What is the music industry? – The most fundamental understanding of the music industry you need to know

Music plays an important role in our lives. Music helps us unwind after a long day at work, improves our focus on our tasks, and boosts our energy levels at the gym. People listen to music on a daily basis, but not everyone is aware of how those incredible songs are made. The answer lies in the music business. Landofmusic.us will provide you all the details you need to know about the definition, history, and other information about music.

What is the music industry?

What is the music industry?

What is the music industry?

Here is the most exact definition of the music industry. In general, the music industry is a segment of the economy that generates a closely linked set of goods and services in the field of music at the same time as other industries. The music business consists of singers, bands, and organizations who make money (music royalties), by developing and performing songs and musical arrangements, producing and selling recorded music and sheet music, arranging and selling concerts; and the organizations that assist and represent musicians

Who is in the music industry?

The people that operate in the industry include the songwriters and composers writing songs and musical compositions; the singers, musicians, conductors, and bandleaders who display the music; the record labels, music publishers, recording studios, music producers, audio technician, retail and digital music stores, and performance rights organizations who create and sell prerecorded music (music revenues) and sheet music; and the booking agents, promoters, music venues, and audio engineers who help organize and sell concerts.

Music industry structure

Music industry structure

Music industry structure

Artists and composers

A brilliant artist or celebrity has an undeniable ‘ability.’ One can be shown without using a technical arsenal. At the drop of a hat, celebrities may wow with their talent and personal magnetism. The music industry exists to produce stars. Everyone else is simply butter and bread.

Artists and celebrities require amazing music, which is where composers come in. A well-written song may make a composer wealthy. However, defining, let alone writing, a great song has proved elusive to those who have tried. Great songs have ethereal magic to them.

Managers in the music business

The managers represent artists & composers (record producers too) in their dealings with recording and publishing companies & all other necessary industry bodies. Managers understand the ways and language of that ‘music biz’ in ways that artists often do not.

Managers will employ, in behalf of their artists, accountants, lawyers, agents, and tour managers and deal with that day-to-day running of their artists’ career. In return, a manager would typically receive 20% of an artists’ income. Fact: more managers are being left by artists than artists are by managers. Managers deal with all of those problems and receive none of the glory.

Production companies

These often contain an alliance of managers, producers, musicians, and composers who cynically ‘create’ an individual or group with teen appeal and then sell the package to a record industry. They are largely responsible for the many ‘plastic’ and disposable pop products which come and go.

Not all production companies produce ‘commercial’ products. Many excellent artists have emerged from smaller independent organisations created to develop the career of those unique talents who have been ‘passed over’ by the major record organisations.

Production companies

Production companies

Publishing companies

A composer assigns their copyrights to a publisher in an entitled ‘publishing deal’. Publishers license the use of these copyrights to record organizations who record them. Every CD manufactured and sold generates a ‘mechanical publishing ‘royalty’ that is paid by the record company to the MCPS (in the United Kingdom) who then pass it on to the publisher who takes a cut % passes the rest to the composer. Typically a publisher will take between 35% & 15% of the royalty depending on their deal with the composer.

The publisher will also try to license their copyrights to film and commercial producers to generate as much income as possible.

A composer will profit in three ways from such a deal.

Through a structure of foreign agency and sub-publishing deals, the publisher will be able to collect royalties on the side of the composer worldwide.

Should a copyright infringement take place the publisher would have the financial might to sue the pirate on behalf of that composer.

The publisher will promote and seek additional exploitation of the copyrights, therefore, generating additional income for the composer.

Record companies

Record companies exist to either empower or exploit (according to your point of view) an artist’s creativity by giving financial and organisational structures to support the recording, manufacture, distribution and progression of artists recorded work. In signing a new artist, a record organization financial risk is great. Large sums of money will be invested to contribute to the initial recording, filming and promotional activities that accompany the launch of the new artist.

According to statistics given us by an industry insider two years past, a certain major company (alright, it was Sony) expected only two per every ten signings to recoup their initial investments and to make benefits long term. Of course, these profits can be huge but clearly so is that failure rate. Look at it this way, George Michael financed a fine many new artists during his stay at CBS.

It’s important to recognize the fact record companies exist to exploit an artist’s ability to sell recordings for the advantages of the artist and the company. They do not excel in ‘producing’ artists. If you are not a performing musical talent in your own freedom or have not already established a following they will not notice you.

Record companies

Record companies


The success or failure of a CD release largely depends on a record companies’ ability to secure exposure on TV, radio, and print media and then distribute copies effectively to retail shops. It is no good creating demand for a CD that remains unavailable for sale.

Big record companies have manufacture and distribution structures in place. Without access to those structures through licensing deals, an independently produced CD is unlikely to succeed at the marketplace. If an independent label manages to generate a high range of broadcast and print media interest in their artists’ work through effective promotion. It will need to strike a deal with either a major record agency or independent distribution company. Therefore they could ensure the widespread availability of theirs CDs in retail outlets.

When you strike a licensing deal with a big record company, most of the organisational issues to do with preparing a CD for retail will be handled for you. If your deal is with the independent distribution company you will probably need to do several things yourself before providing the artwork and CD master.

Above are the most basic information about the music industry for anyone interested. To get more information about the music industry such as music streaming, music careers, etc, visit our website landofmusic.us 

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