Music, RIP

The music industry is dead. Long live music!

New technology has always profoundly altered music. First it was the violin, an alternative to the violoncello that could “sing.” Then it was the pianoforte, a keyboard instrument that allowed Beethoven to pound out notes that even he could hear.

Then records, radio, MP3s and downloads. After every change, gloom-sters proclaimed in gravelly voices the end of music. Lately, the business has had trouble: since the 2001 deal with Napster file sharing sites have multiplied like rabbits on steroids and sales and downloads have fallen by some 40%.

But in spite of this royalty payments have been rising, even during the recession. The industry isn’t dying, but it is changing profoundly. Live music has been making a comeback. Ticket prices have more than tripled in real terms over the past 10 years, even as concert tours have multiplied. And what fans don’t spend on $170 tickets to Simon and Garfunkel is often plunked down for a t-shirt or baseball cap.

Music’s nostalgic pull has also drawn in corporate sponsors, from soft-drinks to mortgage companies. It’s no surprise that Miley Cyrus signed a Hannah Montana deal with Wal-Mart. But music’s biggest fan is the television. For background and also shows like “Glee” and “Dancing with the Stars” which are music shows in their own right.

The music industry isn’t so much dying as coming home. For centuries the way to artistic success was to perform in front of a live audience. The 20th century’s brief music-publishing experiment is over, destroyed by the digital copy. Some things can’t be downloaded. It’s back to business as usual.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By |2017-07-17T12:35:18-04:00October 14th, 2010|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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