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The music industry is the business of music. Although it encompasses the activity of many music-related businesses and organizations, it is currently dominated by the "big four" record groups, also known as "the major labels"/"the majors" — Sony BMG, EMI, Universal and Warner — each of which consists of many smaller companies and labels serving different regions and markets.
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When the term music industry is used in a narrow sense, it refers only to the businesses and organizations that record, produce, publish, distribute, and market recorded music (e.g., music publishers, recording industry, record production companies). This corresponds to the International Standard Industrial Classification (ISIC) that includes sound recording and music publishing activities (J-59).
When the term is used more broadly, it refers to a range of sub-industries that come from a number of different industrial classifications, including Information and Communication (which includes sound recording and music publishing activities), programming and broadcasting activities (e.g., radio stations), education (e.g., music training schools), Arts, entertainment and recreation, and manufacturing and retail sales (e.g., of musical instruments). In this broader sense, the term usually also encompasses not-for-profit organizations such as Musicians\' Unions and writers\' copyright collectives and performance rights organizations.
Until the 1700s, the process of composition and printing of music was mostly supported by patronage from the aristocracy and church. In the mid-to-late 1700s, performers and composers such as Wolfgang Amadeus Mozart began to seek commercial opportunities to market their music and performances to the general public. After Mozart\'s death, his wife (Constanze Weber) continued the process of commercialization of his music through an unprecedented series of memorial concerts, selling his manuscripts, and collaborating with her second husband, Georg Nissen, on a biography of Mozart.Dear Constanze The Guardian
In the 1800s, the music industry was dominated by sheet music publishers. In the United States, the music industry arose in tandem with the rise of blackface minstrelsy. The group of music publishers and songwriters which dominated popular music in the United States was known as Tin Pan Alley. In the early 20th century the phonograph industry grew greatly in importance, and the record industry eventually replaced the sheet music publishers as the industry\'s largest force.
Just as radio and television did before it, the advent of file sharing technologies may change the balance between record companies, song writers, and performing artists. Bands such as Metallica have fought back against peer-to-peer programs such as the infamous Napster, and the arguments for and against technology to circumvent them - digital rights management systems - remain controversial.
With the re-launch of Napster as a legally licensed download site in 2003 (in the US), along with the advent of Apple Computer\'s iTunes online music store in the same year, the major record companies have begun to embrace digital downloading as the future of the music industry.
The music industry is made up of various elements, including:
A record company is an entity that manages sound recording-related brands and trademarks which consist of their owned labels; their owned and licensed master recordings; and various related ancillary businesses such as home video and DVDs.
Labels may comprise a record group which is, in turn, controlled by a music group. As such, a larger umbrella label may have a number of sub-labels releasing music.
Music publishers exist separately (even if sharing the same ultimate holding company or brand name), and they represent the rights in the compositions - i.e. the music as written rather than as recorded.
Record companies and record labels that are not under the control of the Big Four music groups and music publishers that are not one of the Big Four are generally considered to be independent, even if they are part of large corporations with complex structures. Some prefer to use the term indie label to refer to only those independent labels that adhere to criteria of corporate structure and size, and some consider an indie label to be almost any label that releases non-mainstream music, regardless of its corporate structure.
Nielsen SoundScan reported that the big four accounted for 81.87% of the US music market in 2005:Paul Cashmere (2006-01-05). Universal Is The Biggest Music Company of 2005. Undercover (Australia). Retrieved on 2006-05-27.
and in 2004, 72.64%:
The global market was estimated at $30-40 billion in 2004.According to the RIAA the world music market is estimated at $40 billion, but according to IFPI (2004) it is estimated at $32 billion. Total annual unit sales (CDs, music videos, mp3s) in 2004 were 3 billion.
According to an IFPI report published in August 2005,IFPI releases definitive statistics on global market for recorded music the big four accounted for 71.7% of retail music sales:
Prior to December 1998, the industry was dominated by the "Big Six": Sony Music and BMG had not yet merged, and PolyGram had not yet been absorbed into Universal Music Group. After the PolyGram-Universal merger, the 1998 market shares reflected a "Big Five", commanding 77.4% of the market, as follows, according to MEI World Report 2000:
The following table shows album sales and market value in the world in the 1990s–2000s.
| N | Country | Album Sales Share | Share of World Market Value |
|---|---|---|---|
| 1 | USA | 37-40% | 30-35% |
| EU | 30-32% | 31-34% | |
| 2 | Japan | 9-12% | 16-19% |
| 3 | UK | 7-9% | 6.4-9.1% |
| 4 | Germany | 7-8% | 6.4-5.3% |
| 5 | France | 4.5-5.5% | 5.4-6.3% |
| 6 | Canada | 2.6-3.3% | 1.9-2.8% |
| 7 | Australia | 1.5-1.8% | 1.5-2.0% |
| 8 | Brazil | 2.0-3.8% | 1.1-3.1% |
| 9 | Italy | 1.7-2.0% | 1.5-2.0% |
| 10 | Spain | 1.7-2.3% | 1.4-1.8% |
| 11 | Netherlands | 1.2-1.8% | 1.3-1.8% |
| 12 | Mexico | 2.1-4.6% | 0.8-1.8% |
| 13 | Belgium | 0.7-0.8% | 0.8-1.2% |
| 14 | Switzerland | 0.75-0.9% | 0.8-1.1% |
| 15 | Austria | 0.5-0.7% | 0.8-1.0% |
| 16 | Sweden | 0.7-0.9% | 0.7-1.0% |
| 17 | Russia | 2.0-2.9% | 0.5-1.4% |
| 18 | Taiwan | 0.9-1.6% | 0.5-1.1% |
| 19 | Argentina | 0.5-0.7% | 0.5-1.0% |
| 20 | Denmark | 0.45-0.65% | 0.5-0.8% |
Physical single sales in the world in the 90s-00s and digital single sales in 2005.
