As the recording industry goes, so will follow every other industry in the transition from physical to digital.
The recording industry was the first media business to feel the transition from physical to digital formats in a big way.
Goldman Sachs went through data from the RIAA, a U.S. music industry group, to chart the rise and fall of various music formats over the last 42 years. (The left axis shows revenue in millions of dollars — so the peak in the the earlly 2000s was around $14 billion a year.)
The industry benefited when people replaced their physical analog recordings (LPs and cassettes) with digital CDs. But the rise of MP3 players and ever-faster internet connections soon made owning CDs obsolete. Piracy took off, and sales of online digital formats — first downloads, now streaming — haven’t made up the difference.
Print publications, books, movies, and television all face the same kind of disruption. The outcomes will depend on a lot of factors, including how well they defend their content from piracy, the speed with which they embrace what customers want, and the emergence of a single dominant company in any phase of the transition, as Apple dominated the early days of legal music downloads.