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6. European Market-share Evolution (2000-2006)

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This item is part of the series of posts based on the European Antitrust Agency 2007 Music Industry Analysis for the Sony BMG Case. It’s home page is here.

Evolution of demand for physical albums

  1. The recorded music industry enjoyed year-on-year growth from the mid-1980s until the late 1990s. Since 2001, the industry has been facing a drastic decline in sales: on the basis of the figures provided in the notification, the total market value in Europe declined by 2% from 2000 to 2001 and by 4% from 2001 to 2002. According to the notification, after 2002, the total market value continued to decline by 27% between 2002 and 2006.
  2. As main reasons for the market decline the notifying parties identify counterfeiting, unauthorized CD burning and downloading, and a loss of retail space for CDs.
  3. A falling market is generally considered to promote, in principle, competition between the undertakings in the sector concerned
  4. All majors cooperate in the framework of multi-artist compilations. These compilations can be developed by a unique record company, which will only include tracks of artists from its own labels, or they can be developed in cooperation between several record companies, being majors or independents.
  5. The combination of artists from different labels makes it possible to cover a broader range of the charts, or of the genre to which the compilation refers. To do so, the record companies can enter into Joint Venture agreements or acquire license rights to include tracks in their own compilations.
  6. The market for compilations is declining much faster than the overall record market. This decline is principally attributed to the development of the online market, where customers can create their own compilations. The share of compilations as a percentage of album sales in Europe has been declining over the same period.

This item is part of the series of posts based on the European Antitrust Agency 2007 Music Industry Analysis for the Sony BMG Case. It’s home page is here.

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