The Music Revolution

Posted By Glenn Sabin on August 11, 2008

I was a record store brat during the seventies.  I worked behind the counter of my dad’s record shop near Capital Hill in DC, hawking the latest hit 45 singles and 8-tracks starting at the informed age of 12.  Pop had what was then largely considered the largest selection of jazz recordings under one roof in the country.  And the gospel offerings were not that far behind.  Back in the day, my family made a decent living selling music.

It’s interesting to note that as much as the marketing and promotion of music has changed over years, especially during this current decade, that we’re back to the hit singles business.  Only now, consumer demand is not fed with vinyl 45s, but with digital downloads from iTunes and other digital music services.  There’s a confluence of game-changing factors at play, but mostly it’s about younger consumers who aren’t interested in physical products.  Many of today’s youth have never purchased a CD in their lifetime!  Today’s youth consumer doesn’t place a tangible value on plastic discs, jewel cases (that typically break within a week) or paper inserts containing liner notes; they want single downloads.  And they expect instant gratification as easy as shopping in their underwear from their bedroom with a credit card.  They download and go.  They don’t want to trek to their local record store.  And they don’t want to pay much, or, often, anything at all.

If you were to add up the estimated loss of revenues from illegal digital downloads and peer-to-peer sharing and then add them to the annual industry legal revenues as recorded by RIAA (Recording Industry of America Association), you will see that people are still consuming plenty of music.  There are just more and more people not paying for it.  And no amounts of college raids and bellyaching from the music industry and RIAA have or will be able to stem this tide.     

The decline of the music business as we once knew it is not being recast wholesale today because of waning interest in recorded music playback by consumers.  On the contrary, consumer passion and consumption for all types of music, prerecorded or live performance, is thriving.  The decline in prerecorded music software sales is an acute symptom, not the underlying problem, of an industry business model gone awry. 

People want and need music in their lives like never before.  Today there are more artists and bands than ever.  The total major-market concert ticket sales in 2007 grew to a record $3.9 billion, up 8% from $3.6 billion in 2006.  This represented the ninth consecutive year that combined concert grosses in the U.S. and Canada have hit an all-time high, according to Pollstar Editor-in-Chief Gary Bongiovanni, as told to Forbes magazine.  Presenters like Live Nation and many of the hundreds of independent music festivals and events around the country are doing quite well. 

How music is now discovered, marketed and delivered to consumers has changed dramatically.  Music remains commercially viable intellectual property, but how to best monetize it what this revolution is all about.  Hope on the part of labels and retail record stores that consumers will continue to purchase their music in the early 21st century the way they did during the last one has been resoundingly proven a fallacy.   

The music content business model is shifting quickly from a primary consumer revenue model to one that is positioning consumer brands to take lead in breaking bands through branded content opportunities.  This is the topic of my next post on Wednesday.

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