Changes In The Music Industry

18th Century

Until the 18th century, the processes of formal composition and of the printing of music took place for the most part with the support of patronage from aristocracies and churches. In the mid-to-late 18th century, performers and composers such as Wolfgang Amadeus Mozart began to seek commercial opportunities to market their music and performances to the general public. After Mozart's death, his wife (Constanze Weber) continued the process of commercialization of his music through an unprecedented series of memorial concerts, selling his manuscripts, and collaborating with her second husband, Georg Nissen, on a biography of Mozart.

19th Century

In the 19th century, sheet-music publishers dominated the music industry. In the United States, the music industry arose in tandem with the rise of blackface minstrelsy. In the late part of the century the group of music publishers and songwriters which dominated popular music in the United States became known as Tin Pan Alley.

20th Century

The early 20th century, the recording of sound began to function as a disruptive technology in music markets. With the invention of the phonograph, invented by Thomas Edison in 1877, and the onset of widespread radio communications, the way music is heard was changed forever. Opera houses, concert halls, and clubs continued to produce music and perform live, but the power of radio allowed even the most obscure bands to form and become popular on a nationwide and sometimes worldwide scale.
The "record industry" eventually replaced the sheet music publishers as the industry's largest force. A multitude of record labels came and went. Some note-worthy labels of the earlier decades include the Columbia Records, Crystalate, Decca Records, Edison Bell, The Gramophone Company, Invicta, Kalliope, Pathé, Victor Talking Machine Company and many others.[5]
Many record companies died out as quickly as they had formed, and by the end of the 1980s, the "Big 6" — EMI, CBS, BMG, PolyGram, WEA and MCA — dominated the industry. Sony bought CBS Records in 1987 and changed its name to Sony Music in 1991. In mid-1998, PolyGram merged into Universal Music Group (formerly MCA), dropping the leaders down to a "Big 5". (They became the "Big 4" in 2004 when BMG merged into Sony.)
Genre-wise, music entrepreneurs expanded their industry models into areas like folk music, in which composition and performance had continued for centuries on an ad hoc self-supporting basis. Forming an independent record label, or "indie" label, continues to be a popular choice for up-and-coming musicians to have their music heard, despite the financial backing associated with major labels.

21st Century

In the 21st century, consumers spent far less money on recorded music than they had in 1990s, in all formats. Total revenues for CDs, vinyl, cassettes and digital downloads in the world dropped 25% from $38.6 billion in 1999 to $27.5 billion in 2008 according to IFPI. Same revenues in the U.S. dropped from a high of $14.6 billion in 1999 to $10.4 billion in 2008. The Economist and The New York Times report that the downward trend is expected to continue for the foreseeable future—Forrester Research predicts that by 2013, revenues in USA may reach as low as $9.2 billion. This dramatic decline in revenue has caused large-scale layoffs inside the industry, driven retailers (such as Tower Records) out of business and forced record companies, record producers, studios, recording engineers and musicians to seek new business models.
In the early years of the decade, the record industry took aggressive action against illegal file sharing. In 2001 it succeeded in shutting down Napster (the leading on-line source of digital music), and it has threatened thousands of individuals with legal action. This failed to slow the decline in revenue and proved a public-relations disaster. However, some academic studies have suggested that downloads did not cause the decline. Legal digital downloads became widely available with the debut of the iTunes Store in 2003. The popularity of internet music distribution has increased and in 2009 according to IFPI more than a quarter of all recorded music industry revenues worldwide are now coming from digital channels. However, as The Economist reports, "paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs."
The turmoil in the recorded music industry has changed the twentieth-century balance between artists, record companies, promoters, retail music-stores and the consumer. As of 2010, big-box stores such as Wal-Mart and Best Buy retail more music than music-only stores, which have ceased to function as a player in the industry. Recording artists now rely on live performance and merchandise for the majority of their income, which in turn has made them more dependent on music promoters like Live Nation (which dominates tour promotion and owns a large number of music venues.) In order to benefit from all of an artist's income streams, record companies increasingly rely on the "360 deal", a new business-relationship pioneered by Robbie Williams and EMI in 2007. At the other extreme, record companies can offer a simple manufacturing and distribution deal, which gives a higher percentage to the artist, but does not cover the expense of marketing and promotion. Many newer artists no longer see any kind of "record deal" as an integral part of their business plan at all. Inexpensive recording hardware and software has made it possible to record professional quality music in a bedroom and distribute it over the internet to a worldwide audience. This, in turn, has caused problems for recording studios, record producers and audio engineers: the Los Angeles Times reports that as many as half of the recording facilities in that city have failed. Changes in the music industry have given consumers access to a wider variety of music than ever before, at a price that gradually approaches zero. However, consumer spending on music-related software and hardware has increased dramatically over the last decade, providing a valuable new income-stream for technology companies such as Apple Inc.