According to BPI figures for 1992, nearly 49 000 people are employed in the British music industry, just under 10% of whom (roughly 4100) work in manufacturing and distribution [46]. Derived from the 1930s, distribution is an essential part of making music available to the public, and takes many forms, all of which stem from the record companies (see figure 13, below).

Traditional distribution channels before the advent of the Internet [47]

1. Record Manufacturers - The six major labels -
• Bertelsmann Music Group (BMG)
• EMI
• MCA (now owned by Geffen)
• PolyGram
• Sony Music
• Warner Music Group

control 85% of the pop music market, and as such, control the distribution of most of the music available today, guaranteeing the availability of music by the major recording artists.

1. Record Distributors - While the major labels distribute their own products, record distributors also exist as small independent companies who are paid by bands/labels to deliver their products to selected retail outlets. These include companies such as Pinnacle Entertainment , one of the largest independent distribution companies in the UK.
2. Retail Outlets – Active buyers are defined as those who have bought at least three albums in the past three months, and these consumers buy 45% of their music at retail outlets such as HMV, Our Price and Virgin Megastores.
3. Record Clubs – In 1997, as many as 17 million Americans belonged to record clubs, generating US$1.5 billion in sales revenue. According to recent research by Strategic Record Research, 3% of consumers buy their music exclusively from record clubs, another 14% buy from both record clubs and retail outlets [47]. Record clubs offer CD and cassette albums (some even still offer vinyl ) at reduced prices, bypassing distribution and retail costs by acquiring the products directly from record companies. In an attempt to curb lost revenue incurred by selling products at lower prices, many major labels have established their own record clubs, one of the most famous of which is Columbia House, run by Columbia Records.

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