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Viewing report
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Music Retailing in the United States 2005
Mintel, Dec 2005, Pages: 127
In recent years, the music industry has been forced to reconcile with many new shifts in the ways consumers want to discover and listen to music. The industry’s traditional business model has been permanently fractured in the digital age. New distribution methods and technology such as file sharing, online retailing, portable digital players, CD burning, ring tones, music service providers and more have put the industry in a continuing state of upheaval.
The four parent companies that control, market and distribute all the major labels in the world--EMI, Sony BMG, Warner Music Group and the Universal Music Group--have been slow in accommodating new revenue streams and consumer demand. Now more than ever, the divide between the music industry and its consumers is widening. The consumer has partnered with digital media to exploit a newfound independence for the distribution and exposure of new music while, to the music industry, it continues to be technology that must be controlled and regulated.
This report will focus on how these issues have affected sales of physical music product, which has been on a steady decline since 1999. It will also explore the changing face of music retail, where big box discount chains like Wal-Mart have emerged as leaders and music specialty stores have faltered. The rise of digital media will also be accounted for, from the growing rate of digital music sales to the popularity of online merchants to new music-related technology such as mobile phones and portable digital players that have created revelatory revenue streams for the industry and revolutionized consumer listening habits.
The focus of this report is on the retail distribution of pre-recorded music, including both prepackaged and digital products. Retailing channels include traditional bricks-and-mortar locations, online, and direct selling via tape and record clubs.
The major retail categories covered in this report include the following:
- Specialty retailer: includes independent and chain stores that primarily sell pre-recorded music.
- Non-music specialist: this category includes mass merchants, discount stores, and electronic and book stores with a significant music product category.
- Internet: pure-play retailers who do not have an offline presence. Revenues or other relevant online activity for specialty and other retailers with an online presence, unless otherwise noted, are included in the retailers’ profile. Sales data for the online channel include any music sold via an online retailer, regardless of whether the business is primarily online or offline.
- CD and DVD club: music sold direct to consumers through mail order or online tape and music clubs.
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