The music industry consists of the individuals and organizations that earn money by writing songs and musical compositions, creating and selling recorded music and sheet music, presenting concerts, as well as the organizations that aid, train, represent and supply music creators. Among the many individuals and organizations that operate in the industry are: the songwriters and composers who write songs and musical compositions; the singers, musicians, conductors, and bandleaders who perform the music; the record labels, music publishers, recording studios, music producers, audio engineers, retail and digital music stores, and performance rights organizations who create and sell recorded music and sheet music; and the booking agents, promoters, music venues, road crew, and audio engineers who help organize and sell concerts.

The industry also includes a range of professionals who assist singers and musicians with their music careers. These include talent managers, artists and repertoire managers, business managers, entertainment lawyers; those who broadcast audio or video music content (satellite, Internet radio stations, broadcast radio and TV stations); music journalists and music critics; DJs; music educators and teachers; musical instrument manufacturers; as well as many others. In addition to the businesses and artists there are organizations that also play an important role, including musician's unions (e.g. American Federation of Musicians), not-for-profit performance-rights organizations (e.g. American Society of Composers, Authors and Publishers) and other associations (e.g. International Alliance for Women in Music, a non-profit organization that advocates for women composers and musicians).

The modern Western music industry emerged between the 1930s and 1950s, when records replaced sheet music as the most important product in the music business. In the commercial world, "the recording industry"—a reference to recording performances of songs and pieces and selling the recordings–began to be used as a loose synonym for "the music industry". In the 2000s, a majority of the music market is controlled by three major corporate labels: the French-owned Universal Music Group, the Japanese-owned Sony Music Entertainment, and the US-owned Warner Music Group. Labels outside of these three major labels are referred to as independent labels (or "indies"). The largest portion of the live music market for concerts and tours is controlled by Live Nation, the largest promoter and music venue owner. Live Nation is a former subsidiary of iHeartMedia Inc, which is the largest owner of radio stations in the United States.

In the first decades of the 2000s, the music industry underwent drastic changes with the advent of widespread digital distribution of music via the Internet (which includes both illegal file sharing of songs and legal music purchases in online music stores). A conspicuous indicator of these changes is total music sales: since 2000, sales of recorded music have dropped off substantially while live music has increased in importance. In 2011, the largest recorded music retailer in the world was now a digital, Internet-based platform operated by a computer company: Apple Inc.'s online iTunes Store. Since 2011, the music industry has seen consistent sales growth with streaming now generating more revenue per year than digital downloads. Spotify, Apple Music, and Amazon Music are the largest streaming services by subscriber count.