What Is The Music Industry? Modern Definition & Brief History

Heard the term ‘music industry’ but aren’t sure what it means or how it relates to the music you hear? Well today we’re going to simplify the definition of music industry, as well as give a brief history of the music scene.

What Is The Music Industry? Definition

The music industry is a broad term for businesses and organizations that create, record, produce, and distribute music. It encompasses everything from the major record labels and radio stations to small independent labels and local clubs.

The music industry has its roots in the early days of recorded music, when songs were first published and sold as sheet music. As recording technology improved, music could be recorded and distributed on physical formats like vinyl records, cassette tapes, and compact discs.

With the advent of digital technology, music can now be produced and consumed in various ways, from streaming services to online downloads.

What Roles Define the Music Industry?

The modern music industry comprises many players, from the major record labels to the small independent labels and everyone in between. Here is an overview of some essential roles in the music industry:

Record Labels

Record labels are businesses that sign artists to record and release music. They also handle marketing, promotion, and distribution. The three major record labels in the United States are Universal Music Group, Sony Music Entertainment, and Warner Music Group.

Radio Stations

Radio stations are another essential part of the music industry. They are crucial in promoting and exposing new music to the public.

Music Publishers

Music publishers control the rights to songs and collect royalties on behalf of the songwriters. They also help promote and market songs to record labels and radio stations.

Artists

Artists are the main force behind the music. They write and perform the songs that we all enjoy.

Producers

Producers are responsible for creating the sound of a recording. They work with artists to create the perfect sonic landscape for their songs.

Engineers

Engineers work in the studio to create the final sound of a recording. Musicians are the people who perform the music. They may be part of a band or an orchestra or play solo.

The music industry is a complex and ever-changing business. It constantly changes with the latest technology and consumer trends. But at its core, the music industry is all about the music and the people who create it.

Early History of the Music Industry

Before the mid-1800s, the church and wealthy patrons produced almost all music outside people's homes.

The mid-1800 brought the first possibilities to mass market songs and music with the rise of sheet music and songbooks. A song could become popular if performed by a touring group across the country.

The first popular songs were minstrel songs, which were racist and offensive by today's standards, but they started the idea that anyone could buy and enjoy a song.

Publishers sold sheet music of these songs for people to play at home on the piano. This was the first real music industry. Songwriters wrote the songs, publishers sold the sheet music, and performers earned money by playing the songs live.

The Phonograph Emerges

The subsequent big development in the music industry was the phonograph and records. This allowed people to listen to music at home without attending a live performance.

The phonograph created a new way for people to enjoy music, but it also created new challenges for artists and songwriters. They now had to find out how to get people to buy their records.

The first major music labels were Columbia and Victor, which were founded in the late 1800s. These companies signed artists and produced their records.

Vaudeville and Tin Pan Alley-style songwriting arrived, which was more family-friendly and less offensive. This is when we start seeing the names of early songwriters like Irving Berlin and Cole Porter.

Records eventually replaced sheet music as the most crucial music-related product.

The Rise of Radio

The next significant shift in the music industry came with the rise of radio in the 1920s. This gave songwriters a new way to reach people with their music and created a new way for people to discover music.

For the first time, all people, not just the wealthy, could hear performances by symphony orchestras and opera companies.

The radio also created a new way for people to connect with their favorite performers. It made celebrities out of singers like Bing Crosby and Al Jolson.

The music industry took off with the advent of the radio. This allowed artists to reach a much larger audience and allowed people to listen to music anytime, anywhere. Artists could now achieve national or even global fame without traveling to perform.

The radio also created new opportunities for music labels and publishers. They now had a way to promote their artists and sell more records.

The radio also allowed for the rise of commercialism in music, as companies began sponsoring songs and using them to sell their products.

The rise of the record industry in the 1920s led to the first real competition between artists and labels. Artists wanted to get paid more for their records, while labels wished to keep their costs down.

This led to the first artist-led rebellions, with singers like Crosby and Jolson leaving their labels to start their own companies. It also led to the first unionization efforts by artists.

The next major development in the music industry came with the invention of television in the 1950s. This allowed artists to reach an even larger audience and sell more records.

The next few years saw the rise of different genres of music, like jazz, rock n' roll, and country. This created different sub-industries within the music industry, like record labels and concert promoters.

The Great Depression hit the recording industry hard but also created new opportunities. The rise of movies created a new market for music, and the popularity of swing jazz helped keep people's spirits up during tough times.

