London, UK (PRWEB) October 08, 2012
Large players dominate the Sound Recording & Music Publishing industry, with the big three (Universal, Warner, Sony) accounting for an estimated 78.5% of industry revenue. According to IBISWorld industry analyst Angela Kidson, “this industry is in decline as years of falling record sales have eaten into music publishers' royalty streams and weakened demand for sound recording studios”.
There are two distinct businesses within this industry: music publishers, which earn about 80% of revenue; and sound recording studios, which draw the other 20%. Demand for sound recording studios has weakened as the record companies have reduced their investment in producing recorded music. In the music publishing business, sharp drops in record sales have reduced revenue received from mechanical royalties. In the past five years industry revenue has declined by 1.3% per annum. After a fall of 1.3% expected this year, the industry will total £933.8 million in 2012-13.
Music publishers and sound recording studios face difficult times ahead, with the industry projected to contract in size over the coming years. Although music publishers have begun to diversify their sources of revenue, royalties from record sales still represent about 75% to 80% of revenue for most businesses. Kidson adds, “another problem for the industry will be diminishing demand for services as technology allows recording artists to bypass traditional recording studios and music publishers altogether”. It is not all bad news for the industry, however. Music licensing and the continued growth of online music sales offer some hope, and in 2013-14 industry revenue is forecast to rise by 1.3%. Over the coming five years to 2017-18, revenue is expected to continue its downward trend.
Industry concentration indicates the extent to which major players dominate an industry. The Sound Recording & Music Publishing industry is characterised by several big players that operate throughout the greater entertainment industry, and a large number of small businesses. The major three labels account for an estimated 78.5% of industry revenue. This is a very recent increase in the level of concentration as major label EMI was swallowed up by Universal and Sony. Chrysalis was likewise bought up by BMG. Any industry with major player dominance over 70% constitutes very high market share concentration. The remaining operators are referred to as independent labels and no single one draws more than 2% of industry revenue. Major companies include Vivendi, Sony Music Entertainment UK, Warner Music UK and Chrysalis Group.
For more information on the Sound Recording & Music Publishing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Firms in this industry produce original sound master recordings such as CDs, and promote and distribute them to wholesalers, retailers and consumers. Music publishers acquire and register copyrights for compositions; promote, authorise and use compositions in recordings, TV, and various other media; and publish music and sheet books. Publishers either own the copyright or act as administrator of the music copyrights on behalf of the copyright owners.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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