Companies in this industry produce, sell, and license musical recordings; they may also own and license musical copyrights. Major companies include Sony Music Entertainment, Universal Music Group, and Warner Music Group (all based in the US), as well as Avex Group (Japan); Edel (Germany); and GMM Grammy (Thailand).
The US is the world's largest recorded music market by sales, followed by Japan, the UK, Germany, and France, according to the International Federation of the Phonographic Industry (IFPI). The adoption of digital downloads and streaming services is helping drive growth in Argentina and South Korea. Digital channels account for 46% of global industry revenues.
The US music production and distribution industry includes about 3,700 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $12 billion.
Demand is driven by consumer spending. The profitability of individual companies depends on discovering and promoting new musical talent and generating revenue from the company’s asset base of recordings and publications. Large companies have advantages in marketing and distribution. Smaller companies, many of which are independent record labels (often referred to as “indies”), can compete effectively by focusing on artists within local markets or music genres. The US industry is highly concentrated: the top 20 companies account for more than 80% of industry revenue.
Most of the major companies involved in music production and distribution operate internationally. Sony Music Entertainment's parent company is Sony, a Japanese company, and Universal...