The Growing Independence Of The Music Industry Part II: The Power And Influence Of Concerts
The music industry has gone through a Michael Jackson-like transformation since digital music overpowered analog as the primary source of music consumption in the 2000’s. Record labels have suffered the most from this digital music revolution. Annual album sales have been cut in half over the last decade (dropping from $14.6 billion in 1999 to $6.3 billion in 2009). While this may be bad news for record stores, it is not necessarily the end of the world for musicians or even record labels for that matter.
Edgar Bronfman, CEO of Warner Music, described the state of the music industry best, “The music industry is growing, but the record industry is not.” In contrast to the record industry (which has seen a steady decline in annual sales since 2000), concert ticket sales have been increasing at a steady rate (almost doubling in sales over the course of the past decade). This growth in concert sales has become the lifeblood of the music industry. Musicians are now receiving 2/3 of their annual income from concert tours while the remaining 1/3 is gathered from record sales. This is a complete 180 from 10 years ago when 2/3 of annual income was derived from record sales and 1/3 was collected off of concert tours.
The demand for concert tickets has rised in the past decade just as the average price of concert tickets has also increased at a steady rate. These driving economic forces have kept the music industry strong, despite the declining album sales. While social media may not be able to help these falling record sales, it is certainly a valuable asset in promoting and marketing concert tours and merchandise. This shift in the music industry is in full force and those who are not able to adapt to the changing music industry will fade away into obscurity.