| SIC Codes: | 2731 7389 |
| NAICS Codes: | 512240 512230 512220 512290 512210 |
Companies in this industry produce musical recordings, license rights to use musical compositions, and generate in-broadcast revenue. Major companies include Sony Music Entertainment, Universal Music Group, and Warner Music Group (all based in the US); Avex Group (Japan); edel (Germany); and GMM Grammy (Thailand).
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, referred to as indies, compete by focusing on artists within local markets or music genres. The industry is highly concentrated: the top 20 companies account for more than 80 percent of industry revenue.
Major products of the industry are musical recordings (about 54 percent of revenue), licensing of rights to use musical compositions (about 22 percent), and in-broadcast performance revenue (11 percent). Other products and services include the production of master recordings, the manufacture and packaging of physical CDs, and the production of databases to distribute downloads of recordings.
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