UK Music Industry Economists Admit: Music Industry Getting Bigger, Not Smaller
from the about-time! dept
For quite some time, we've been calling out recording industry insiders and their ridiculous stats concerning "losses" from piracy and the like. The most common pattern is to not count where displaced money goes, and if it still benefits the industry. So, for example, many studies would count every downloaded copy as a "lost sale," but would never take into account if that download resulted in the downloader deciding to go to a show and shell out a bunch more cash on merchandise. We're not saying that always happens, but most of the industry studies would only count data that supported their basic premise that the music industry was in trouble and "something must be done." That's highly misleading -- especially when such numbers are then used to make policy.So consider me a bit surprised to see the following report (thanks Ian) out of the UK, from PRS's economists, Will Page and Chris Carey, where they try to look more closely at the real numbers and conclude that for all the whining and complaining, the UK music industry is actually growing (warning:pdf).
Let me repeat that: despite all of the whining and complaining about the state of the music industry, some of the music industry's own economists are admitting that the market is growing.
Not surprisingly, it found that retail product sales have declined, but the other parts of the industry have grown noticeably more than the decline in retail sales. This growth has come from a few sources. Live show attendance has increased more than retail sales have decreased. Consumers have actually spent more. On top of that, the business to business side of the industry (sponsorships, licensing, advertisements, etc.) has grown as well, opening up new and lucrative means of making money.
Admittedly, there are some facts that could potentially temper the results: including claims of the rather uneven distribution of live revenue (big acts get a lot, others perhaps not as much) and worries that without enough support for smaller acts they won't ever be able to get big enough to make that kind of revenue. So, the fear is that it's all just "legacy acts" that are touring and making money, rather than new acts being encouraged the to get big. This is a charge some others have raised in the past, and it certainly bears watching, though I believe, pretty strongly, that it's an issue that works itself out as various additional business models get developed.
Still, it's quite amazing to see that a music industry study (even one from a non-profit like PRS) actually admits that the overall industry is actually growing.
![Hide This Hide this](https://ii.techdirt.com/s/t/i/topclose.png)
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: market size, music industry, uk
Companies: chris carey, prs, will page
Reader Comments
Subscribe: RSS
View by: Time | Thread
Pull the other one
Well, that's a sea-change, innit? If the collection societies lose control of distribution of funds, how will the little guy ever see the money coming to him? /venom
[ link to this | view in chronology ]
Also in the UK, there is a huge festival market, and a made at home pop and rock market that is unusual for the rest of the world (in terms of physical size).
So the question would be: Are the actually selling that many more concert tickets, or just selling them for the significantly higher price?
[ link to this | view in chronology ]
Another question
[ link to this | view in chronology ]
Right to Exist
Even if the "failing" premise were true, why is the conclusion "something must be done". I dont get it? Is the record industry now too big to fail . . . good riddence I say, couldnt happen to a more deserving group.
[ link to this | view in chronology ]
Re: Right to Exist
[ link to this | view in chronology ]
Re: Right to Exist
[ link to this | view in chronology ]
Big Brother / Big Sister
Gasp, that would actually benefit the artists and continue making money for everyone involved. Clearly the industry needs to evolve and it would be nice to see them be nicer.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
OK you lost me
[ link to this | view in chronology ]
And I always considered it a result of the dynamic that companies can make more money with sales of a billion units from one (semi-talented, label-created) act than from a 100k units from a thousand smaller (actually creative, independent and intelligent and therefore prossibly more fractious to deal with) acts.
As a record company, would you rather have ONE Britney or a hundred Mark Sandmans/Tom Waits/Bela Flecks/Edgar Meyers??
As someone who loves music, I know which I prefer, but if I were a record company executive (sleazy, greedy, shallow, soulless and with no love for music) I'm sure it would be obvious that the pile of money will be larger and more easily accessible with just a couple of Britney/Ashlees.
[ link to this | view in chronology ]
Re:
In the past, record labels would often open up boutique sub-labels to handle a type of music or to address a smaller market. However, under the current circumstances, it is getting harder and harder for the labels to get involved in marginal acts, which contributes to the "rich getting richer" situation.
