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Home > Consumer Products > Consumer Products & Retail > Entertainment
Music Production and Distribution
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| Published Date:
October 2008
Published By:
First Research, Inc.
Page Count:
10
Order Code:
R3470-1853
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The music production and distribution industry includes about 2,600 companies with combined annual revenue of about $15 billion. Major companies include Universal Music Group, Sony/BMG, EMI, and Warner Music Group. The industry is highly concentrated: eight companies account for 80 percent of industry revenue.
COMPETITIVE LANDSCAPE
Demand is driven by consumer spending. The profitability of individual companies depends on discovering and promoting new musical talent and generating revenue from the company’s asset base of recordings and publications. Large companies have advantages in marketing and distribution. Smaller companies, referred to as Indies, compete by focusing on artists within local markets or music genres. The industry is capital-intensive: average annual revenue per employee is about $475,000.
PRODUCTS, OPERATIONS & TECHNOLOGY
The major products of the industry are musical recordings (70 percent of revenue) and the publication of lyrics and musical scores (20 percent). Other products and services include the production of master recordings, the manufacture and packaging of physical CDs, and the production of databases to distribute downloads of recordings.
Major studios have musical artists - singers, rappers, and musicians - under contract to produce recordings that are either marketed as stand-alones or combined with other recordings as albums. The studios then promote the new recordings by sponsoring concert tours; providing music to radio stations to play on air; and advertising via radio, TV, print, and the Internet. Studios also promote the sale of music from their catalogs ...
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