The Difference Between the Music Industry & The Recording Industry

After publishing Why You Should Give Your Music Away for Free on Music Think Tank, I have been inundated with articles, comments, and other assorted replies decrying that the new digital music business models are killing the music industry. It got me thinking about a crucial distinction that is being overlooked, and the consequences of doing so are preventing many from seeing the opportunities that are abound. It boils down to one main concept.

The Music Industry is different than the Recording Industry, and these terms should not be used interchangeably. 

Allow me to explain.

The Music Industry is a huge, overarching behemoth that includes all kinds of different smaller industries. For example:

• Recording
• Licensing
• Touring & Live
• Merchandise
• Print & Web Design
• Publishing
• Marketing, Advertising & Public Relations
• Video Production
• Magazines & Newspapers
• Instrument Design & Manufacturing
• Music Hardware & Software

These are just the ones off the top of my head…I could go on if I kept thinking about it. The bottom line is that any business that is involved in music in any way can be considered part of the music industry. If you are a graphic designer who spends their time designing album art, or a bus driver who drives tour busses all over the country, then you are in the music industry.

The Record Industry is just one small subset of this larger “music industry.” Within the business world, it’s known as a vertical. The record industry is in the business of making money off the recordings of music. That is why the companies who participate are called “Record Labels.” They sell records, i.e. recordings. You may have heard of the RIAA, a political lobby whose mission it is to protect the major record labels. Notice that its called the RIAA – the Recording Industry Association of America. They are not called the Music Industry Association of America. That’s because they represent only a small subset of the industry as a whole.

It is critical to make the distinction between these two terms. Mind you, I am by no means the first person to bring this to light. But too many people are crying about the death of the music industry lately, and I wanted to remind everyone that the sky is not falling. The Music Industry as a whole is fine. There is a new wave of innovative business models that take into account the new economic realities of the industry. It is the Recording Industry that is in trouble, and without some serious innovation by the interested parties, it’s likely to get worse for them.