Further, this is one of the side effect of the "masnick theory" of music. CwF + RtB has a very simple requirement, fans. When it comes to having fans, the bigger the act, the more they have fans. It is why I often comment on Mike drooling over Trent Reznor's latest "business model", because Trent has so much "F" to work with, that even if he can connect with 0.001% them, he still has a huge pile of people. Most acts starting out don't have that. So in the end, the rich get richer under the Masnick theory as well, and the poor still get beer money. Instead of getting their beer money from selling CDs, now they are expected to sell t-shirts or play miniputt. The end result is about the same.
[ link to this | view in chronology ]
Re: Re:
And...uh, most starting acts don't have a huge fanbase? Yeah, that's kind of a given. I mean, most starting acts have no fanbase at all. I'm not sure how selling 1000 CD's lets you grow your fanbase faster than posting your music up for free on YouTube.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
The rampant file swapping and such also have a very negative effect on the whole process, making it harder for record labels to take a risk on new artists, on marginal artists, etc. Again, the established artists keep going, but now there are rungs missing out of the ladder at the bottom, making it nearly impossible for new acts to crawl out of the muck. Why do you think that we are sitting here looking at albums from Eminem, Mariah Carey, and Whitney Houston all within a few months of each other? Nothing new coming in the bottom, so the rest is being recycled.
[ link to this | view in chronology ]
Re: Re: Re: Re:
Almost no evidence to support that claim, and plenty to support the alternative. More artists than ever before are making music. More artists than ever before are marking money from music. More artists than ever before are making a living wage from music.
You are just wrong (again).
Also, if you look at analogs, again, it shows the opposite of what you claim. Removing artificial barriers like IP tends to lead to a lot more smaller players being successful, rather than single large entities being massively successful, because those large entities can't hoard. A perfect example: the pharma industry in Italy pre-patent. Highly competitive with hundreds of small to mid-sized firms. Once patents put in place? Massive consolidation into just a few massive conglomerates.
Artificial protectionism creates hoarding. Fair market competition allows many more smaller entities to survive.
But... of course, you're the same guy who we spent a good week trying to explain marginal cost to and you still couldn't grasp the difference between that and average cost, so why do I get the feeling you still won't get this?
[ link to this | view in chronology ]
Re: Re: Re: Re: Re:
Could you point me in the direction of those statistics? I'd love to see them.
[ link to this | view in chronology ]
Re: Re: Re: Re: Re: Re:
There's a research report that's coming out shortly (I got a draft copy). I'll post about it here once it comes out.
It's quite good. It finds that in the "old" system, very very few artists made a "living wage" from music. These days the numbers are much more reasonable, as a lot of the money isn't coming from the old label system, but these newer models (mostly touring, of course).
[ link to this | view in chronology ]
a lot of hot air
Where? Where is the evidence you speak of? Oh yeah, I forgot...we should look around, it's there everywhere, right?
"More artists than ever before are making music. More artists than ever before are marking money from music. More artists than ever before are making a living wage from music."
More and more hot air. Why do you keep repeating those empty statements, Mike? Are more artists making more money than before? Do you have the evidence? All you know is Trent Reznor, Amanda Palmer and Jill Sobule. Can you name 100 artists who have made 1 million using CWf whatever? After all, if more and more are making more and more music and more and more money, it shouldn't be all that difficult to name them. We are still a loooooong way off from seeing this blip translate into a trend. There's no trend here, just wishful thinking.
"You are just wrong (again)."
You are always right, aren't you?
[ link to this | view in chronology ]
Re: a lot of hot air
Wait, what? You didn't give any support? That's odd, it seems rather hypocritical of you.
Better watch out. If you keep fighting hot air with hot air, you might cause global warming!
[ link to this | view in chronology ]
Re: Re: a lot of hot air
[ link to this | view in chronology ]
UK Music Business Growing
[ link to this | view in chronology ]
Live music shrinking in Germany
http://www.billboard.biz/bbbiz/content_display/industry/e3i94ea3c8eea0facd9bd82f9731dbf654f
[ link to this | view in chronology ]
Nope. Just because a rich man makes $7 million dollars in corn futures doesn't make it OK to break into his house and steal $2 million dollars worth of jewelry.
Theft is theft, TechDirt writers. Stop defending it.
[ link to this | view in chronology ]
Interesting Read
[ link to this | view in chronology ]
Music and Soul
[ link to this | view in chronology ]