via the Times UK:

This is the graph the record industry doesn’t want you to see.

It shows the fate of the three main pillars of music industry revenue – recorded music, live music, and PRS revenues (royalties collected on behalf of artists when their music is played in public) over the last 5 years.

We’ve broken each category into two sub-categories so that, for any chunk of revenue – recorded music sales, for instance – you can see the percentage that goes to the artist, and the percentage that goes elsewhere. (In the case of recorded music, the lion’s share of revenue goes to the record label; in the case of live, the promoter takes a cut etc.)

Hopefully, this analysis – and there’s more on the nuts and bolts of our method below – sheds some factual light on the claims and counter-claims that are paranoically sweeping across the music industry establishment, not least that put forward by the singer Lily Allen in this paper recently – and the BPI – that artists are losing out as a result of the fall in sales of recorded of music.

The most immediate revelation, of course, is that at some point next year revenues from gigs payable to artists will for the first time overtake revenues accrued by labels from sales of recorded music.

Why live revenues have grown so stridently is beyond the scope of this article, but our data – compiled from a PRS for Music report and the BPI – make two things clear: one, that the growth in live revenue shows no signs of slowing and two, that live is by far and away the most lucrative section of industry revenue for artists themselves, because they retain such a big percentage of the money from ticket sales.

The long and short of it – the music industry’s “decline” isn’t as simple as record labels would like us to believe, and that musicians are getting a bigger slice of the music industry pie than they have in the past.

According to Billboard, the late 1960s were the peak of musical diversity in popular music, with 743 different songs appearing on the 1966 Billboard Top 100 chart. It’s fallen consistently since, hitting an all-time low in 2002 with only 295 songs.

Since 2002, it’s improved only slightly, with 351 unique songs appearing on last year’s Top 100.

Is it any wonder that people are listening to less radio, buying less music and, instead, turning to blogs and podcasts to find new music?

According to the Recording Industry Association of America, shipments of vinyl LPs jumped more than 36 percent from 2006 to 2007, growing to more than 1.3 million. Shipments of CDs dropped more than 17 percent during the same period, to 511 million, as they lost some ground to digital formats

Nearly 450 million CDs were sold last year, versus just under 1 million LPs, according to Nielsen SoundScan. Based on the first three months of this year, Nielsen says vinyl album sales could reach 1.6 million in 2008.

“I don’t think vinyl is for everyone; it’s for the die-hard music consumer,” said Jay Millar, director of marketing at United Record Pressing, a Nashville based company that is the nation’s largest record pressing plant.

An avid music fan himself, Millar says he has moved to vinyl in recent years.

“Once I got my first iPod … I’m looking at my wall of CDs and trying to justify it,” Millar said. “The things I like — the artwork, the liner notes, the sound quality — it dawns on me, those are things I like better on vinyl.” He welcomed back the pops and clicks, even some of the scratches.

“I like that fact that it’s imperfect in a lot of ways, live music is imperfect too,” Millar said.

Image: Tilton Lane