Australian Recording Industry

The Australian Recording Industry has experienced growth in the digital era, with streaming services contributing to its success. However, the industry faces challenges such as illegal downloading, diversification, and competition from the US. The market is represented by The Australian Recording Industry Association and comprises of music distributors, record labels, and artists. The industry generates revenue from physical and digital sales, synchronisation, and ancillary. The industry is expected to grow by 7.5% by 2020. The rise in the domestic demand of the recording industry is expected to enhance its reach and potential. The cost of operation has been aggravated by illegal downloading and internet services. The industry is a luxury good and has positive relation with the elasticity of income.

Running head: AUSTRALIAN RECORDING INDUSTRY
Australian Recording Industry
Name of the student
Name of the University
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Introduction:
The Australian Entertainment Industry Association is an organisation of employers
who all are connected to the entertainment industry. Digital recordings is always well
represented in Australia. During 200, the sales of albums were increasingly falling. On the
other hand the digital sales grew very fast. The demand pattern of the music industry have
been changing.
There had been few legislative changes faced by the recording industry. One of them is the
copyright enforcement. The second one is private copying where consumers are allowed to
make a copy of acquired recording. The major recoding industry includes Festival,
Universal, REA, CBS and EMI. The recording industry of Australia had achieved it fastest
growth in 2017 in the last twenty years. On the other hand physical music continued to
decrease in revenue. There had been a growth of 10.5% for the last ten years (Bernstein,
Weissman & Sekine, 2013). The achievement was basically largely due to the success of the
streaming services. The physical sales however continue to fall in the downward trend. The
music industry comprise of those industries that earn money by creating songs, recordings of
video and selling of the live concerts. The Australian Recording Industry Association which
comprises of distributors and record labels which are small through record companies. The
wholesale value of the recording industry fell down by ten percent. The key reason behind the
downfall of streaming is that digital downloads brings in more profit. The music market of
Australia has been the sixth largest in the world. The creative sector is usually quite small
compared to the industries around the world( Cunningham, 2010). It is estimated that the
music industry of Australia contributes around $4 to $ 6 billion to the Australian economy.
Contemporary music industry generated revenue around $2.5 billion annually. The music
industry of Australia had also generated jobs over a large scale. The small business of

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Australia comprises of one percent of Australian music and performing arts. This industry
also contributed to the employment growth.
Characteristics of the market:
The Australian Recording Industry is represented by a trade group called The
Australian Recording Industry Association formed in 1983 which then replaced Australian
record manufacturers. The trade group was formed by the six major record companies. The
recording industry of Australia. Australia had been the sixth largest music market in the
world in terms of revenue. The recording industry is run by number of different organizations
like The Australian independent Record Labels Association, The Australian Music Publishers
Association, Phonographic Performance Company of Australia and many more. The industry
has experienced the highest growth rate since 1996 and the value of the market in 2017 itself
was A$391 million( Fagerberg, 2013). The streaming service also earned a lot and the
revenue from the streaming service itself was A$213 million.
How the market operates:
The main sales statistics of the recording industry is done by the ARIA. Australian
recording industry faces huge competition from the United States of America. The recording
industry is made up of music distributors, record labels and artists. Different kinds of
workers work in the recording industry. The structure of the industry works in a quite
different way. At first after the music had been written, it is promoted and distributed. There
are different types of revenue earned by the recording industry. One of them is digital which
includes revenue earned downloads and streaming then comes physical which includes
revenue earned from selling CDs and cassettes. The primary source of revenue include
physical and digital. Synchronisation is the another channel of revenue where revenue is
generated from synchronisation of the music. When revenue is earned from endorsements

