The US Recorded Music Market in the Light of the Billboard Hot 100 – the 1960s

In February 2011, Billboard Magazine celebrated the 1,000^th number one hit of the Hot 100 single chart since its introduction in September 1958 by listing all number one hits with links to YouTube videos and additional information. I used this list as a starting point to analyse the preferences of US music consumers for artists and music genres and how major and indie labels economically profited from it. Part 1 of the analysis highlights the top chart positions of the Billboard Hot 100 in the 1960s.

EU Copyright Term Extension in Sound Recordings to 70 Years – An Economic Assessment

On September 12, 2011 the EU Council of Ministers passed the copyright term extension in sound recordings from 50 to 70 years, which was proposed by the European Commission in 2008 and voted on by the European Parliament in 2009. The term extension was welcomed by the music industry bodies and several musicians. The newly appointed IFPI chairman Plácido Domingo called the extension great news for performing artists which “(…) reflects the important role performers play in success of songs by narrowing the gap between the protection offered to recorded performances and that offered to compositions.” IFPI CEO Frances Moore added that “The extension of the term of protection to 70 years (…) improves the conditions for investment in new talent.” In first statements U2 manager Paul McGuiness and ABBA’s Björn Ulvaeus applauded to the EU decision.[1]

On the other hand, the extension is criticized by open access activists, but also by most of the academics in the field of intellectual property rights. In an open statement to the European Parliament the who-is-who of IP-law professors and economists, including Nobel laureats Sir James Mirrlees and Kenneth Arrow, opposed the copyright term extension as an ineffective and unnecessary extension of monopoly rights in 2008[2].

Thus, the question arises, what is the economic rational for such a term extension? What are arguments and counter-arguments and how they can be assessed by economic theory?

The UK Music Business 2010 – A Summary of Will Page’s and Chris Carey’s ‘Adding up the UK Music Industry 2010′

It’s now the third time that Will Page and Chris Carey from PRS for Music added up the UK music industry. The main result is that total UK music revenues fell 4.8 percent to £3.775bn in 2010 compared to £3.964bn the previous year. This figure includes the retail value of recorded music (-7.9% to £1.237bn) as reported by the British recorded music industry body (BPI), the estimated revenue of live music (-6.8% to £1.480bn), the adjusted collections by PRS for Music (-1.3% to £0.425bn), the adjusted collections by PPL and VPL (+18.9% to £0.079bn), the estimated inter-company B2B revenues (+7.2% to £0.218bn), the publishers’ direct revenues excluding income streams from PRS for Music (+0,6% to £0.242bn) and advertising and sponsorship revenue (+4.2% to £0.094bn).

Will Page and Chris Carey, „Adding Up the UK Music Industry 2010“, Economic Insight, Issue 23, 04.08.2011

The Early Record Industry in Australia – Part 6

For several years the Australian music industry was dominated by a few players who enjoyed a more or less monopolistic position. In the infant period of the industry Edison Co. dominated the record business with its cylinders and from 1931 on EMI had the monopoly of record distribution in Australia, which was not challenged until the end of World War II. Therefore, the period with a considerable level of competition in the Australian music industry lasted from 1924 to 1931.

There is Music in the Cloud

The launch of music locker services by online retailer Amazon and search engine Google opens a new round of discussion on the future of music distribution. Are cloud based music services the main business models of the future music industry or is it just a hype with a lot of hot air in the cloud?

In the following you like to answer this question.

The Radiohead Revolution?

The British alternative rock band Radiohead caused a sensation when they announced on their website on October 1, 2007 that the new album In Rainbows was completed and would be released in 10 days for free. Fans were instructed to obtain a registration code in order to download the new album in MP3-format. Music consumers were left to determine the price on their own – ranging from US$ 0.00 to US $ 99.99. The response was overwhelming, and within a few weeks more than 1.2 million downloads were counted. According to the Internet market research firm comScore, 38% of the fans paid an average of US $ 6 per album, which resulted in US$ 2.4 million in revenue. Is this business model really as revolutionary as it appears at first sight?

The recession in the music industry – a cause analysis

Filesharing is made primarily responsible for the decline in sales in the phonographic industry, especially in the CD segment (see the current IFPI Digital Music Report). However, serious research on filesharing behavior (see Huygen et al 2009, Andersen/Frenz 2007, Oberholzer-Gee/Strumpf 2007 (working-paper March 2004), Blackburn 2004) shows that filesharing use does not necessarily have a negative impact on physical and digital sales. But if this is not the case, then there must be other causes for the now decade-long recession. In the following I would like to discuss alternative explanations for the recession in the music industry and try to substantiate them empirically.

Business model “Michael Jackson”

The death of Michael Jackson on June 25, 2009 triggered a sales boom for his music. The American industry magazine Billboard published Soundscan sales figures for his albums the week after the “King of Pop’s” death, showing three of his albums occupying the top positions in the U.S.-album-charts and five more of his albums entering the Billboard-Top-50-list. Jackson’s music also ruled the weekly iTunes and Amazon download-charts after his death.

The CD is dead! Long live the music download?

The economic crisis exacerbates the recession in the music industry. Recorded music sales have been in sharply decline for years. Digital music offerings on the Internet and via mobile phone cannot compensate for the losses. One reason: The wrong licensing policies of the record labels.

The music industry cannot escape the general economic and financial crisis. In 2008 a dramatic slump in sales of recorded music for nearly all markets was reported. But the economic crisis only reinforces a downturn in the market for recorded music that begun already in the late 1990s. Thus, in the largest music markets the CD unit sales dropped in the period from 2000 to 2008 between 35% (United Kingdom) and 59% (USA). This recession, however, is a symptom of a paradigm shift from music delivered in form of a physical product to music as a service delivered in form of online and mobile music offerings.