by three major corporate labels: the French-owned Universal Music Group, the Japanese-owned Sony Music Entertainment, and the US-owned Warner Music Group. The largest portion of the live music market is controlled by Live Nation, the largest promoter and music venue owner. Live Nation is a former subsidiary of Clear Channel Communications, which is the largest owner of radio stations in the United States. Creative Artists Agency is a large a management and booking company.

The music industry has been undergoing drastic changes since the advent of widespread digital distribution of music. A conspicuous indicator of this is total music sales: since 2000, sales of recorded music have dropped off substantially while live music has increased in importance. The largest music retailer in the world is now digital: Apple Inc.'s iTunes Store. The two largest companies in the industry are Universal Music Group (recording) and Sony/ATV Music Publishing (publisher). Universal Music Group, Sony BMG, EMI Group and Warner Music Group are collectively known as the "Big Four" majors. Labels outside of the Big Four are referred to as independent labels.

History

Early commoditization of music

Until the 1700s, the process of composition and printing of music was mostly supported by patronage from the aristocracy and church. In the mid-to-late 1700s, performers and composers such as Wolfgang Amadeus Mozart began to seek commercial opportunities to market their music and performances to the general public. After Mozart's death, his wife (Constanze Weber) continued the process of commercialization of his music through an unprecedented series of memorial concerts, selling his manuscripts, and collaborating with her second husband, Georg Nissen, on a biography of Mozart.

In the 1800s, the music industry was dominated by sheet music publishers. In the United States, the music industry arose in tandem with the rise of blackface minstrelsy. The group of music publishers and songwriters which dominated popular music in the United States was known as Tin Pan Alley.

The phonographic age

In the early 20th century, the phonograph industry grew greatly in importance, and the record industry eventually replaced the sheet music publishers as the industry's largest force.

A multitude of record labels came and went, but a handful of label corporations prospered for decades. By the end of the 1980s, the "Big 6" — EMI, Sony, BMG, PolyGram, WEA and MCA — dominated the industry. In mid-1998, PolyGram merged into Universal Music Group (formerly MCA), dropping the leaders down to a "Big 5". They became the "Big 4" in 2004 when Sony combined with BMG.

21st Century changes

Just as radio and television did before it, the advent of file sharing technologies has changed the balance between record companies, song writers, and performing artists. Bands such as Metallica have fought back against peer-to-peer programs such as the infamous Napster, and the arguments for and against technology to circumvent them - digital rights management systems - remain controversial. With the advent of Apple Inc.'s iTunes online music store in 2003, legal music downloads became widely available.

By June 2008, digital music sales generated around $2 billion in revenue, with tracks available through 500 online services located in 40 countries, representing around 10 percent of the total global music market. Revenue from retail CD sales, however, continued to fall. IBISWorld reported in June 2008 that "the industry's financial future looks bleak," but noted that, although revenues have decreased, artists have suffered less than record companies, since they can "make most of their money on merchandise sales and touring."