While all industries are required to constantly adapt to the demands of the modern world, perhaps no other industry has adapted more over the past 50 years than the music industry.
The Death Of Vinyl
According to the Recording Industry Association of America (RIAA), 58.5 percent of music sold in 1983 was on vinyl, and nearly the entire balance (41.4 percent) was sold on cassette tapes.
By 1993, 51.8 percent of all music sold was sold on CDs. Cassette tapes retained a strong potion of the market share with just over 44.5 percent of sales. However, in just 10 years, the vinyl format had become nearly extinct, falling from 58.5 percent of sales to a negligible 1.7 percent of sales.
The Rise And Fall Of The CD
By 2003, the CD had gained the highest proportion of a single music format that had ever been tracked by the RIAA: 94.4 percent. Cassettes made up 2.2 percent of the market share, and vinyl accounted for 0.7 percent.
This time, the shift in the music industry was even more dramatic. By 2007, only four years after CDs had dominated like never before, CDs were down to only 27 percent of market share. The era of the iPod had begun, and digital and mobile downloads made up a combined 70.3 percent of music sales in 2007.
The Age Of Streaming
Now that 2015 is upon us, yet another major shift in the music industry is in its early stages. According to Nielsen Entertainment, total album sales (including CDs, cassettes, vinyl, and digital albums) fell by 9 percent in 2014. In addition, digital album downloads slipped by 9 percent in 2014.
Where has all the music gone lately? According to Nielsen, music streaming grew by a whopping 32 percent in 2014.
Streaming Competition
For investors looking to bet on the business of streaming music, there are plenty of choices. Pandora Media Inc P 3.72%, Google Inc GOOG 1.25% GOOGL 1.28%, Apple Inc. AAPL 0.78% and Amazon.com, Inc. AMZN 1.32% are all among those competing for share in the music streaming space.
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