Music Distribution Comes Into Its Own and Shapes the Future of Live Events

From poor-quality AM radio to U.S. sales of $7.7 billion in 2016, music has come a long way in the last century thanks to streaming—which boosts the viability of concerts.

The problem with the first mass system for distribution of music, AM radio, was static. Lightning and electrical products could render station signals a disjointed mess of spine-tingling noise. However, AM radio was the beginning of a system to distribute and promote the music that was just breaking. Music distribution moved slowly at first, then exploded.

RCA Victor owned the radio, invented the record player and the 10-inch 78 RPM record that was made of wax, plastic and silicone. In 1954, the stereo 33 1/3 record was born. It produced less noise and had finer reproduction quality. In 1961, the FCC approved stereo broadcast for FM. The album created a story. FM played the album. To get the story, you needed to hear it all.

Eight-track | Photo courtesy Paul Townsend/Flickr

Cassette tapes

To increase portability, the cassette and eight-track were created. The cassette tape was also recordable.

Next, the CD revolutionized the music industry by introducing a quality recording platform that required little maintenance and played in machines at home, in the car and on the beach. The CD dominated record sales for more than two decades. This was the peak of profitability for record labels. But there was another revolution on the rise.

mp3 player

Around the turn of the century, the MP3 file emerged. MP3 is a coding format for digital audio that uses a form of lossy data compression that shrinks the data to reproduce a quality music recording with only a small percentage of the capacity. In 1999, Napster caught the record industry napping as it clung to huge profits the traditional CD was reaping. Napster created an avenue for consumers to get out of that, which was superior in almost every way. CDs cost $16; Napster was free. And so began the music-format revolution.

Steve Jobs saw Napster, MP3s and the internet differently. He believed fans would download and pay for songs they liked if the experience was easy, affordable and consistent, as opposed to traveling to a record store and paying $16. The magic of the MP3 was that the file shrunk so dramatically, you could store 5,000 songs on his new, three-inch by four-inch iPod. It shifted the business from expensive, high-revenue CDs to cheap, low-revenue singles.

In 2005, access to music would explode. First, with Pandora’s streaming service and then Spotify in 2008, which has a seemingly infinite catalog of music and 39 million paid subscribers. Using algorithms based on your habits, Spotify can create personalized playlists.

In 1975, it took me five hours and 150 albums to create a three-hour playlist on my Akai reel-to-reel. Today, its $10 a month, zero time to record and no cost to buy records, CDs or downloaded music. Better yet, Spotify and other streaming services are hooking up with ticketing companies to sell tickets. YouTube and Ticketmaster are partnering to notify fans watching videos.

Spotify

The continued development of music distribution will be a springboard to more artists being discovered, and fans purchasing concert tickets while they’re listening online. According to the Recording Industry Association of America, music sales in the United States generated $7.7 billion in 2016, up 11.4 percent from the year before. The increase is largely the result of streaming, which contributed $3.9 billion in 2016, up 69 percent from the year before. It now makes up 51 percent of the business—the first time it has had a majority of sales in the United States.

The diversity in presentation of live music in Las Vegas has spawned residencies, which have increased ticket sales by more than 30 percent. Springsteen is on Broadway. Following him is Dylan, Grateful Dead and Buffett. How long before they are playing Las Vegas theaters? And there is the new 17,000-seat Madison Square Garden Theater and Raiders Stadium.

In 1991, Las Vegas sold 200,000 tickets to live music events. In 2016, 3 million. 2020? Imagine the impact on Las Vegas, as a new generation of fans flock here to experience the best live music on the planet.

Pat Christenson is the president of Las Vegas Events and the author of the book Rock Vegas and the blog rockvegasnation.com, which chronicles the evolution of live music in Las Vegas.

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