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and merchandise, it is called ancillary The main players of the recording industry are the
artists, distributors and the record labels. The work of the artists is to perform music. After
the artists finishes writing the music it is the job of the record labels for marketing and
producing the music. The famous record labels of the recording industry are Sony Music,
Warner music and the Universal Music. The music distributors then by making physical
copies like Cds produce and sell it to the general public.
Challenges:
Due to the digital change there had been a major disruption in the recording industry
of Australia and the sales declined to 11%. The major contributor to the Australia’s copyright
industry had always been music.The second challenge faced by the recording industry of
Australia is diversification. Due to digitalisation, Global financial crisis had increased the
diversification of the music industry. There had also been an increase in illegal downloading
which is also an issue faced by the recording industry. The illegal downloading of music is
quite common in Australia. Another kind of challenge is the music tax. Live music
performance by the artists are also on a rise which can also be considered as a challenge
faced by the recording industry. Another major challenge faced by this particular industry is
through usage of mobiles. Revenues are nowdays also collected from youtube. One of the
real challenge is to sell songs to the public. Therefore it is very critical for the performance
marketer to sell songs. Therefore marketing music and selling music related products online
are one of the key challenges. The recording industry usually needs microphones, CDs and
softwares to perform.
In case of streaming music pricing had always been an issue. The recording industry
is usually highly competitive all over the world. Most of the expenses goes into
advertisement, promotion and for publicity of the artists. The pricing of the CDs have been

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slashed down due to the innovation of the digital world. Computers are one of the necessities
in this industry as the recording studios are mostly digital. Most advanced computers are
therefore highly priced. One of the primary software used in the recording industry is the
Digital Audio Workstation which is used for editing and mixing music is priced anything
between $300 to $900. Microphones, headphones, mic, audio interface are some of the
instruments which are quite heavily priced.
Contributes to the assessment value:
As it can be seen from the above discussion, there is good amount of growth prospect
to the Australian Recording Industry and as per the future prospect of the same, it is expected
to grow by a large extent by the end of 2020 (Donoughue, 2018). In addition to this, under
the oligopoly market structure of the recording industry in Australia, it can be seen that the
firms utilize the predatory pricing policies that allow them to gain much amount of profit
from the wide market of the industry. As per the assessment, it can be seen that, with the rise
in the potentiality of the industry, it is expected that Australian recording industry is going to
enhance its reach and potential by a large extend by the next one decade, with the growth rate
of 7.5%. As of now, the organization is enhancing with the growth rate of 10% compared to
the growth rate of 2010 and if the growth rate of previous year is considered, then it can be
seen that the industry has grown by 54% showcasing the large amount of rise in the overall
revenue of the industry (Australiacouncil.gov.au., 2018). Digital world of Australia is
providing more service to the large audience, which is allowing the same to have greater
amount of operational value and as per the assessment it would see strong upward trend. As
per the rise in the domestic demand of the recording industry it can be expected that the
performance of the industry will remain good by the end of these decade and in the coming
years, it would face good amount of growth.

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Operation expenses:
As per the statistics it can be seen that the Australian recording industry has been
facing large amount of potential during the present day, however, the cost of the same has
also been aggravated by a large extent. Under the illegal downloading of the music and
videos, it can be seen that Australian recording industry has been facing issues with their
operational cost. More than 3.6 million utilize the online media sources to download and
avail the music from the illegal sources that makes it hard for the industry to control the
market expenses (Musicinaustralia.org.au., 2018). As per the US and Australia joint survey, it
has been observed that most of the population who showcase economic demand in front of
the Australian Recording Industry is aged between 25 years to 34 years and the same age
group download music illegally depicting the controversial situation of the Australian
recording industry. Moreover, rise in the illegal downloading is also enhancing the cost of
operation for the Australian Recording Industry, which is allowing the same to have good
amount of performance disorder with the rise in the internet services.
Elasticity in the market:
Elasticity is one of the factor that depends upon the relation between the supply and
demand with the price level (Dixon & Nassios, 2016). With higher relation, elasticity
becomes higher that allows a small change in one of the factors to showcase a large amount
of impact on the overall performance of the economy. As it can be seen from the Australian
Recording Industry, the good can be considered as the luxury good and it has positive relation
with the elasticity of income. With rise in the price, there would be rise in the demand of the
same; however, considering the different price level and the market structure of the
Australian Recording Industry, it can be seen that there is different magnitude of elasticity

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(Conlon & Perkins, 2018). Premium prices products showcase negative relation with the
income, whereas, standard or lower prices items will have positive elasticity.

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REFERENCE LIST
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