Music Industry’s Search for Revenue Model May Drive Future Marketing

The recorded music industry  is still searching for the right business model that will generate the kind of revenues and profits that musicians and production houses once enjoyed. eMarketer’s outlook through 2013 foresees steady declines in industry revenues.  Sales of physical music, which totaled $4.32 billion in 2009,  are seen dropping to $960 million by 2013.

Digital remains the growth sector for music sales and eMarketer analysts are looking for sales to grow from $3 billion in 2009 to $4.56 billion in 2013. At that point, digital sales will have surpassed the level of physical sales experienced in 2009. In addition, mobile will shrink from the current 25% of digital sales to 16% of digital sales in 2013.

Sales of digital music occurs in the following formats:

  • Track downloads
  • Full album downloads
  • Music videos
  • Digital kiosks
  • Subscription services

While digital music sales are projected to increase, as eMarketer analysts indicate, consumers are nowhere close to spending the $14.6 billion that the industry achieved in 1999. And some of the business models that have been tried recently, such as ad-​supported download sites and ring tones, have not generated tremendous interest or profits. For now, companies are deploying new ways to make downloading and storing music easier. New strategies include storing all music in the cloud and allowing consumers to access their paid content via any device they have at hand. This could include computers, phones and game consoles.

As more companies experiment with producing and delivering music, look for an increase in online marketing campaigns to support the effort.

[Source: February 2020: Paid Music Content. IAB. n.d. Web. 22 March 2010] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.