For quite some time, we've been calling out recording industry insiders and their ridiculous stats concerning "losses" from piracy and the like. The most common pattern is to not count where displaced money goes, and if it still benefits the industry. So, for example, many studies would count every downloaded copy as a "lost sale," but would never take into account if that download resulted in the downloader deciding to go to a show and shell out a bunch more cash on merchandise. We're not saying that always happens, but most of the industry studies would onlycount data that supported their basic premise that the music industry was in trouble and "something must be done." That's highly misleading -- especially when such numbers are then used to make policy.
So consider me a bit surprised to see the following report (thanks Ian) out of the UK, from PRS's economists, Will Page and Chris Carey, where they try to look more closely at the real numbers and conclude that for all the whining and complaining, the UK music industry is actuallygrowing
Let me repeat that: despite all of the whining and complaining about the state of the music industry, some of the music industry's own economists are admitting that the market is growing.
Not surprisingly, it found that retail product sales have declined, but the other parts of the industry have grown noticeably more than the decline in retail sales. This growth has come from a few sources. Live show attendance has increased more than retail sales have decreased. Consumers have actually spent more. On top of that, the business to business side of the industry (sponsorships, licensing, advertisements, etc.) has grown as well, opening up new and lucrative means of making money.
Admittedly, there are some facts that could potentially temper the results: including claims of the rather uneven distribution of live revenue (big acts get a lot, others perhaps not as much) and worries that without enough support for smaller acts they won't ever be able to get big enough to make that kind of revenue. So, the fear is that it's all just "legacy acts" that are touring and making money, rather than new acts being encouraged the to get big. This is a charge some others have raised in the past, and it certainly bears watching, though I believe, pretty strongly, that it's an issue that works itself out as various additional business models get developed.
Still, it's quite amazing to see that a music industry study (even one from a non-profit like PRS) actually admits that the overall industry is actually growing.