Record labels' new approach

Jul 5th 2007
From The Economist print edition

IT HAS become a familiar refrain. For years record labels, citing tumbling CD sales blamed on internet piracy, have decried the decline of the music industry. The reality is rather more subtle, as Edgar Bronfman, the chairman of Warner Music, a big record company, pointed out last month. “The music industry is growing,” he told an investor conference in New York. “The record industry is not growing.”

Indeed. Seven years ago musicians derived two-thirds of their income, via record labels, from pre-recorded music, with the other one-third coming from concert tours, merchandise and endorsements, according to the Music Managers Forum, a trade group in London. But today those proportions have been reversed—cutting the labels off from the industry's biggest and fastest-growing sources of revenue. Concert-ticket sales in North America alone increased from $1.7 billion in 2000 to over $3.1 billion last year, according to Pollstar, a trade magazine.

Martine