Introduction This research paper aims to analyze those factors that influence economic development of music in South Africa. First, it should be pointed out that music industry includes a great number of stakeholders, in particular: 1) the composers and musicians; 2) the agents, representing the musicians; 3) record companies; 4) advertisers, promoting the product; 5) sales outlets (DACST, 1998, p 9; Krasilovsky et al, 2007). Overall, one can single out several forces shape financial performance of music industry, namely, 1) the demand for the product and its popularity nationwide and abroad; 2) lack of investment; 3) the availability of the product; 4) governmental policies to piracy or any other violation of copyright; 4) cultural situation in the country. On the basis of this discussion, we will be able to map out growth strategies. The forces, affecting the economic performance of South African music industry The demand for the product The performance of any industry strongly depends on the demand for its product and in this case, we can speak about the demand for South African Music that can be viewed both as art and as a certain intellectual product. One of the main challenges, faced by the representatives of this industry is the low level of awareness about local composers and performers (DACST, 1998, p 74). The thing is a great number of people do not know that there are talented and skillful performers who can really produce a genuine breakthrough in quality. Consequently, record companies cannot effectively sell CDs or DVDs. However, the most disturbing trend is that many talented song-writers, composers, and musicians often withdraw from the industry and choose a different way of earning one’s way. When speaking about low demand for South African music, one should remember that local performers are sometimes underrepresented by radio stations. Some of South African performers even believe that they should be given broadcasting quotas (Meintjes 2003, p 3). This example shows that awareness and demand are closely connected with one another. More importantly, it indicates that poor financial performance of music industry can be explained not only by the ongoing economic crisis in the country. Certainly, over the last years, the revenues of South African people have declined, and unemployment rates are still very high (OECD, 2010, p 8). The purchasing power of people has weakened, but this is not the only reason why national music industry underperforms. The origins of low demand should probably be sought in the ineffective marketing strategies. To elaborate this argument, we need to say that the demand for any product is not an independent variable. It can be created by advertising the works of local musicians on television and Internet, by broadcasting their songs and musical pieces on the radio, by organizing festivals for them and so forth. Without this effort domestic musicians are not likely to succeed. Lack of investment and promotion One of the most difficult obstacles that South African musician have to overcome is lack of investment and inability to promote their songs (DACST, 1998). It should be borne in mind that in order to become successful, any artist must have financial resources to make a high-qua