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Click to email ChrisOh, How the Music Business Keeps Changing
by Christopher Knab - Fourfront Media & Music - January 2009

Back to Music Business 101

Let me start out with some sobering thoughts.

95% of music downloads are illegal downloads and are NOT paid for. (Funny, I thought most of us in the music business wanted to make money from whatever audio or music business profession we chose to get involved with) Well, there is SOME hope on the horizon. Internationally, 2008 saw a 25 % growth in LEGAL downloads for a dollar total of $3.7 billion dollars!

Digital platforms on the Internet that sell LEGAL downloads have increased online and through mobile devices as a new generation of music subscription services, social networking sites and new music licensing channels are emerging. In 2008 digital platforms accounted for 20% of recorded music sales, UP from 15% in 2007!

The music industry continues to change dramatically, but how will you make money from your music, as the industry shifts from a "sales-to-a-customer" model to "monetizing" ACCESS to music across a multitude of channels and platforms?

CD sales, as of 2008, are still the number one way record labels make their money, but the writing is on the wall that the future is NOW for you to implement this new "access" approach to making money from your music.

Some researchers and experts on the subject of selling music predict that by 2012 the shift from CD sales dominating the labels revenue to other approaches already mentioned will take place.

Music is no longer about a pre-prepared set of songs released on a CD by a artist or band but it is a growing business of customers selecting from a wide catalog of individual songs, like on iTunes or eMusic.

So, many artists will be moving away from their ingrained habit of coming up with 10 to 15 songs to record a traditional 'album' and moving toward creating compositions released individually, and finding more 'uses' for their music in the marketplace, like: song placements in films, television and placed on the Internet, as well as used in commercials and even selling sheet music copies of their compositions. Also look more for bands and recording artists to offer individual song downloads from their growing catalog of material available on their own websites, and the many social networking sites that will act as distributors of music.

Single track legal downloads in 2008, were UP 24% to 1.4 billion units globally, and this will continue drive the online music market. Don't get me wrong, full albums are not going away anytime soon, digital albums are growing healthily these days (up 36% from 2007).

Basically the question is this: What other things can you do now to expose your music in ways that never existed a decade ago? What kind of ripple effect will all these changes bring to other parts of the recording industry?

For example, what will happen to the traditional recording studios that for decades made a good living booking their rooms for days or weeks at a time as a band/artist created their record? Already studios that rely on music being recorded at their facilities are losing revenue. Think about it. If only one or two songs is all you plan to record and release, you will be booking and paying the studios less money. So, how will the traditional studios adapt to this loss in revenue when they have been booking much longer time-slots, and now you come in with 2 songs that need to be recorded, instead of 10 or 15 songs?

Back to some facts of life in this new era:

CD sales fell sharply once again in 2008, but the migration to legal downloads and music streaming gathered up steam, this trend will change the way music becomes available to customers. For example, the good-old record stores that we all grew up with are disappearing from the malls and shopping centers across the country, and if you can find a record store anymore, notice the reduced inventory of CDs these stores now carry. (As a former independent record store owner, it is sad to see so many record stores going out of business, or carrying fewer records). But, reality is reality, and so everyone who has an investment in the music business must find ways to adapt to the newer forms of music recording and the delivery systems that are here now, and will be our future.

I suggest you don't quit just because you may not like the changes ahead, but instead have your eyes and ears tuned to the migration of music into the newer digital platforms and learn from this phenomenon, and support the newer music businesses in their search for more efficient ways to get music to the people.

The facts are written on the wall…total album sales in the U.S. (including CDs and full-album downloads) were 428 million units in 2008. That is a 14% DROP from 2007 according to Nielsen/Soundscan. Also, since the year 2000 CD album sales have DECLINED 45%, while DIGITAL music purchases continue, as I said earlier, to grow at a rapid rate.

Start thinking about all this stuff, and what your life will be like in this new era of music development, and music marketing. Everyone will be affected by these and other upcoming changes to our lives, our professions, our jobs. But don't fear the changes, embrace them!

If you think about it, the history of the music business has been about nothing but change, and past generations of musicians and music business professionals over the years have always innovated, and/or adapted to the technological and marketing changes of their generation. There are more ways to make your music available today than at any time in history, so contribute to the changes you see all around you, keep your eyes and ears open to the opportunities that are here now, and always will be with us in one form or another. You can't stop the hands of time….it will tear your arms out!...in other words "Adapt or Die!" it's really the only way to go, ya know?


Christopher Knab is an independent music business consultant based in Seattle, Washington. He is available for private consultations on promoting and marketing independent music, and can be reached by email at: chris@chrisknab.net

Chris Knab's new book,
'Music Is Your Business' is available NOW from the Music Biz Academy bookstore.

Visit the
FourFront Media and Music website for more information on the business of music from Christopher Knab.

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