The article discusses how the music industry is struggling due to declining music sales as people are buying and paying less for recorded music. It provides several examples: 1) Radiohead released their album "In Rainbows" allowing fans to pay whatever they wanted, including only 1p, showing that recorded music has become more of a promotional tool. 2) Several other bands are giving their music away for free to promote concert ticket and merchandise sales, which are now more profitable. 3) Album and music sales have sharply declined worldwide while concert ticket prices have soared, showing live performances now generate more revenue. 4) Record labels are making much less money per album as margins have shrunk,

1. Year 10
BIDDULPH
HIGH BTEC IN MUSIC
SCHOOL
Exploring the music profession | Units 1 and 2

2. Task 1
List as many different types of business which make money from music as you can
Task 2
Draw lines between each area to show how each depends on the others
Task 3
For each area, say what they do and give an example of a company working in this area
Area What they do Example
2

3. Read this article from the Sunday Times in 2007:
The day the music industry died
There is no money in recorded music any more, that’s why bands are now
giving it away
Robert Sandall
Having waited four years for their heroes to finish another record, Radiohead fans were
understandably excited last week to learn that the band’s seventh album, In Rainbows, will
finally be released on Wednesday. But what really rocked the fanbase – and heightened the
air of gloom enveloping the global record industry – was the news that In Rainbows could be
preordered and downloaded perfectly legally for as little as 1p at Radio-head.com.
Currently out of contract and thus entitled to dispose of their recordings as they see fit, one of
the most popular bands in the world had decided to let the fans decide how much their latest
album was worth. An MP3 file of In Rainbows would have no price tag. Honesty boxes, it
seemed, were the new rock’n’roll.
If the Radiohead faithful appeared somewhat nonplussed by this move – “The danger is that
people will stop seeing their music as important,” one fan posted in a blog; “I will gladly pay
$20 knowing the artist will get the money,” pledged another – the band’s strategy was
anything but mad, and not even that revolutionary. Last week the Charlatans announced they
would be giving away their new album as a free download. Earlier this year another rock
band, the Crimea, did the same.
In July Prince arranged for 2.5m copies of his new album to be cover-mounted on a Sunday
newspaper and issued several hundred thousand more free of charge to anybody attending
his London concerts in August. The scale of this charitable epidemic can be measured by a
quick browse of the Free Albums Galore blog that lists more than 800 albums by a range of
artists – from the Beastie Boys to some unsigned metal bands – all of which are free to
download.
3

4. What looks like commercial suicide is, in today’s reality, sound business sense. Records, CDs
or downloads now have all become downgraded to the status of promotional tools – useful to
sell concert tickets and fan paraphernalia. While there is still good money to be made in
music, and particularly on the concert circuit, the record business – blame it on piracy, too
many CD giveaways or the advent of the recordable CD – is a busted flush.
A revealing story doing the rounds in America tells of a young rock band who decided to stop
selling their CDs at gigs after they discovered that by offering their CDs for $10 they were
cannibalising sales of their $20 T-shirts. The truth now is that a rudimentary cotton garment
with a band logo stamped across it that has probably been manufactured for pennies in a
Third World sweatshop costs about twice as much as an album recorded in a state-of-the-art
western studio. And even at that price, recorded music isn’t selling.
Album sales are currently in freefall all over the world. The 10% drop in the UK over the past
year is dwarfed by a 15% slide in the US, 25% in France and a whopping 35% in Canada.
The bankruptcy this summer of the CD retail chain Fopp, HMV’s announcement that its profits
halved in the first six months of this year and Richard Branson’s recent decision to dump the
Virgin Megastores – which have reportedly lost him more than £50m in 2007 – are only the
most visible signs of a crisis that has rocked the music industry on its axis.
The point isn’t just that people are buying fewer CDs; they are paying as much as two-thirds
less in real terms today for the music they listen to on their iPods than they used to when the
compact disc first took over the market. Twenty years ago a chart CD cost about £14. Today
you can buy the same in a super-market for £9.
The online market may have grown recently, but not enough to fix the hole. Here, too,
margins have shrunk. A download of a single track now costs 79p against the £4 a CD single
cost in 1999.
The impact on the bottom line of the record labels has been catastrophic. When EMI’s
subsidiary Virgin put out the Spice Girls’ debut album in 1996 the company cleared roughly £5
in profit on each copy sold. That margin has since shrivelled to around £2 – and only then for
albums that are significant hits. Industry insiders estimate that only one of the new British acts
that has “broken” in 2007 – the pop diva Mika – will actually make his record company any
money.
This has not gone unremarked in the City. When the private equity firm Terra Firma bought
EMI recently it paid about a third, in real terms, what the company nearly fetched 10 years
ago when a sale to its competitor Universal was mooted. That decline mirrors what has
happened over the same period to the retail price of new CDs, and it also reflects the scale of
the cull of EMI’s workforce, which has shrunk in 10 years from more than 10,000 worldwide to
about 4,000 today.
The mood of panic is palpable, and there are no obvious solutions in sight. In America the
recently appointed co-chairman of the Columbia label Rick Rubin, formerly a record producer
by trade, has spoken of his ambition to turn the company around by refocusing it along the
lines of a cable TV business – making Columbia’s entire catalogue downloadable to
customers who pay a monthly subscription.
4