| N | Country | Physical Sales Share | Digital Sales Share in 2005 |
|---|---|---|---|
| EU | 34-50% | 13.2% | |
| 1 | Japan | 26-32% | 1.7% |
| 2 | USA | 4-25% | 85% |
| 3 | UK | 14.5-16% | 6.3% |
| 4 | Germany | 9-12% | 5% |
| 5 | France | 4-12.5% | 1.9% |
| 6 | Australia | 1.8-4.6% | 0.48% |
| 7 | Netherlands | 1.3-1.7% | < 0.2% |
| 8 | Belgium | 0.8-1.8% | < 0.2% |
| 9 | Sweden | 0.6-0.96% | < 0.2% |
| 10 | Switzerland | 0.5-0.92% | < 0.2% |
| 11 | Austria | 0.58-0.82% | < 0.2% |
| 12 | Italy | 0.3-1.0% | < 0.2% |
| 13 | Spain | 0.3-0.7% | < 0.2% |
| 14 | Norway | 0.3-0.47% | < 0.2% |
| 15 | Ireland | 0.2-0.5% | < 0.2% |
| 16 | Canada | 0.1-0.6% | < 0.2% |
| 17 | Portugal | 0.01-1.0% | < 0.2% |
| 18 | RSA | 0.02-0.45% | < 0.1% |
| 19 | New Zealand | 0.19-0.29% | < 0.1% |
| 20 | Denmark | 0.10-0.25% | < 0.1% |
all figures in millions
| COUNTRY | UNITS | VALUE | CHANGE | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Singles | CD | DVD | Total Units | $US | Local Currency | Units | Value | ||
| 1 | USA | 14.7 | 300.5 | 11.6 | 326.8 | 4783.2 | 4783.2 | -5.70% | -5.30% |
| 2 | Japan | 28.5 | 93.7 | 8.5 | 113.5 | 2258.2 | 239759 | -6.90% | -9.20% |
| 3 | UK | 24.3 | 66.8 | 2.9 | 74.8 | 1248.5 | 666.7 | -1.70% | -4.00% |
| 4 | Germany | 8.5 | 58.7 | 4.4 | 71 | 887.7 | 689.7 | -7.70% | -5.80% |
| 5 | France | 11.5 | 47.3 | 4.5 | 56.9 | 861.1 | 669.1 | 7.50% | -2.70% |
| 6 | Italy | 0.5 | 14.7 | 0.7 | 17 | 278 | 216 | -8.40% | -12.30% |
| 7 | Canada | 0.1 | 20.8 | 1.5 | 22.3 | 262.9 | 325 | 0.70% | -4.60% |
| 8 | Australia | 3.6 | 14.5 | 1.5 | 17.2 | 259.6 | 335.9 | -22.90% | -11.80% |
| 9 | Spain | 1 | 17.5 | 1.1 | 19.1 | 231.6 | 180 | -13.40% | -15.70% |
| 10 | Netherlands | 1.2 | 8.7 | 1.9 | 11.1 | 190.3 | 147.9 | -31.30% | -19.80% |
| 11 | Russia | - | 25.5 | 0.1 | 42.7 | 187.9 | 5234.7 | -9.40% | 21.20% |
| 12 | Mexico | 0.1 | 33.4 | 0.8 | 34.6 | 187.9 | 2082.3 | 44.00% | 21.50% |
| 13 | Brazil | 0.01 | 17.6 | 2.4 | 24 | 151.7 | 390.3 | -20.40% | -16.50% |
| 14 | Austria | 0.6 | 4.5 | 0.2 | 5 | 120.5 | 93.6 | -1.50% | -9.60% |
| 15 | Switzerland ** | 0.8 | 7.1 | 0.2 | 7.8 | 115.8 | 139.2 | n/a | n/a |
| 16 | Belgium | 1.4 | 6.7 | 0.5 | 7.7 | 115.4 | 89.7 | -13.80% | -8.90% |
| 17 | Norway | 0.3 | 4.5 | 0.1 | 4.8 | 103.4 | 655.6 | -19.70% | -10.40% |
| 18 | Sweden | 0.6 | 6.6 | 0.2 | 7.2 | 98.5 | 701.1 | -29.00% | -20.30% |
| 19 | India | - | 10.9 | - | 55.3 | 79.2 | 3456.6 | -19.20% | -2.40% |
| 20 | Denmark | 0.1 | 4 | 0.1 | 4.2 | 73.1 | 423.5 | 3.70% | -4.20% |
| Top 20 | 74.5 | 757.1 | 42.8 | 915.2 | 12378.7 | -6.60% | -6.30% | ||
In its June 30, 2000 annual report filed with the SEC, Seagram reported that Universal Music Group was responsible for 40% of worldwide classical music sales over the preceding year.BUSINESS AND PROPERTIES The Seagram Company Ltd.
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