Music industry analysts study trends and events affecting the industry, which can impact production, marketing, and sales. Changes in listening devices and music preferences can lead to shifts in the industry, affecting venues and retailers. Investors and lenders also rely on industry analysis to make decisions.
The music industry is made up of artists, producers, marketers who sell music, and various other individuals and entities. Music industry analysts study the trends affecting the industry as a whole, as well as the events and factors affecting certain components of the industry. Investors and lenders take these ratios into account when making decisions about injecting cash into the industry. In the music world, producers, artists and retailers consult analysts before making decisions about marketing events or embarking on new projects.
Production companies rely on artists to produce songs and pieces of music which are then sold to consumers. Music industry analysis often includes studies that track how consumers listen to music. In the 20th century, many people bought records and cassettes, but as the century drew to a close, large numbers of people began listening to music recorded on compact discs. Throughout the 21st century, new means have been developed that allow people to listen to music through various types of electronic devices, meaning that tape records and cassettes have become obsolete in many areas. Technology companies and production companies tend to react to music industry analysis by ensuring that consumers have access to music through the channels they prefer.
In addition to listening device data, the music industry analysis also tracks trends in terms of the type of music people like to listen to. Styles of music like rock, pop and hip-hop have increased and become popular over the years. When analysts discover that consumers are increasingly listening to a style of music, producers attempt to cash in on it by signing more artists capable of producing that type of music. On occasion, established artists are released from recording contracts following industry reports suggesting that consumers’ musical tastes have changed.
Trends in the music industry can also affect companies that own and operate stadiums, theaters and other venues. Certain types of music sound better in certain types of venues. As a result, venue operators may sell off certain types of property and purchase new buildings if music industry analysis suggests that people are more inclined to hear music that is best heard in small theaters rather than stadiums, or vice versa.
Retailers are greatly impacted by changing trends in the music business. Sales of musical instruments, sheet music, and compact discs can go up or down over time, and stores with unsold titles could run into financial problems. Therefore, retail executives typically review industry reports before making major inventory purchases.
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