Consumer Spending – The Fuel That Funds the Music Industry
Adapted from Chapter 5, Chapter 10, & Chapter 15
Consumer spending has always been the fuel to fund and sustain the careers of the creators and performers of popular music. From the coin in the jukebox, to the cash register at the record shop, to the venue turnstile, the music business has managed and maneuvered itself into a multi-billion dollar juggernaut fulfilling the needs and dreams of consumers and creators alike.
The three pie charts that follow are taken from the infographic illustrations in American Popular Music and its Business in the Digital Age. The book is divided into three sections covering 1985 through 1995, 1996 through 2006, and 2007 through 2019. Each chart provides an estimated summary of consumer spending on music in the final year of each time period.
From 1985 to 1995, digital technology transformed consumer listening from both the LP at home and the cassette tape cartridge in the car, to the more durable but also more expensive CD. As the Clinton economy of the mid-1990s began to soar, so did recorded music consumption rising from $4.6 billion in 1985 to $12.3 billion in 1995. Consumers not only bought CDs of new releases, but also replaced their LP collections with CD versions.
Concurrently live music expanded from clubs and bars to theaters and arenas, and on to amphitheaters and coliseums, along with expansive outdoor locations for both festivals and one time spectaculars. Live performance has always been and will always be the ultimate social media event and music-immersive experience for the truly dedicated music consumer.
In the 1996 through 2006 decade the Napster foray into home duplication via digital file-sharing expanded consumer access beyond just what was available through the record/radio/retail marketing and promotion alliance. Although Napster was branded as a pirate and shut down in a flurry of law suits, its influence persisted as its user base shifted to other illicit platforms. Consumer dollars spent on recorded music continued to declined steadily. While Apple’s iTunes offered a legal alternative for acquisition of digital files, it merely slowed the migration of consumer spending away from recorded music while spending on live performance tripled in volume.
In the midst of the 2007-2019 time period revenue from recorded music stalled at around $7 billion annually until 2016 when licensing revenue from ad-supported streaming services joined with paid subscription revenue to total over $11.1 billion in 2019 despite the continuing decline in purchase of both physical and digital product. The spending on live performance in 2019, however, combined with ancillary costs and charges, grew to over 80% of total public spending on music which reached an estimated $46.2 billion, almost double 2006’s $24.1 billion.
CONSUMER SPENDING ON MUSIC IN 1995. From Chapter 5: From Whom, How, and Where the Money Flows.
CONSUMER SPENDING ON MUSIC IN 2006. From Chapter 10: The Emergence of the Digital Consumer.
CONSUMER SPENDING ON MUSIC IN 2019. From Chapter 15: The Consumer: Leading the Digital Transition.
