Research Project

The Business of Making Music - What is the Music Industry?

The reality of the industry to that which we might imagine is quite different. To start with we need to identify what we mean by 'the music industry'. The industry is very large and covers a wide range of different markets. Let's first try to build up an understanding of the industry.

To do this we need to look at various statistics. There are always masses of statistics available especially on the Web but they are not always useful or accessible. In the case of the music industry it is difficult to get statistics about the nature of the UK industry because the British Phonographic Institute (BPI) who collect this sort of information charges for access - so unless you are happy to pay £250 to get them it is not much use!

However, there is enough information available for us to get a picture of the market. What we are looking for is some understanding about the size of the market, what segments there are within the market and who buys what within that market.

Finding out about the size of a market usually means looking for sales volumes or revenues within the industry. The market segments relate to the different musical genres that are available - hip-hop, rap, shred, rock, jazz, classical, punk and so on. Who buys the products can be divided into a range of categories such as age, gender, occupation, social grouping, region, etc.

Task 2

Use some of the links below to build up a picture of the music industry as a whole using the guides above.

• Sales of CDs, DVDs and LPs, 1994-2004 - from the Record Industry Association of America (RIAA) [PDF, 975 KB] (http://www.riaa.com/news/newsletter/pdf/2004yearEndStats.pdf)
• Different styles of music, their market share and consumer profiles - from the RIAA [PDF, 69 KB] (http://www.riaa.com/news/marketingdata/pdf/2004consumerprofile.pdf)
• Recording industry fact sheet, 2005 - from the IFPI, International Federation of Phonographic Industries (http://www.ifpi.org/site-content/press/20050802a.html)
• Range of statistics - from the British Association of Record Dealers (http://www.bardltd.org/content/stats.asp)
• Statistics on music sales by age - from the Office for National Statistics (ONS) social trends survey (http://www.statistics.gov.uk/StatBase/ssdataset.asp?vlnk=7183&Pos=&ColRank=1&Rank=272)

Image: The music industry has changed a great deal in the last 30 years - new products and new technology help drive that change but some artists remain popular despite these changes. Copyright: Miguel Ugalde

The following might also be of use:

Album Sales - Percentages, 1994-2001

Share of Genre's Sales Accounted for by Key Artists (Albums), 2001

Source (both tables): Research and Information Department, BPI, 2002. Kindly supplied by Chris Hodgkins of Jazz Services.

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