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The Difference Between the Music Industry & The Recording Industry

(This was originally posted on Think Like a Label on January 16, 2012)

After publishing Why You Should Give Your Music Away for Free here on Music Think Tank, I have been inundated with articles, comments, and other assorted replies decrying that the new digital music business models are killing the music industry. It got me thinking about a crucial distinction that is being overlooked, and the consequences of doing so are preventing many from seeing the opportunities that are abound. It boils down to one main concept.

The Music Industry is different than the Recording Industry, and these terms should not be used interchangeably. 

Allow me to explain.

The Music Industry is a huge, overarching behemoth that includes all kinds of different smaller industries. For example:

  • Recording
  • Licensing
  • Touring & Live
  • Merchandise
  • Print & Web Design
  • Publishing
  • Marketing, Advertising & Public Relations
  • Video Production
  • Magazines & Newspapers
  • Instrument Design & Manufacturing
  • Music Hardware & Software

These are just the ones off the top of my head…I could go on if I kept thinking about it. The bottom line is that any business that is involved in music in any way can be considered part of the music industry. If you are a graphic designer who spends their time designing album art, or a bus driver who drives tour busses all over the country, then you are in the music industry.

The Record Industry is just one small subset of this larger “music industry.” Within the business world, it’s known as a vertical. The record industry is in the business of making money off the recordings of music. That is why the companies who participate are called “Record Labels.” They sell records, i.e. recordings. You may have heard of the RIAA, a political lobby whose mission it is to protect the major record labels. Notice that its called the RIAA – the Recording Industry Association of America. They are not called the Music Industry Association of America. That’s because they represent only a small subset of the industry as a whole.

It is critical to make the distinction between these two terms. Mind you, I am by no means the first person to bring this to light. But too many people are crying about the death of the music industry lately, and I wanted to remind everyone that the sky is not falling. The Music Industry as a whole is fine. There is a new wave of innovative business models that take into account the new economic realities of the industry. It is the Recording Industry that is in trouble, and without some serious innovation by the interested parties, it’s likely to get worse for them.

Jeremy Belcher is the Editor of Think Like a Label, a magazine for musicians & their people. Prior to that, he co-founded FoxyMelody Digital Distribution in 2005, one of the first companies that distributed independent music to the online music services (which we shut down this year). You can follow him on Twitter @thinklikealabel or visit Think Like a Label

Reader Comments (11)

But record labels now pretty much are only interested in 360 deals, so the record industry has now widened and become the music industry. You post would be true of the old business models but now the music industry and record industry are becoming one of the same.

February 2 | Registered CommenterRobin Davey

I agree with you that its necessary to make the distinction between the recording industry and the rest of the music industry. I m only curious if the recording industry's part is indeed to be considered 'small'. Any idea what the annual turn over is for the music industry as a whole and which part the recording industry has? I have a feeling that the recording industry is still responsible for a large part of the total turnover. If this is true that means its roll is significant and shouldn't be dismissed as only a small part because what happens to the recording industry could have a profound effect on the whole industry. We should keep a close eye on the developments and be supportive if we can I think. In the meanwhile I'm all in favor of creating new business models of course.

February 2 | Unregistered CommenterMoos

At the end of the day, it's about your business and where you sell your wares!

February 2 | Unregistered CommenterAnne Leighton

But recording industry is a catalyst of this business, just to mind u. After all i like and agree all of your points. Thank u

February 3 | Unregistered Commenterhjrozman

This is true - it is the old school thing that is failing. I would go more specific than the recording industry and say it is the CD selling industry that is disappearing and because this has been such a key element of the industry's business model it is seen as the 'death of music'.

February 3 | Unregistered CommenterAndy

You are absolutely right it is the CD industry that is disappearing. The world of MP3 is eliminating our beloved physical copies. And it is no wonder, a tiny device can now store an entire library of music and artwork that people not long ago didnt have the space to store at home, and they can carry it around in their pocket and listen to anytime anywhere... The industry is changing beyond recognition. Those who dont get with the program will be left behind. I would just like someone to tell me what the program actually is so I can make some money out of it. Because right now I am giving my music away for free because I accept that I will never make any real money out of it as a small unknown artist. In fact the only money I do make is out of gigs. So what future does the recording industry really have? A future of earning from gigs and paying for recording ourselves.... Yeah, it is a different world. The music doesnt pay for itself. It is us who must work for it by gigging it live.

February 4 | Unregistered CommenterAlan Redmond

The NAMM 2011 Global Report pegs musical instrument sales, including recording gear (hardware & software) and PA equipment, at $6.93-billion for FY2010. FY2011 is tracking higher. Products is just one of many music industry sectors as you reiterate.

Aside, for those commenting they give their music away for free—quit it! You should NEVER give away a digital download without getting an email address in exchange. I'm currently writing a case study on a band who signed a major label deal after a viral hit on YouTube. The band's manager told me the labels were quite impressed with the fact the band showed up at the table with 80,000 email addresses. And, for the record, they said no to all 360-deals.

February 5 | Unregistered CommenterStephanie Kellar

Thanks everyone for reading and commenting, it's very much appreciated.

@ Robin

Thanks for your comment! I am a fan of your articles on Hypebot.
There's no doubt that the record companies are moving that way. Once they have fully made the transition, I would venture to say that we shouldn't call them record companies anymore. They'll need some sort of new name…"Artist Service Companies" maybe? If they change what they call themselves, perhaps they would be more open to trying out new models.


Good catch. Perhaps small wasn't the best choice of words. I was only trying to point out that it is only one piece of the overall pie, but at the moment I imagine it is still a pretty sizable piece.


For better or worse, I agree with you. Recorded music is going to very quickly dry up as an income stream for artists, and it's important they find new ways of making money.


Good call. I am all for people exchanging some sort of "social currency" in exchange for a download, whether it's email addresses, a tweet, a FB message, etc.

February 6 | Registered CommenterJeremy Belcher

You overlooked the MOST important subset of the music industry, the one that has grown exponentially in less than two decades to overtake the majors as the largest source of music production in the world: the independent music industry.

Indies have turned the music industry on its ear, and unseated an oligarchy that held a global stranglehold on the entire business for 50 years.

As for the recorded music business, it was a blip, ushered in only 135 years ago by Thomas Edison at his laboratory in Menlo Park, New Jersey when he invented the "phono-cylinder" back in 1877. The entire recorded history of music in human civilization dates back at least 50,000 years. For millennia, we did not have "recordings" to define music as a trade, and yet it flourished and grew.

Now that the recorded music bubble has burst, the industry will continue to flourish and grow, adapting to the new realities as it always has for many thousands of years.


February 6 | Unregistered CommenterNoel Ramos

It was creative of you to be able to differentiate both industries. It's true that a lot of people are confused with the individual concepts of music and recording. Posts like this can help clarify the subject. Being in the industry ourselves, making plectrums like mandolin picks, we are delighted with available information like this.

February 23 | Unregistered CommenterV-picks

Thank the author so much for this best article. Great work!

February 25 | Unregistered CommenterEllisa

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