What Is Music Industry Analysis?

K. Kinsella

The music industry is composed of performers, producers, vendors that sell music and various other individuals and entities. People engaged in music industry analysis study trends that impact the industry as a whole as well as events and factors that influence certain components of it. Investors and financiers take these reports into account when making decisions about injecting cash into the industry. Within the music world, producers, performers and retailers consult analysts before making decisions about marketing events or embarking on new projects.

Music industry analysts may discuss the latest trends on the radio.
Music industry analysts may discuss the latest trends on the radio.

Production companies contract performers to produce songs and pieces of music that are then sold to consumers. Music industry analysis often includes studies that track the way consumers listen to music. In the 20th century, many people bought records and cassette tapes but as the century drew to a close large numbers of people began listening to music recorded on compact discs. During the 21st century, new mediums have been developed that enable people to listen to music through various types of electronic devices which means that records and tape cassettes have become obsolete in many areas. Technology firms and production companies tend to react to music industry analysis by ensuring that consumers have access to music through the channels that they prefer.

Cassette tapes are largely obsolete.
Cassette tapes are largely obsolete.

Aside from data related to listening devices, music industry analysis also tracks trends in terms of what kind of music people like to listen to. Styles of music such as rock, pop and hip-hop have risen and fallen in popularity over the years. When analysts find that consumers are increasingly listening to one style of music, producers attempt to cash-in on that by signing more performers who are able to produce that kind of music. On some occasions, well-established performers are released from recording contracts as the result of industry reports that suggest that the musical tastes of consumers have changed.

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Trends in the music industry can also impact firms that own and operate stadiums, theaters and other venues. Certain kinds of music sound better in particular types of venues. Consequently, venue operators may sell off certain property types and buy new buildings if music industry analysis suggests that people are more inclined to listen to music that is best heard in small theaters rather than stadiums or vice versa.

Retailers are heavily impacted by changing trends in the music world. Sales of musical instruments, sheet music and compact discs may rise or fall over the course of time and stores with unsold stock may run into financial problems. Therefore, retail executives typically review industry reports before making major inventory purchases.

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