Growth, recession, and recovery have all occurred in the music industry’s history. Vinyl record sales were significantly impacted by the development of the compact recordable cassette in the 1970s, which allowed consumers to duplicate cassettes at home with hi-fi equipment. In order to discourage people from creating their own copies, the British music industry launched a continuous education campaign in the early 1980s with the slogan “Home taping is killing music.” The market swiftly rebounded after Sony and Philips created and introduced the CD in 1982 as consumers embraced the new format, which offered digital sound quality. The recorded music industry went through its most significant expansion because CDs are more costly than vinyl LPs and consumers want to add new and interesting products to their collections of outdated records. When global sales of recorded music in all formats topped $25 billion in 1999, the industry reached its zenith.
Many things started to go wrong after that. The music industry faced the same issues as it did with blank cassettes in the 1970s and 1980s when CD copiers and blank CDs were commercially introduced in the late 1990s. This was due to the fact that, unlike DVDs, CDs were not protected against copying, despite major labels’ futile attempts much later to introduce a copy-protected CD.
However, a much bigger issue arose in 1999 when Shawn Fanning and Sean Parker created and released Napster, a peer-to-peer (P2P) file-sharing service online. Using broadband services that were still in their infancy, Napster enabled the quick transfer and sharing of audio files over the internet, frequently at high speeds. The service was created and launched in June of that year. The damage was done, and Napster was forced to shut down in July 2001, two years after the music industry banded together to file a lawsuit against the service and its owners. Similar to Napster, these other P2P services give users a simple and cost-free way to download MP3 songs. Then came Grokster, Limewire, Kazaa, and Gnutella.
Although millions of dollars were spent on legal defence, the music industry remained mired in a never-ending game of “whac-a-mole.” A new service would swiftly take its place after an existing one was shut down and declared illegal. The industry began to seriously deteriorate. It wasn’t until 2015 that recorded music revenues, which had dropped to less than $16 billion by that point, started to increase once more. Customers shifted to legal services like Apple’s iTunes download store, which don’t spread viruses or corrupted files, and stopped using unlicensed streaming services like Spotify, Deezer, Google Play, and Amazon Music.
The International Federation of the Phonographic Industry (IFPI) has projected that by 2021, the recorded music market will be worth US$23.6 billion. The market in the EU, the world’s second-largest region, grew by 3.5% in 2020.
By 2024, the global recorded music market is anticipated to continue growing at a rapid pace. Global recorded music revenues reached $28.6 billion in 2023, up 10.2% from the year before, according to the IFPI Global Music Report. According to the IFPI Global Music Report, the industry has seen revenue growth for nine years in a row.
Michael.Coyle@lawdit.co.uk