5. Another senior figure at Columbia has dismissed this plan as “potentially the last nail in the
coffin”. The recent establishment of a “word of mouth” department at the label reflects the loss
of control felt within a business that has lost a grip on its market.
One – fading – hope of the major labels is that they can somehow grab a share of the profits
their artists make elsewhere. When Robbie Williams resigned to EMI in 2002 for a reported
£80m this new deal guaranteed the label a piece of the action from Williams’s highly lucrative
concert tours. But many young artists since have become wary of such composite
arrangements. Some have decided to bypass the major record companies altogether.
One of the hottest new names to emerge here this year, the rave metal band Enter Shikari,
refused to sign to anybody and in March released their debut album, Take to the Skies, on
their own label Ambush Reality. In the past these tiny, so-called indie labels have usually
been funded by majors anxious to covertly purchase credibility for their products with a young
audience traditionally distrustful of big music corporations.
But that is not how it is with Ambush Reality. The marketing of Take to the Skies was largely
down to the band themselves, who have played nearly 700 gigs since forming in St Albans in
2003. Word of mouth, coupled with a band presence on MySpace, has done the rest.
In November 2006 Enter Shikari became only the second unsigned act after the Darkness to
sell out the leading London rock venue the Astoria. Take to the Skies entered the album chart
at number four in March. In May they undertook a major tour of America – the first British
band to do so without the support of a big record company.
This upending of the music business was neatly predicted back in the 1990s by the guitarist
of the American hardcore band Anthrax who described their new album as “the menu; our
concert is the meal”. This comment recalled the Beatles’ producer George Martin’s
observation about his protégés’ first LP, Please Please Me from 1963. It was, Martin said,
“just a memento of a concert”. Now, likewise, bands sell CD recordings of their performances
at the end of the night.
The reprioritisation in recent years of live music over the recorded variety has been dramatic.
Attendance at arena shows rose here by 11% last year. By the time 2007 bows out, 450
music festivals will have taken place in the UK.
Every week brings news of another frenzied assault on the box office. Last Monday Ticket-
master reported that 20,000 tickets for the Spice Girls’ first reunion concert at London’s O2
arena in December sold out in 38 seconds, with 1m fans registering to buy. Three weeks back
more than a million clamoured for seats at the forthcoming Led Zeppelin reunion. Glastonbury
disposed of its 135,000 weekend passes for this year’s event within two hours – taking more
than £21m in the process.
Ticket prices, especially for Alist artists, have soared as the price of CDs has tumbled. You
could have bought Madonna’s entire catalogue for less than half what it cost to see her
perform at Wembley Arena last summer where the best seats in the house went for £160.
With the Rolling Stones at Twickenham a view from the pitch would have set you back £150.
Now that live music rules, nobody bothers to complain about what it costs any more. Euphoria
at the news earlier this year that the Police had reformed obliterated all concerns that it cost
5

6. between £70 and £90 to see them play at Twickenham in September. I spoke to many fans at
one of those gigs; not one complained about the ticket price.
In the light of these numbers, the probability is that music fans now are spending more money
on their passion than they were in the heyday of the CD. They have rediscovered an ancient
truth that music is, at root, a communal experience as much as it is something that goes on
between your ears.
Interestingly the band now tolling the death knell of the record industry, Radiohead, seem
currently to have mixed feelings about live work.
“They probably will be playing some dates next year,” a spokesman said last week. “But
Thom Yorke doesn’t like touring much.”
Task 3
Summarise the main points of this article
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Task 4
The following are some sources for where you can get or buy music – work out how much
you have listened to, got hold of or bought for each category:
Purchased CD
CD borrowed from friends
Library
iTunes
legal download
illegal download
radio
internet streaming
tv
live performance
6

7. Bluetooth
Sheet music
Other?
Compare your findings with the rest of the class and produce graphs for the amount of
music listened to and the amount of money spent in each category
Task 5
Debate the future of music – are new ways of consuming music like file-sharing and
streaming killing the music industry?
Possible sources for 1.1
http://www.hmvgroup.com/aboutus/
http://en.wikipedia.org/wiki/HMV_Group
http://en.wikipedia.org/wiki/Warner_Music_Group
http://www.wmg.com/
http://en.wikipedia.org/wiki/Music_publisher_(popular_music)
http://new.umusic.com/overview.aspx
http://en.wikipedia.org/wiki/ITunes_Store
http://www.apple.com/itunes/whatis/
Possible sources for 1.2
http://www.howto.co.uk/careers/music-industry-jobs/
http://www.unicornjobs.com/guides/working-music-business/
http://www.soundjunction.org/section1/default.aspa
www.bbc.co.uk/radio1/onemusic/industry/
7