Major Label Music Production in the US Industry Market Research Report from IBISWorld Has Been Updated

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Companies in the Major Label Music Production industry have been vulnerable to consumers' decreasing preference for non-digital media; however, labels will benefit from cost-cutting measures, new revenue streams and improvements in consumers' disposable incomes over the next five years. For these reasons, industry research firm IBISWorld has updated a report on the Major Label Music Production industry in its growing industry report collection.

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Piracy has done damage, but cost cutting and new revenue streams will benefit the industry.

The Major Label Music Production industry locates and develops musical talent in the United States. Prior to the emergence of the internet, major music labels enjoyed healthy profit margins and revenue growth, because consumers had limited ways to buy and to listen to music. As high-speed internet access proliferated throughout the United States, the market for music shifted and record labels have struggled to adapt. Album sales have declined by an annualized rate of 7.0% in the five years to 2013, and they are expected to decline further in the five years to 2018. Consequently, industry revenue will decline by an annualized rate of 4.4% to $7.7 billion in 2013.

According to IBISWorld Industry Analyst James Crompton, “In order to combat falling album sales, industry operators have been continuously adapting to the digital landscape.” While music piracy has been a threat to the industry, major record labels are increasingly attempting to direct consumers toward legal platforms to access music. Currently, the Major Label Music Production industry is emphasizing streaming platforms, such as Pandora and Spotify, as legitimate ways to access music. However, these platforms generate less revenue for record labels than physical album sales. Given that consumers can now choose to buy a single song online, rather than purchase the entire album, industry operators must therefore rely on large volumes of consumers, through these channels, in order to bolster revenue.

“Although the industry's revenue has been falling rapidly for the past decade, both demand and access to music are now more widespread than ever,” says Crompton. For example, technological advances in the internet and portable devices enable consumers to access music at their leisure. Instead of buying a vinyl record and listening to it at home, consumers can currently buy a digital file and play it on their cell phone. This drastic shift in music consumption demands a response from the major record labels, and the largest record labels have taken note of these advancements. Though major record labels will not enjoy the high profit margins experienced prior to digital music sales, major company efforts to comply with changing consumer preferences will spur revenue growth moving forward.

For more information, visit IBISWorld’s Major Label Music Production in the US industry report page.

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IBISWorld industry Report Key Topics

Companies in the Major Label Music Production industry are responsible for finding musical talent, recording their work and selling it to retail outlets. Major labels’ ability to distribute the physical media and oversee comprehensive publishing operations, produces the fundamental difference between independent and major labels. Major labels also have deeper and broader talent rosters.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
Globalization & Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
Major Companies
Operating Conditions
Capital Intensity
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.

Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld
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