Devoted to show business and the entertainment industry

One of the misconception in the health of the music industry has been the attention on the difference between dropping CD   versus growing digital sales.

Most that follow the industry know that digital sales won't compensate for the loss of CD sales. With that being the majority of the focus, the industry has looked in much worse shape than it really is.

Paul Verna, eMarketer Senior Editor, said in the Global Music: Tuning into New Opportunities report that "eMarketer estimates that the worldwide market for recorded music, live music and music licensing will reach $67.6 billion by 2011, up from the 2006 total of $60.7 billion. Over that period the industry will grow at an average annual rate of 2.19%."

With digital sales not filling in the revenue loss from decreasing CD sales, then what will?

While digital and mobile sales are projected to grow to $14.8 billion by 2011, that is still only a small percentage of overall the $67.6 billion projected for the industry by 2011.

The growth will come in different combinations from the "live concert industry and the licensing of music for public performances, commercials, TV shows, films and video games," said the emarketer report.

One example of the live concert industry will show how it's going to happen. When you hear about all these older bands getting back together to put on concerts, it's not because they sell music CDS afterwards - they don't. The money is in the concert itself and possibly from selling their live performances on DVD. They sell very little in the way of CDs because of the concerts.

What else is really interesting to me is that the CD is becoming like movies in theaters. For the most part there isn't much if any money made from the theatrical releases, it's the DVD sales that account for the profits.

That's how many are starting to view the CD. It's becoming a loss leader that is more of a marketing tool than a moneymaker. It is now being thought of as something that pushes merchandise, concerts and a branding tool; an expense rather than a revenue generator.

In a certain way the demise of the CD as a moneymaker will eventually become a blessing to the industry as it adjusts and looks at numerous ways of creating revenue from their newly discovered CD marketing tool. It'll take time but in a few years we'll begin to see a robust music industry again, just not the same one that existed five years ago.