The Second World War had a similar effect, with the US government using music to raise morale and promote patriotism. We start seeing songs like “God Bless America” and “This is My Country.”

The postwar years were a wonderful time for the music industry. The baby boomer generation was coming of age and had money to spend on music. This led to the rise of rock ‘n' roll and the popularity of artists like Elvis Presley and the Beatles.

The Fifties: Dollars and Discrimination

The 1950s were an excellent time for record labels and a nightmare for most artists. Contracts were unfair, especially for black artists. Musicians like Little Richard saw their songs co-opted by white artists like Pat Boone, who was more welcome on mainstream TV. The licensing fees for these songs went right to the record labels.

Touring wasn't a picnic for black artists, either. Many venues were still segregated, and police and concertgoers assaulted black artists several times. Martha Reeves told a story about someone shooting at her tour bus in the deep south.

Elvis Presley's hit Hound Dog was first recorded by Big Mama Thornton, who received nothing. Big Mama and co-performer Johnny Otis went after the Presley camp, but they lost in court.

Classic artists like Buddy Holly, The Everly Brothers, The Coaters, Ray Charles, Johnny Mathis, Fats Domino, Ricky Nelson, and many more dominated the charts in the '50s

Influential blues artists like Muddy Waters and Bo Didley produced albums for Chess Records in Chicago. Sam Phillips formed Sun Records in 1952 and recorded Elvis Presley, Jerry Lee Lewis, Carl Perkins, Roy Orbison, Johnny Cash, and B.B. King.

The Sixties: The British Invasion and Motown

The 1960s saw the rise of album-oriented rock, a new way of making and marketing music. Many important and influential artists emerged during this decade, as did some groundbreaking record labels.

The British Invasion rocked the world with The Beatles, The Rolling Stones, The Animals, The Yardbirds, Dave Clark Five, and The Kinks.

Folk music had a significant resurgence in the '60s with Bob Dylan, Simon and Garfunkel, and Crosby, Stills & Nash.

Psychedelic rock emerged from San Francisco with The Grateful Dead, Jefferson Airplane, Big Brother and the Holding Company, and Santana.

Motown, a Detroit-based record label started by Berry Gordy, created pop versions of soul music with artists like The Four Tops, The Supremes, Marvin Gaye, The Temptations, and the Jackson Five. An unstoppable stream of Motown hits started in 1961 and continued for the rest of the decade.

The 1960s were a turbulent time, politically and socially. The music industry was no different, as artists used their platform to speak against discrimination and the Vietnam War. Marvin Gaye's What's Going On is a perfect example of this. The lyrics talk about the struggles of the African American community, and several radio stations banned the song.

The Seventies: Louder and Faster

The 1970s saw many changes occur in the music industry. Rock music exploded with Led Zeppelin, Pink Floyd, The Who, AC/DC, and many more artists, while disco dominated a few years later. Elvis faded away while glam, progressive, and punk stepped up.

While there were massive acts before, like The Beatles and The Rolling Stones, the '70s saw the first mega-artists come on the scene. The most prominent example is Pink Floyd's album Dark Side Of The Moon, which has sold over 45 million copies.

Disco emerged from the funk scene by creating poppier, more danceable songs with greater mainstream appeal. Critics often derided this genre, but it had a massive following among young people.

The disco era ended abruptly in the late 1970s with the rise of punk rock. Punk was a reaction against the excesses of disco and the complacency of mainstream rock.

It was loud, fast, and rebellious, with a do-it-yourself ethic that inspired many young people to start their own bands. Improvements in amplifier technology led to extensive rock tours increasing in popularity.

The 1970s represented when the music industry began transitioning from traditional to modern.

The Eighties: MTV and CDs

The 1980s saw significant changes occur in the music industry. Cassettes were huge, and, in a preview of the Napster era, record companies were concerned that people creating mixtapes from the radio were cutting into sales.

MTV also caused monumental changes in the industry with the rise of music videos and the accompanying celebrity culture. For the first time, the image became just as important as the music.

Videos were considered essential advertisements for artists, but record companies generally did not pay for them. This caused artists to incur more debt as production costs ballooned throughout the decade.

Due to cost-cutting measures, low-quality vinyl hurt record sales in the late '70s, and cassettes degraded with repeated plays. The emergence of the CD in the '80s suddenly introduced a medium that played perfect reproductions every time.

Record companies loved CDs because they were cheap to produce, and consumers were willing to pay $15 for an album. The period after the introduction of CDs generated the most profits ever for the music industry.

