Blame Apple? An Industry Outlook

TThe last couple of months have been rather boring for the music industry. No new revenue stream has opened up. No sudden increase of album sales has been registered, thanks to a beloved musical icon dying. The labels have even cut back enough so that some of them are earning an operating profit (Warner Music Group made $87 million in the first three months of 2010, according to Fast Company), so we can dispense with the doom and gloom scenarios. While there still are some industry behemoths struggling under the weight of horribly-performing traditional revenue streams, the more-dynamic companies in the industry sphere have managed to turn profitable by signing 360-deals with the artists that they represent.

With all this drab but-not-quite-tragic news filling up the industry press releases, what can we really write about? Ironically some think that Apple, who helped revitalize the industry only a few years ago, is now hurting it.

The days of the iPod are slowly disappearing into the past. You may have noticed it when Apple failed to make any iPod the centerpiece in September 2009 during their Apple Day (note: in their Apple Day of 2010 the buzz re-focused somewhat on revamped iPods). The buzz about Apple these days involves a different sort of device, focusing almost exclusively on the iPhone and the iPad. Apple is the trendsetting company for many of younger urban professionals that tend to spend more on entertainment. With an increased focus on multi-purpose devices instead of solely iPods, Apple has helped direct the attention of the trendsetting masses from music to a broader media focus.

But is this Apple’s fault? A look at the census data reveals a wider pattern of media usage that has shifted away from music. Take a look at the table attached to the article.

Source: 2010 Statistical Abstract, US Census Bureau

As you can see, we are listening to less and less music per year, while at the same time mobile media consumption has soared. (for the full data set from the US Census bureau, check out this) Apple’s iPad and iPhone are only indicators of a shift that has happened in American media consumption, not the trendsetter behind it.

The outlook for the music industry looks similar to the chart; money spent on music parallels time spent listening to it, and while these statistics project increased revenues in 2010, they also weren’t predicting the recession that still grips the United States. So the outlook then for the music industry is similar to that of the overall economy: slow and measured, but looking to stabilize within the next two years. You can tell your friends to cut it with the gloom and doom stories and look to the bright side, because the music industry is looking to be in good position for the years ahead.