The paper is going to answer the next question: "The 21st Century has witnessed a decline in traditional forms of music retail. Why has this happened, and what are the consequences for record companies, artists and customers?"
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Music industry, as we know it, finds itself in deep crisis these days. Traditional forms of music retail show constant dip in sales every year; and this trend has started to unfold quite a long time ago. On the one hand, the noughties have witnessed a dramatic downfall in traditional market sales but, on the other hand, so-called digital music sales have been boosting market share for 15 years in row and there are no signs of any stark slowing down in this business segment. The digitization of music, technological development and booming e-commerce sector have opened a window of opportunities for some music industry players and issued the challenge of unprecedented structural crisis for the others. My goal in this paper is to identify the winners and losers of a drastic decline in traditional forms of music retail, analyze the reasons that stand behind such a decline, as well as its consequences, and find the roots of innovative ideas that have changed the face of music industry in the 21st century. I have organized the paper into three sections, two of which have sub-sections. In the first section I elaborate on the strategic prerequisites for growth and decline in the traditional forms of music retail by making a brief retrospective journey into the history of music industry. In this section I also discuss the scope of economical and structural crisis that the music industry started to suffer with the advent of new technologies and rapid development of the Internet.
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