Cassettes started outselling vinyl in 1984, and CDs outsold vinyl in 1988. Seeing new music on vinyl became rare. Artists began endorsing products at a rapid pace.

Despite multiple new income streams, most artists were still not making much money. Underground artists gained popularity through college radio, but the music industry mostly ignored them. Great music came out of these scenes, but independent record labels rarely survived for long.

The Nineties: Lawsuits and Lethargy

The 1990s were another challenging time. Pearl Jam fought Ticketmaster over outrageous “service fees,” but these charges remain in place today.

Sampling in rap music generated a string of lawsuits that still define how artists produce music today. Clearing samples is so expensive that most artists don’t attempt it.

Radio stations began to merge under the umbrella of massive corporations. DJs lost the ability to choose the songs they played, and music became more homogenized. MTV transitioned from showing videos to showing reality programming.

The focus on music censorship during the ‘80s continued into the ‘90s. MTV imposed strict requirements for lyrics and many artists had to record alternate clean versions of songs.

Boy bands and young female stars were massive in the ‘90s. You know them: NSYNC, Backstreet Boys, Britney Spears, and Christina Aguilera. The industry, including Lou Perlman, NSYNC and Backstreet Boys manager, exploited these kids for years.

It wasn’t all doom and gloom. Some classic music emerged in the form of grunge, groundbreaking hip-hop, EDM, and Britpop, to name just a few genres. Nirvana, Wu-Tang Clan, Prodigy, and Oasis are just some of the artists that defined the ‘90s.

Illegal Digital Downloads – the Napster Era

In the 2000s, digital downloads and streaming began to overtake sales of physical recordings. Consumers could access almost any music they could think of and get it for free. The music industry was lagging behind this new technology and struggling to gain ground. Record stores and record companies began to close, and artists had to find new ways to make money.

The industry took a stand against the illegal peer-to-peer file sharing enabled by companies like Napster, but it was too late. High-profile lawsuits against prolific downloaders did not have the desired impact.

These legal actions targeting consumers were terrible PR for labels, and the public continued to pirate music. The floodgates were open, and people loved the ability to download thousands of songs.

Modern Digital Downloads and Streaming Services

In 2003, Apple iTunes finally began to offer legal digital downloads, and the industry slowly began to recover. Sales of digital music surpassed sales of physical music in 2011.

Today, the music industry is still adjusting to the digital age. Music streaming has become the most popular way to listen to music, generating new revenue for the industry. But it is not enough to make up for the loss of sales from physical recordings and digital downloads.

2010 saw the emergence of internet streaming services like Spotify and Pandora. These services allowed users to listen to music for free, with ads between songs. They also offered a premium subscription that allowed users to listen without ads.

iTunes allowed users to own a download copy of a song on their computer. Streaming services removed this component and only allowed users to listen with a required subscription to a service.

Artists complain they are not being compensated fairly by streaming services. These services pay artists based on market share, which is the number of streams of their songs as a percentage of all songs on the service. Spotify, for example, pays a maximum of $.008 per stream. This conflict is ongoing.

The rise of streaming has caused another decline in sales of physical recordings and digital downloads. But it has also created new opportunities for the industry. Artists can now reach a global audience more efficiently than ever before.

Touring is now a requirement for artists as ticket sales and merchandise sales are the best way to generate significant income.

Artists are still struggling to make a living, and many are turning to alternative sources of income like brand partnerships.

Today many artists are seeing the benefits of remaining independent. They may not have the global reach of giant music companies, but they retain the rights to their music and control their careers' progression, which is much more important to many artists that selling out large stadiums.

Services like Patreon allow fans to donate money to artists they like and often receive exclusive music and concert benefits in return. Donating via Patreon also allows fans to connect with their favorite artists.

The future will likely see the music industry continuing to fragment as artists move away from traditional record labels. The proliferation of streaming has made standard distribution obsolete, and more musicians today understand the benefits of controlling their intellectual property.

But not everything is new. Music is starting to sell again on high-quality vinyl. The combination of cheap vinyl, the cassette, and the CD killed vinyl's first era. Now, however, people are enjoying the tactile pleasures of a spinning record and an album sleeve.

What Is The Music Industry? Final Thoughts

The music industry is evolving, and it will be interesting to see what the future holds. Will physical recordings make a comeback? Will artists find new ways to make money in the age of streaming? Only time will tell.

But one thing remains the same: people love music and are willing to pay for it.