Music Sales
nytimes.com
nytimes.com
I am not sure what I can conclude or deduce from this graph; when there is a small nagging glare of "Source: Recording Industry Association of America" down at the bottom, tracking my gaze.
Too bad the gravy train has ended for the RIAA - recouping losses by suing file-sharers is like a kid throwing a violent tantrum when their toy broke.
I think that's in millions (or billions) of dollars. Notice that there is also '1978: $8.1' next to LP/EP and '1988: $6.1' next to Cassette. I think they are trying to label the peak of sales (those black bordered sections) with the volume of revenue.
{edit} It says 'billions' at the top {/edit}
I doubt the former case is considered a 'single' in the traditional sense of the word in the music industry.
Once we develop a legitimate platform for unsigned musicians to use and compete with the major labels, their artists, and the money they make. Then we will begin to see some numbers that include unsigned artists. Because once they begin to make competitive noise, the labels and FCC will certainly try to begin to get involved and want to regulate as they always do. But as long as the independent artist stays technically "unsigned", there's nothing the regulators can do to control the music, or get a piece of the earnings.
Once we see this happen, those downloaded album and singles sales numbers rise dramatically. Force the RIAA to count you. Record and be heard.
The topmost performers in the indie market may achieve some success on their own, as individuals, but in aggregate the total indie market is a disaster.
Saying there's no "dark" market is like saying there are no desktop OSes bare Windows.
But, there is one or two, you know; and it bites.
The reason for low sales outside major labels, is the fact that there are no outlets for unsigned musicians that are worthwhile, and major labels regulate what you hear, and who is heavily promoted. And therefore, the competiton is not level. Unsigned musicians cannot afford expensive studio time to record, have little avenues to promote and sell, and therefore just cant compete. The indie market is a "disaster" as you put it, because major labels, the RIAA and FCC keep it that way on purpose. Who wants an area of business to succeed and compete, if they cannot get a piece of that revenue? No one.
Now how about Digg has done for news, and YouTube has done for music? Leveled the playing field, and taken some of the wind out of the sails of major media. And put more power in the hands of the consumer, and allow then to choose whats best in music. Not tell them what you want them to listen to.
Obviously the answer was MP3s, but I think they might have missed the boat there...
The problem was that it was too close to their current bubble at the time. These are the kind of things that large businesses try to artificially separate out so that they can maximize profit. Why bring in a new technology now when I can wait until later and make more money in the interim?
However, it is very interesting to not how Vinyl, Cassettes and CDs all dovetail into each other nicely. I would be willing to bet that the rise of mp3 downloads and the decline of CDs would dovetail equally as well.
The problem was, I think, the mp3 wasn't a media format invented by/for the music industry.
If I download music illegally, I can download GBs upon GBs of music which would cost me thousands of dollars were I to purchase it. What if I don't have those thousands of dollars? It's not like you can say that I would have bought all of those albums if it was impossible to pirate and then add the thousands of dollars to 'lost CD/Legal Download Service sales.'
However, I don't think there will ever be any trustworthy comparison like this, as the number of downloaded tracks was never reliably tracked in a manner that would be comparable to the RIAA unit sales data. Even if you could estimate the number of tracks downloaded, it would end up including things the RIAA doesn't include, like mashups, indy tracks, concert bootlegs, simpson quotes, etc.
I have a feeling that (other than the 'legal' vs 'illegal arguments) it would be very telling of the way that media consumption habits have trended over the past decade or so.
The late 90s was also the end of the pre-internet era, where the dominant way to market music was radio, TV, and print. In 1995 you had to try hard to discover music outside the mainstream. In 2005 you could go to MySpace and listen to an hour of music without ever hearing a top 40 song.
So, not only the labels were selling music by new artists at their usual pre-Internet levels, but there was also a big demand for old music in CD format. I suspect many older people that would not usually buy new music ended up buying many of their old albums again.
The record industry (as opposed to the music industry) was a 20th century anomaly. Prior to the invention of the gramophone, music was largely a participatory affair.. singing to pass the time while working, to celebrate at a social function, to amuse and entertain friends and family and to pass on folklore from generation to generation.
The record as a social object and the idolatry of the rock star were temporary aberations.
The live performance end of the music industry will likely survive, but once all the big stars of the last few decades die off, even that will likely shrink dramatically in size.
I don't think I like that it's in billions of current dollars, seems a little misleading since they didn't actually have $8.1 billion in LP/EP sales in 1978.
Finally, the difference between CD and other digital media versus LPs and cassettes is that they don't wear out. You only have to buy it once, and if a bunch of your friends borrow it its not a big hassle.
The labels still get the $6.50 more or less for a digital album (although that's falling) but they no longer have to worry about manufacturing a portion of their products (CDs are still 80% of the market.. digital is 20%) so at best they knocked off 20% of their manufacturing costs thus far.
So now for an equal numbers of units shipped the total cost is $1.76 per unit.
The labels also have to pay mechanical royalties to the artists.
So prior to the internet: $6.50 x 250,000 units minus royalties would net them around $700,000 gross profit.
But they would have paid $250,000 as an advance to the artists.
Net profit would be something like $450,000 on the initial $250,000 investment plus ongoing manufacturing and marketing costs.
If they hit it big, they get rich, but a dud might be a money loser or at best barely profitable.
The digital sales would boost their net profit by $110,000 for the same number of units sold, all else being equal. They would get a 2.24x return on their investment.
Keep in mind 250,000 units is now pretty good for a successful artist now.. the biggest album last year only sold 2.8 million copies.
Artists don't get the shaft anymore than any other business person does.
Labels are just VC.. they risk investing a small amount of money in a very large number of artists (a few hundred thousand) on a hunch that it might pay off. Most don't work out, but the ones that do make up for the rest.
80% of sales come from 50,000 albums pulled from the entire history of recorded music.. not very good odds.
The real problem is that nobody is buying music anymore. Period. Unit sales are dropping off a cliff.
In comparison there were just under a billion units sold in 1999 and the backstreet boys had the biggest album with over 16 million copies. Last year the top seller, Lil Wayne only sold 2.8 million. It took the b-boys just over a week for comparable sales at the peak of the market.
If I'm not mistaken, Norah Jones first album was the last to break the 10 million barrier.
Total units sold started dropping at an annual compounded rate of 6%/year in 1999 through 2004. With the introduction of iTunes in 2003, "album substitution" started to take hold and the decline accelerated. Albums were being replaced by single track downloads on iTunes at a rate of roughly 1.4 downloaded tracks per CD album. With an average of 12 tracks per cd.. that's an 88% drop in per unit sales (1.4 tracks are around $1 on iTunes vs. $16-$20 for the CD album).
The music industry is alive and well but the record industry has basically been obliterated.
I can sometimes listen to a single song without looking at the rest, but that account for something like 5% of my listen, the staple being albums, of course.
Look at the top charts for singles. Pick any artist in the top 10. Go somewhere you can preview the entire album and then ask yourself if you would buy it.
When I was a techno DJ I spent a lot of money on both vinyl and CDs in my preferred genre (I was happy to support tiny niche labels), but I bought all my mainstream music on used CDs - they usually played fine and it was a lot cheaper. I would never have done this when vinyl was king and have never bought a cassette, ever.
It's not. The graph does not adjust the dollar amounts for inflation. (Or if it does it doesn't say so).
So the tape sales were more than they look.
Sidenote: this is where the term 'B-side' came from. The A-side of the single had the song the music label wanted to promote, the B-side had some other song that most stations didn't play.