Michael DeGusta does a nice job analyzing “The REAL Death of the Music Industry” at Business Insider.

In terms of revenue per capita, the recorded music business has gone down from $71 in 2000 to $26 in 2009 (2011 dollars).  In terms of raw revenue, the take fell from about $19 billion in 1999 to $8 billion in 2009, divided as in this chart:

There are more charts, looking at singles vs albums, digital versus physical, and other splits.

DeGusta is presenting facts, not preaching so he stays low-key – here are some interesting facts; make of them what you will. The overall focus is the point we try to hit here at DigSoc, which is that this is a societal problem of how to set up an institutional structure that can overcome the centripetal forces of digital copying and allow the creation of the vibrant music industry that we all want.

One comment noted that article addresses only a segment of the industry, recordings, to which DeGusta responded:  “I completely agree it’d be interesting to see the whole music ecosystem (& globally as well). I would also be very curious to be able to get good data on the non-financial state of music: are people listening to more music, more artists, et cetera via whatever means, even if they’re paying a lot less in aggregate.”

The comments are good, too. My favorite might be bb:

There’s something here that the average person doesn’t understand; it takes a lot of money to make some music.

People keep talking about the cost of physical media like that’s the overhead for record companies. The overhead is spending 10’s of thousands of dollars on recordings that may or may not sell. And these days they don’t, so they’re not spending the money.

What you may not realize is that in addition to the revolution of digital music, there was a revolution in recording as well. You used to have to have a recording studio to make a record, now you can do it at home. That is a blessing and a curse. The problem? Because of the decline in budgets and sales most people have to do it at home. It’s impressive when someone makes a movie at home in the computer (which is also possible now) but would you want all movies to be made at home by one guy with a computer? It’s not really the level of quality that we want in movies, but that’s where we’re headed with music. I don’t mean that like theoretically, I mean that’s what happening right now. There’s no money.

All those great records from your past were not made by one person at home, even the ones with one guy and guitar. But these days they are. Recording studios are closing (most of them gone from even 10 years ago) and producers and engineers are leaving to do something else. There’s no money.

In the days of Sinatra you had a guy that could sing and entertain, someone else wrote the song, someone else arranged it, someone else produced the record, another person recorded it, etc. After that you had people who wrote their own songs and and soon everyone was expected to do that (the Beatles didn’t start out writing their own songs). Nowadays an artist is expected to perform, write, and even produce and record their own music much of the time, and every thing else that goes into an album. Because there’s no money.

The point is that there are very few people that are talented enough to do all that, or have the inclination. Like I said before, it would be like if most of the movies you saw had to be directed, filmed, edited, written and acted by the people in it with home equipment. How good do you think those movies would be?

You can make a decent sounding record at home these days. You cannot make a record of the quality of you can in a good studio, with good producers and engineers, etc. But soon people won’t know that because it’s all going away. And everyone will say “why don’t songs sound as good as they used to?”. Oh wait, that’s now.

You don’t want to pay taxes, you get to live in a crappy country. You don’t want to pay for music, you get crappy music.

And there is also this cry from musician Chris Gates:

I am a musician, and I am here to tell you that the revenue lost in CD sales is not being made back in live performance fees. The truth is that, for the most part, the live music concert/club going audience is getting older and not going out as much. I live in Austin TX, where there are tons of musicians and music venues, and there are NONE with a core audience in their 20′s. None… When my teenage kids want to escape from their world for a while they play computer games instead of listening to music. They like music, and they even buy music, but it isn’t the defining element that it was for older generations. Grunge sucked all the fun out of rock music, and gangster rap sucked the fun out of black music, so the kids went elsewhere.

Another factor to consider is that according to some admittedly rough research I did a while back in 1981 (the year my first record was released) there were something like 7200 records released world-wide. In 2004 there were something like 104,000 released, and this is only the number of CDs that Soundscan reported on. There were probably another 50,000 being sold only at gigs, ect… that didn’t ever get a bar code. So not only are sales going down, but the pie is being divided into ever smaller slices. And forget about getting paid for your back catalog… bittorrent will see to that.

30 years ago it took a bit of a creative leap to even consider being a musician, and now it’s just another option available to every middle school kid, There is 4-5 times as much great music now as there has ever been, but there’s 200 times as much music, which means we are being buried in an avalanche of mediocre music. Happily, we have reached a point where being in a band no longer makes you cool, and the field is so crowded that there’s no ego stroke from playing live cause no one is in the audience. Hopefully this will result in a thinning of the herd over the next 10 years so that only the truly dedicated stick with it, and the quality of music will get better and the money will go into fewer hands. Or it will all come crashing down and the only music available will be the mass market Lady Gaga crap and music made by people who can somehow afford to do it for free.

Tough time to be a musician, but like many others, I’ve tried to quit and can’t manage it. so I guess we’ll just have to wait and see how it all shakes out.

[Cross-posted at Digital Society]