Why do the labels target the lowest income demographic instead of the highest?

The recorded music industry likes us to claim that P2P piracy has led to the decline of their business. However, the “shared wallet,” or the proportion of disposable income that people spend buying recorded music, began to decline in 1994, long before the Internet and the onslaught of file sharing. Even in 1994, this “Wallet Share” had yet to recover from the highs of the late ’70s, so it declined after the death of disco. And yes, the competing interests of the video, and now DVD and gaming sectors, can be pointed to as serious competitive constraints, especially gaming in terms of the younger demographic.

However, many Baby Boomers who replaced their old vinyl LPs with CDs have now started converting their CDs to MP3s for their iPods. But isn’t there something missing here? Why are these 35-55 year olds just replacing their old recordings? Why don’t you regularly buy music from new and upcoming artists? Could it be that they have been neglected in terms of their musical tastes?

Even as the music industry benefited from this older demographic replacing its old formats, and even as so-called “alternative” genres went mainstream and became a mass market, the industry didn’t release artists specifically aimed at fans. of music raised in the 60s and 70s. To a demographic that was always increasing their disposable income. Because?

Well, first of all, it was clear in the 1990s that the younger demographic was constantly migrating away from buying recorded music. In 1988, most music purchased was by people under the age of 25, however 10 years later, in 1998, most music purchases were by people over the age of 30. So why is the music industry still so obsessed with young consumers who have low disposable income? I would say that perhaps today’s dominant sounds and music genres are poor substitutes for the interests of a growing and aging audience.

THE GRAYING OF THE MUSIC AUDIENCE, 1989-2000

Source: Recording Industry Association of America; SRI Business Intelligence Consulting

As the chart above shows, young teens didn’t wait for companies like Napster or Kaza to lose interest in buying recorded music. Instead, the statistics describe the fact that, in recent years, the music-buying audience has consistently been in the 45+ age group. Taking a closer look at the above figures, the median age for buying music was 23, and by the year 2000 it was closer to 32.

But for a median age to increase by 9 years over an 11-year period, only one conclusion can validly be argued: that the same people who bought the most records 10 years earlier were still buying the most 10 years later. Looking at different industries, the newspaper industry experienced a similar trend.

I recognize that manufactured pop acts aimed primarily at tweens are important to the recorded music business in generating profit, so they can invest in new talent. Why focus so obsessively on this demographic though? And by doing so neglecting the demographic with the biggest increase in purchasing power? No argument can provide a satisfactory answer. Today, as an industry, we find ourselves in a situation where the 40+ segment of the market represents the majority of the overall market for 30+ recorded music.

This spectacular growth of people over the age of 45 demonstrates that profitability will increasingly depend on ever-growing audiences over the next decade. The chart above also reinforces the fact that this trend began long before mass markets for MP3 players, CD drives, or ISPs developed. On a positive note, I’ll say it’s encouraging to hear artists like Adele and Duffy do so well on the charts if it’s the older demographic that buys music from their favorite supermarket chain. Does this mean that the industry is finally getting more familiar and realigning the targeting of music to an older demographic? Certainly one would hope so!

But despite these “supermarket acts,” most new releases today are still aimed at the youth and 14-24 market segments whose tastes developed in the hip hop era. However, an older audience is buying more recorded music that clearly prefers the artists of the 1960s and 1970s (The Beatles, Led Zeppelin and Elton John, etc.) to those of the alternative rock and hip-hop generation. “With innovations like the iPod and Internet music sites, teenagers used to rule music sales. Now it’s their parents who keep the music industry in business.”

The fact is, whether it’s the Rolling Stones, Led Zeppelin, or the masses of back catalog record companies; the recorded music business depends on catalog artists for profitability.

Why then is the publication so important? Going back five years, I looked at one of the major record companies’ annual reports for the previous four-year period as a global group. This had to include all areas of his business and therefore included music publishing. What struck me was that while publishing on this particular major label represented only 22% of the group’s global turnover, it also represented more than 54% of that same company’s profits. I am sure that the situation would be similar in other races.

So why do I think this is a concern now? Well, globally, the major labels have failed to build significant artists with the longevity of many artists who evolved from the ’60s and ’70s. In the late ’80s (and to this day) there has been a focus constant in high marketing cost manufactured artists, with a limited lifespan, to make a “quick buck” over long lifespan artists (generally referred to as catalog artists).

So where will the catalog artists of the future come from to fuel the company’s profits? If labels continue to obsess over marketing to tweens and teens, at the expense of marketing to the highest disposable income demographic, will there be strong new catalog artists in the future that cater to this older age group?

Obviously, the music industry needs to market and sell music to tweens and young teens, as they are the music consumers of the future. However, it’s critical that the industry continues to release artists that are relevant to its target demographic as that same consumer ages. There are so many times that you can buy reissues of the same recordings. The 45+ age group is currently the top music buying demographic and will continue to grow. So which label will be the first to release a new artist who is over 50?