2. Too Much Music
The last 20 years produced remarkable changes in the way music is created and distributed.
The 1990s effectively democratized music production. In 1989 making a record or CD almost certainly meant paying thousands of dollars to go to a recording studio for a few hours and hoping you ended up with something good.
By 1999 however you could make a record at home on your computer. In some cases the quality of the recording wasn't quite as good (limited by your gear and expertise), but you could spend a lot more time on it. From the ADAT to PC-based recording, by now (2010), anyone can make a "record".
Even iPhones can make records via apps ranging from simple instruments (the ocarina) to 4-track recorders. (I am awaiting the inevitable gimmick indie record made "entirely on the iPhone").
Not surprisingly, people are making lots of records: About 300,000 per year with the number steadily climbing. The product of the major labels (EMI, Sony, Universal, and Warner) represent about 10-15% of that number, but the bulk of that represents repackaging of their back catalog, not new artists.
Keep in mind this is a cumulative thing - every new album isn't just competing for ear space with the new albums from that year - it's competing with everything ever recorded - Radiohead's "OK Computer" and Nirvana's "Nevermind" and Run-DMC's "King of Rock" and Led Zeppelin IV and The Beatles and Hank Williams and Enrico Caruso. Every year, every minute it gets harder to be heard over the din.
In economic terms, the supply of music is vastly increasing - a result of dramatic drops in the costs of creation and distribution combined with many more creators. It is not unrealistic to assume that demand would fall as a result. And when demand falls, prices fall. Creators get paid less, as does everyone else in the value chain, because listeners are willing to pay less.
But that's still not the whole story.
Next: Part 3: Now It's Everywhere
1. The Problem Nobody's Talking About
2. Too Much Music?
3. Now It's Everywhere
4. The Audience Isn't Listening
5. What The Internet Really Means