The rise in digital music-sales is scant compensation. People tend to buy tracks, not albums, from sites like Apple's iTunes. They can obtain their favourite music much more cheaply than they could in the CD era. And even digital sales are now stalling. In Japan, mobile and online single-track sales rose only a shade during 2009. So far this year Americans have bought 841m digital tracks, mostly from Apple's iTunes, according to Nielsen Soundscan--down from 847m at this point last year. Apple now offers plenty of other opportunities to spend money, from iPads to more than 250,000 apps. Music executives believe the company is cannibalising the musical part of its own business.
Yet the music business is surprisingly healthy, and becoming more so. Will Page of PRS for Music, which collects royalties on behalf of artists, has added up the entire British music business. He reckons it turned over £3.9 billion ($6.1 billion) in 2009, 5% more than in 2008. It was the second consecutive year of growth. Much of the money bypassed the record companies. But even they managed to pull in £1.1 billion last year, up 2% from 2008. A surprising number of things are making money for artists and music firms, and others show great promise. The music business is not dying. But it is changing profoundly.
The longest, loudest boom is in live music. Between 1999 and 2009 concert-ticket sales in America tripled in value, from $1.5 billion to $4.6 billion. Ticket sales wobbled in America during the summer of 2010, but that was partly because some big-selling acts took a break. One of the most reliable earners, Bono, U2's singer, was put out of action when he injured his back in May. Next year many of the big acts will be on the road again, and a bumper year is expected.
It is not that more people are going to concerts. Rather, they are paying more to get in. In 1996 a ticket to one of America's top 100 concert tours cost $25.81, according to Pollstar, a research firm that tracks the market. If prices had increased in line with inflation, the average ticket would have cost $35.30 last year. In fact it cost $62.57. Well-known acts charge much more. The worldwide average ticket price to see Madonna last year was $114. For Simon & Garfunkel it was an eye-watering $169. Leading musicians have also, by roundabout means, seized a larger share of the mysterious "service" charges that are often tacked onto tickets.
Fans complain bitterly about the rising price of live music. Yet they keep paying for concerts. One reason is that the live-music experience has vastly improved. Lots of shiny new venues have been built since the mid-1990s, many subsidised by governments in the hope that they would revitalise decayed downtowns. And musicians are much more enthusiastic about performing live. The misery of touring was once a familiar musicians' gripe, inspiring songs from the Rolling Stones' "Torn and Frayed" to Ice-T's "Lifestyles of the Rich and Infamous". But those songs were written in the days when touring was a way of marketing recorded music. Now it is a direct source of profit.
However much fans pay to get into a venue (and thanks to ticket touts they often pay more than even the greediest artists charge) they tend to have cash left over. This they spend on merchandise. "We have grown along with the touring business," says Tom Bennett, the head of Bravado, which sells T-shirts and other paraphernalia. Bravado's revenues have more than doubled since 2007, when it was acquired by Universal Music Group--although that is partly because it has signed up new acts. And merchandise has moved well beyond the arena. Nearly all Bravado's turnover used to come from sales at concerts. Now about half comes from retail stores.
