This chart shows music industry revenues from ’73 to ’09 by format. Common belief is that digital piracy is killing the record industry, but it’s clear the CD era greatly inflated sales. What could be going on here:

With the CD, consumers were repurchasing albums they already owned on vinyl or tape. Forced obsolescence isn’t an issue with digital music. It’s relatively easy to burn music from CDs into the new format.

The 90s CD era featured the emergence of “alternative” music genres that widened the music buying audience. This doesn’t just mean grunge though. Mainstream country became a massive market. Garth Brooks became the best selling artist of all time and Shania Twain’s album Come on Over went 20x platinum.

Economic recession. People buy less stuff when the economy is bad. The 90s were good, the late 2000s, not as much.

This chart doesn’t show how the industry has changed. While sales have fallen, the concert  industry posted record years before the recession took hold.  And there’s also the music licensing and publishing industry that puts popular music in movies and commercials.

Home recording and online distribution is often seen as a response to record industry decline, but it’s a viable option for musicians to promote their work. Musicians can make and record music rather cheaply, distribute it online, promote on social networks, and build a following. The music industry is no longer in complete control of who becomes a star. Aggressive mass marketing is simply not as effective as community building.

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