Demand vs supply in the music industry

An article in Medium argues that the biggest phenomenon that has shaped it in the 21st century has been an utter divergence between supply and demand. In short: our ability as humanity to consume music is (roughly) a constant, yet the amount of available music is cumulative and growing exponentially. Anyone with a rudimentary understanding of economics can figure out what infinitely growing supply meeting stagnating demand does to value.

Another argument could be stagnating demand. Volume of hours of listening to music likely increased worldwide. And we have to separate the recorded music industry (the one we mostly talk about where sales went down by 50% and are starting to go up again) from the entire music industry (e.g. publishing, live). Music in films, in games, in elevators, everywhere.

Big hits are big hits and will remain to be financially lucrative. There are just less of them, but bigger (“short head getting shorter”). This is the red part of the attached image. Hobbyists will remain hobbyists with no interest nor real opportunity to make money. This is the yellow part. This used to be thicker and shorter, but is getting longer and thinner by the day as the market gets more saturated. The middle is where there used to be some $ to be had, but not so much anymore.

popularity vs products


Both comments and pings are currently closed.

Comments are closed.