Will streaming music kill the recording industry – or help it grow?

The recording industry, as with any media technology, has seen a seismic shift over the decades. From records, to cassette tapes, to compact disks and more recently mp3s, the industry has gone from strength to strength and found a way to monetize effectively. However, as streaming music eclipses conventional album sales, is there still a profitable future ahead for labels and their artists?

In the 2000s, traditional lines that once divided singers, instrumentalists, publishers, record companies, distributors, retail and consumer electronics have become blurred or erased. Artists may record in a home studio using a high-end laptop and a digital recording program such as Protools or use Kickstarter to raise money for an expensive studio recording session without involving a record company.

Artists may choose to exclusively promote and market themselves using only free online video sharing services such as YouTube or using social media websites, bypassing traditional promotion and marketing by a record company. In the 2000s, consumer electronics and computer companies such as Apple Computer have become digital music retailers.

New digital music distribution technologies and the trends towards using sampling of older songs in new songs or blending different songs to create “mashup” recordings have also forced both governments and the music industry to re-examine the definitions of intellectual property and the rights of all the parties involved.

Also compounding the issue of defining copyright boundaries is the fact that the definition of “royalty” and “copyright” varies from country to country and region to region, which changes the terms of some of these business relationships.

The Nielsen Company & Billboard’s 2012 Industry Report shows overall music sales increased 3.1% over 2011. Digital sales caused this increase, with a Digital Album sales growth of 14.1% and Digital Track sales growth of 5.1%, whereas Physical Music sales decreased by 12.8% versus 2011. Despite the decrease, physical albums were still the dominant album format. Vinyl Record sales increased by 17.7% and Holiday Season Album sales decreased by 7,1%.