The recording industry is in a continual state of flux. New technology, new music, new markets, and new ways of doing business are constantly redefining the way the industry functions. Computer technology is simplifying the recording and mixing process while opening new outlets for creativity and distribution of music. Musicians, producers, and engineers are finding opportunities in the creation of music for Web sites and other multimedia.

Changing trends in music always keep record companies on their toes as they try to stay one step ahead of their competitors by signing the musicians and bands with the newest sound. Though rock continues to be the top-selling genre, sales dropped for rock music in the last 10 years and are only now increasing slowly. By contrast, sales for rap and country music have doubled in the same time period. Women artists are continuing to be powerful forces in the music industry, and the opening of Chinese and Latin American markets has given record companies a big boost in sales. These markets have accounted for a large percent of the growth of music sales. Yet, problems with piracy in these countries need to be controlled to avoid significant profit losses.

Piracy issues also involve the Internet; the industry is concerned with digital copies of music being freely transferred over the Web, in violation of copyright laws. Internet technology has made it possible to download quality recordings quickly and easily, resulting in Web sites with whole archives of pirated recordings. According to the International Federation of the Phonographic Industry (IFPI), an estimated 40 billion music files were shared illegally in 2008 for a piracy rate of about 95 percent. These numbers have since dropped. Low-cost or free subscription and streaming services such as Spotify and Pandora have reduced the incentive for pirating. Yet even with the availability of such streaming services, the International Federation of Phonographic Industry reports many Internet users around the world still access sites that offer copyright-infringing music files. The research firm, MusicWatch, found that in the US alone 20 million people still get music through peer-to-peer file sharing networks. The Recording Industry Association of America (RIAA) reports that music piracy leads to the the loss off $2.7 billion in earnings annually in the sound recording industry and in downstream retail industries.

A report by the International Federation of the Phonographic Industry stated that global recorded music sales reached $19.1 billion in 2018. This represented the fourth consecutive year of global growth. The IFPI also reported that it was the highest rate of growth since the organization started tracking the market in 1997. Globally, digital revenues now make up more than 50 percent of sales, while physical sales make up 25 percent of the market.

In the United States, music industry revenue grew by 13 percent in 2019, to $11.1 billion, compared to $9.8 billion in revenue in 2018, according to an RIAA report. Declining sales of physical media and a decrease in digital music purchases have undermined rising digital sales driven primarily by subscription services. CD sales dropped 12 percent from 2018 to 2019. Paid subscriptions to streaming services, however, increased 25 percent from 2018 to 2019, accounting for $6.8 billion in revenues. Limited-tier subscriptions to services such as Pandora Plus and Amazon Prime accounted for $829 million of total streaming revenues. Digital download sales revenue dropped by 18 percent in 2019 compared to the previous year, down from $1.04 billion to $856 million. Overall, digital comprised more than 87 percent of revenues in 2019, physical made up a little over 10 percent of revenues, and synch royalties (in which the songwriter and recording artist are paid equally) accounted for about 3 percent.

In the last 15 years the music and recording industry has undergone dramatic consolidation. Three corporations—Universal Music Group, Warner Music Group, and Sony Music—control over 80 percent of the industry. While this consolidation may be beneficial for artists under contract with these companies, it has also made it more difficult for unknown acts to break into the business.

The coronavirus pandemic had a significant impact on the music industry in 2020. Business lockdowns and stay-at-home orders inspired many people to turn to streaming services. According to a report in The Wall Street Journal, there was a 9.2 percent increase in sales of recorded music in 2020 compared to 2019, and it marked the fifth year in a row of growth. Subscriptions to streaming services comprised 83 percent of total revenue for recorded music. Subscriptions to on-demand streaming services via Spotify, Apple, and others grew from 60.4 million in 2019 to 75.5 million in 2020, the largest increase in a single year. Revenue for streaming services, including music licenses for services such as Peloton, were up in 2020 by more than 13 percent compared to 2019, generating $10.1 billion in 2020. On the other hand, sales of physical music products were flat at $1.1 billion in 2020, although vinyl sales revenue was up by 29 percent (to $626 million) in 2020 compared to 2019. And digital downloads had fallen by 18 percent in 2020 compared to 2019.

As of early 2021, the U.S. music publishing industry consisted of 8,211 businesses with total employment of 13,183 people. The rollout of the COVID-19 vaccine in 2021 will boost the economy and music industry revenue is expected to have slow growth through 2026. As described by research group IBISWorld, physical album sales will continue to decline, whereas the losses will be offset by the increasing popularity of streaming services and "expanded synchronization opportunities to monetize operators' working capital, which is their catalogs."