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Ups and Downs in Music

By: NMK Created on: September 13th, 2007
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Research compiled by eMarketer from recent surveys shows that the total market for music is much larger than it has been historically, but that nonetheless total expenditure on music is considerably lower.

The US data shows that while only 20% of the population were music purchasers in 1980, that figure had grown to 32% in 2006. While online piracy may well be more widespread, the overall effect of having music available online seems, in some ways, to be positive: the number of people who actually buy music is larger.


The negative side to this story is that the amount of money spent by music consumers is much lower than in the past. The average music buyer spent $198 a year in 1980; today they spend just $120. The overall effect is lower revenues for the music industry.


The big change in the industry over this period has, of course, been the rise digital downloads. The nature of the format arguably helps to explain the figures. Digital download services like Apple’s iTunes Music Store allow the purchase of single tracks at an exact fraction of the cost of a whole album. While historically consumers have been forced to buy 8-12 tracks at a time, in the form of an album, digital stores encourage sampling. It’s possible to get just the single you heard on the radio, without having to put up with 5-6 ‘fillers’.


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