Decade Of Decline
The 2000s won’t go down in history as the era that saved the recording industry.
A recent examination by Forrester Research found that total revenues for music sales and licensing for the industry dropped from $14.6 billion in 1999 to $6.3 billion in 2009, CNN reported.
Average sales for albums reportedly declined 8 percent per year during that period, with much of that slide attributed to digital music downloads.
The company noted that following the shuttering of Napster and the birth of iTunes, many consumers discovered other free ways to download music, soon becoming accustomed to the idea.
“That four-year lag is where the music industry lost the battle,” Forrester analyst Sonal Gandhi told CNN. “They lost an opportunity to take consumers’ new behavior and really monetize it in a way that nipped the free music expectation in the bud.”
While new revenue sources such as ringtones and digital licensing have padded the balance sheet a bit, the industry has yet to make up for all lost sales.
According to Forrester, the music business could see revenues continue to slide to roughly $5.5 billion annually by 2014, until new revenue sources could put sales on track.