Sunday, September 25, 2011

Playing on repeat: Economic ... - Arts Richmond Entertainment

Firms in the music industry produce original sound master recordings such as CDs, and promote and distribute them to wholesalers, retailers and consumers. Music publishers acquire and register copyrights for compositions; promote, authorise and use compositions in recordings, television, and various other media; and publish music and sheet books. Publishers either own the copyright or act as administrator of the music copyrights on behalf of the copyright owners.

The?music industry in the UK?is in decline as years of falling record sales have eaten into music publishers? royalty streams and weakened demand for sound recording studios. Large players dominate the industry, with the big four (i.e. EMI, Warner, Sony and Universal) accounting for an estimated 57% of industry revenue.

There are two distinct businesses within the music industry industry: music publishers, which earn about 80% of revenue; and sound recording studios, which draw the other 20%. Demand for sound recording studios has weakened as the industry?s major market as the record companies have reduced their investment in producing recorded music. Increasingly budget conscious, record labels are using less studio time and cutting back on the more expensive, premium studio services. In addition, advancements in recording technology have led to the proliferation of backyard studios, which has increased competition for studios and squeezed profit margins. In the music publishing business, sharp drops in record sales have reduced revenue received from mechanical royalties. Music publishers have responded by negotiating new agreements with recording artists and with the users of licensed music. They have met with some success in developing areas such as synchronisation royalties. Video games for example, have been an area of strong growth for publishers. In the five years through 2010-11, industry revenue is expected to fall by 1% per annum to total ?939.7 million.

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Music publishers and sound recording studios face difficult times ahead, with the music industry in the UK projected to contract in size over the coming years. Although music publishers have begun to diversify their sources of revenue, royalties from record sales still represent about 75% to 80% of revenue for most businesses. Another problem for the industry in coming years will be diminishing demand for services as technology allows recording artists to bypass traditional recording studios and music publishers altogether. Industry revenue is forecast to fall by 2.0% in 2011-12, to ?920.9 million.

The merger of the Gramophone Company and the Columbia Graphophone Company founded Electrical and Musical Industries, or EMI, in 1931. EMI has since grown to become one of the largest record and music publishing groups in the world. EMI businesses include EMI Records, EMI Music, and record labels such as Virgin Records, Capitol Records, Astralwerks, EMI Latin, Priority Records and Chrysalis Records. EMI has a broad catalogue of music spanning various genres, including pop, country music, and film and theatrical compositions.

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To purchase the full report visit:?www.ibisworld.co.uk

Source: http://www.artsrichmondhill.com/2011/09/playing-on-repeat-economic-conditions-are-not-getting-any-better-for-the-music-industry/

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