Industry Analysis & Industry Trends
Music piracy has been an issue since the introduction of the cassette tape in the early 1970s. However, the development of the CD and, more recently, digital downloads – exemplified by Apple's iTunes music retail site – has imbued the phrase with a real fear for record companies.
The ability to copy CDs across to "pirate" or illegal discs at equal quality appeared to diminish consumers' need for legitimate CDs. However, in retrospect this was merely a precursor of the digital revolution that was set to unfold. Today, billions of songs are swapped online at no charge and sales of legal digital music are nowhere near the levels required to complement commensurate declines in CD sales.
All of this comes as part of a seismic shift in the way the world consumes music... read more
Industry Investment
Record companies are in an enviable position when it comes to production: they do not product a physical product. The manufacture of physical media has always been undertaken by other companies, or at least other divisions of the same company. The recording of music is conducted by specialty studios, often contracted out by the record label, removing the need to invest in costly recording equipment.
Keeping costs low
However, wages are quite low, as a great deal of the industry's revenue is spent on these outsourced services, as well as locating, signing and promoting talent... read more