Here's a hypothesis, let's see if we can flesh this one out:
1: The peak of the Music Industry was in 1999, with approximate 16.4 billion dollars in sales of CD's alone.
2: It's less than half that now.
3: On-line Music sales have only made up for less than 3 billion dollars of the short fall.
4: The video Game industry has grown vastly in the last ten years. See below. It might even be /directly/ affecting the amount spent on music.
5: The Internet also provides competition for people's time and limited money.
6: Other minor factors in the loss of revenue seem to include unauthorized distribution of music, and the wide availability of "singles" via on-line stores that compete with traditional album sales.
1: There is a finite amount that people spend on Entertainment.
2: The Music Industry simply has a slice of the pie. It doesn't have a whole one to it's self.
Here's what seems to currently be happening to counter this problem:
1: The Music Industry (RIAA) view it as a problem in /only their/ part of the entertainment industry. They don't seem to be addressing the industry as a whole.
- In 1995, Guy Kawasaki gave a speech to a graduating class. I'm not going to repeat it, but see the link below. Specifically, see Number 8, about the Ice Cutters. A quick summary for the impatient is: If you don't embrace change, then it will happen without you. If that happens, you may find yourself quite lonely one day.
2: They think that if they can charge fees for items/services they didn't in the past, then they will make up for some of that lost revenue.
3: They seem to be distracting themselves by pursuing the symptoms of the illness, not the root cause. (Think: RIAA Lawsuits)
4: By pursuing the symptoms, they are diminishing the "good faith" value of their part of the industry, thus making their slice even smaller.
Ok, background's done.
Here's my thoughts:
If the Music Industry charges for things they haven't in the past, such as Boy Scout Campfire Songs, iTunes Previews, and Royalties on Fair Use items, they won't increase their share of the pie.
If they continue to pursue the "Bigger Stick" tactics they are using, they will continue to tarnish their reputation, and devalue their "brand."
People will probably not spend more money on Music as a whole now that there are different things competing for their dollars.
Additional cost/charges will make the final product more expensive to customers, therefore reducing both the value to them, and the amount they are able to purchase.
- Dan Schnur
(No, not that one.)
http://arstechnica.com/gaming/news/2008/01/growth-of-gaming-in-2007-far-outpaces-movies-music.ars - Older, but insightful.