NEW YORK, NY — Since the turn of the millennium, the recording industry has been singing the same blues song with the same refrain: CD sales are down, and paid downloads are not picking up the slack. But as a new report from eMarketer shows, while CD sales will continue to decline sharply, the music industry as a whole is healthy, and growth in many other areas will more than make up for the shortfall. That’s great news for marketers.
The growth will come from online and mobile music, the live concert industry and the licensing of music for public performance, commercials, TV shows, films and video games, according to eMarketer’s report
“The climate for marrying brands to musical artists has never been more favorable,” says Paul Verna, senior analyst and author of the report.
“Music remains as vibrant as ever.” In North America, the music business will total $26.5 billion in 2011, growing at an average annual rate of 2.8% from $23.1 billion in 2006.
Recorded music revenues will remain flat as declining CD sales cancel out the sharp gains in digital sales. Music publishing and live music, however, will grow. In one dramatic example, live tours were once used as marketing vehicles to promote recordings, but today that model is being flipped on its head as increasing numbers of top-tier and mid-level acts earn more income from concerts than from CD sales. Every major category of the live music industry has been growing and is poised for continued expansion, including ticket sales, merchandise sales, ancillary venue revenue and tour and special-event related sponsorships. “Brand marketers interested in reaching the coveted teen and 18-35 demographics should take note of the many possibilities that today’s music industry offers, and of the willingness with which artists and record companies will open their ears to any proposal that help them extend their own brands in an increasingly competitive environment,”
Mr. Verna says.