Is the crisis in the music industry as bad as the record labels claim?

14 February 2007

On the evening of 14 February 2007, the music industry will meet in London's Earls Court for its annual jamboree known as the Brit Awards. It is an evening for self-congratulation and it is shown live at ITV1. At the same time, it will also help executives of Universal, Warner, Sony BMG and EMI to forget about issues in the industry. Since 2001, the overall market for recorded music in Europe has lost 22% of its value. This event matters a lot because the music industry is worth nearly £5 billion each year to Britain. The British Phonographic Industry or BPI also stated that its activities render the equivalent of 126,000 full-time jobs within the United Kingdom.

Britain is the third biggest market worldwide for music sales. In various ways, music has never been more appreciated by the business world, with its marketers being desperate to develop its commercial value. Manufacturers of mobile-phones are struggling to provide users the opportunity to watch the best music videos. Wealthy people are giving sponsorship money to live music festivals and venues. Despite all of that, the crisis is still there for the music industry to face.

Multiplicity is considered as the key to survival. Companies such as Sony BMG and Warner are confident that diversifying in areas like advertising, television and sponsorship will generate new potential earnings and opportunity for its artists.

Despite of the figures on balance sheets, British music is doing quite well. According to Peter Jamieson, chairman of BPI, British music is “going through a truly outstanding period of creative success”.