Part 3/12:
Bato points to the late 1990s and early 2000s as a high-water mark for industry profits. 2000, in particular, marked perhaps the peak with approximately $2.45 billion in profits. Since then, profits have plummeted, with 2015 reporting roughly $240 million—a stark decline that affects every facet of the business from artists to engineers, producers, and labels.
The digital revolution, exemplified by Napster's 1999 rise, was a catalyst for this decline. While initially disruptive, the end result has been a fundamental shift in revenue streams away from physical record sales towards streaming and digital platforms, which generate significantly less income per unit.