Group 22: Research : State of the music industry

"Music is Thriving, but the business is dying. Who can make it pay again?"
This quote is the headline for 20 February, 2011 issue of the Guardian.

Despite all the hype about Digital revolution, the music industry, as represented by the major record labels, is in serious financial trouble. Sales were down 7% last year in the U.K and by nearly 10% in the United states, the world's largest music market.
Two of the four music majors, Sony and Warner Music, admitted their pre Christmas sales were down 10% and 14% respectively.

It has been a decade since piracy and the arrival of iTunes which destroyed the notion of an album on favor of single, downloadable tracks, but the music industry has found nothing to repair lost CD sales.
The music industry has roughly halved in size since the last days of the CD-fuelled peak, when NSync's No Strings Attached album could sell more than 10m copies in 2000, but the hope was that one day, digital sales would pick up the growth as CD sales or physical sales leveled off. However, in the US, from where all music business trends start, download sales growth has all but stalled, posting just 1% growth throughout 2010.
Both the small record shops and big ones are in trouble. The fall of Woolworths and Zavvi has been followed by problems for HMV has lost 60 stores.

Solutions??? & !!!

However, the industry has come up with diverse new strategies in dealing with this crisis.

Radio head: The honesty approach is one of the methods in which people could donate whatever they thought the album was worth, but it was priced at £6 for an open format MP3 download or £9 for a higher "CD-quality" WAV format file.

Deluxe Edition: This is when the physical product is made more attractive and interesting. For example, Katy perry's new album is a nude picture of the pneumatic singer lying in a cloud of candyfloss, the audience are also given a fairground treat as the pack also smells of candyfloss.

Ellie Goulding: who likes to run and sing hooked up with Nike and through her facebook page invited a small number of selected fans to run with her in seven different citie son her U.K. tour. A label niche market.

Spotify: Many hope that music subscriptions services such as Spotify in Europe and Pandora in the United States, can generate new, meaningful forms of revenue. A streaming service with free advertising service. With more than 500,000 paying customers to its £9.99 a month all-you-can-listen-to-service.