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Saturday, June 12, 2010
Tuesday, June 1, 2010
World-wide Cd Sales Are Worst in SoundScan History, and the Record Labels Only Have Themselves to Blame
This is the End for the Record Industry as We Know It: Good Riddance!
In 1949, a man by the name of Ahmet Ertegun, who was in charge of signing talent to Atlantic recordings, heard a song on a jukebox in a dive bar somewhere in New York City, called "Baby, let me hold your hand". Ertegun flipped out at the sound of the man singing this incredible song, barely believing what his ears were hearing: the sound of one of the greatest soul singers in an extremely early recording of a song that nobody believed in except for Ahmet Ertegun. The name of the singer from that formidable song was Ray Charles, and Ertegun had to sign Charles to a five-year contract and lost countless hundreds of thousands of dollars and incur the wrath of his co-owners of Atlantic Records at the time, because the record never took off. He stuck by his man, though, and a few years later, after much blood sweat and tears from the constant and relentless work ethic of Ertegun to push Charles' sales, Ray Charles went on to sell millions of future records for Atlantic, making the record label into a very profitable venture for all the owners, including Ahmet Ertegun. That same scenario will never happen again.
Since the huge success of Michael Jackson's "Thriller" album, the record industry has always been looking for that next big quick "hit". "Thriller" went on to become the biggest selling album of all time, with over 45 million records sold worldwide, but that success could not be duplicated during the following years, much to the chagrin of the record industry. The industry became almost like a junkie looking for it's next heroin fix, a billion dollar monster always needing to fill it's massive coffers with more money so it could go on and spend more on publicity for acts like "Milli Vanilli" and other non-musical commercial acts. The record industry became the giant money-hungry greedy industry that it's been known for ever since. All of the major record labels, including Atlantic records, took the new corporate mentality of having a musical act they signed either being a huge hit-maker from day one, or dropping them off their label like a hot potato. No longer would a label nurture an artist like Columbia Records and A&R man John Hammond, in particular, did for a young Bruce Springsteen, who had to build his career slowly by putting out albums like "Greetings from Asbury Park" and "The Wild, the Innocent and the E-Street Shuffle" which had dismal record sales in 1972 and 1973. It would take almost ten years to get the huge hit that was "Born in the USA" on top of the charts, and Columbia was willing to sweat it out until that happened.
But today Bruce Springsteen, and classic rock bands like the "Eagles", would have to sell an initial 500,000 copies or more of their debut cd's, or they would get dropped from their contracts without due notice. That is the major tragedy with the record business today. That is the main reason why you constantly see the same record producers get involved in making newer artists like Fergie and Gwen Stefani sound virtually identical to each other. If Timbaland does a great job producing mega hits for Fergie, then it stands to reason he will do the same for Stefani or Christina Aguilera, in essence giving them the exact same sound that he did for Fergie. Put the traditional radio outlets in the mix, who play the same songs ad infinitum 24 hours a day, and you get the most repetitious and blandest songs coming out of the record industry in it's 100 year history.
The record industry is now trying to blame the internet for all it's woes because of all the illegal downloads going on today. That may be a major part of the problem, but the industry is trying to make it seem like that's ALL the problem, which is an outright lie. Here are some very frightening sales statistics: Total January Album sales in 1997: 55 million. That number drops to 50 million in 2002, and plunges to 34 million total sales for January 2007. A drop of 20 million less sales for this year from just ten years ago can only mean another drop of at least 10 million for January 2008, if this downward slide continues.
Those sales drops represent the lowest sales in Soundscan history and the future looks ominous for even more record industry layoffs. EMI Records already merged Virgin Records with Capitol, retaining the Capitol name and leaving the Virgin organization to find work with Capitol Records, or having to find employment elsewhere. Chairman and CEO of EMI, Alain Levy and vice chairman David Munns were fired earlier this year for the 4.9 percent cd sales drop between January '06 and January '07. Look for more layoffs to occur at rival record companies like Warner and Sony records in the very near future because of such alarming sales drops such as the whopping 67 percent drop in overall album sales since 1997.
"The music industry is in free-fall", states Adam Shore, head of Vice Records, which is, ironically enough, distributed through the once-great record label, Atlantic Records. "We're having an existential crisis. We're less sure than ever that people are going to buy our records". Such is the state of an industry on the verge of economic collapse, and a great example of what happens when an industry feeds on itself to bring on it's own self-destruction.
Source
In 1949, a man by the name of Ahmet Ertegun, who was in charge of signing talent to Atlantic recordings, heard a song on a jukebox in a dive bar somewhere in New York City, called "Baby, let me hold your hand". Ertegun flipped out at the sound of the man singing this incredible song, barely believing what his ears were hearing: the sound of one of the greatest soul singers in an extremely early recording of a song that nobody believed in except for Ahmet Ertegun. The name of the singer from that formidable song was Ray Charles, and Ertegun had to sign Charles to a five-year contract and lost countless hundreds of thousands of dollars and incur the wrath of his co-owners of Atlantic Records at the time, because the record never took off. He stuck by his man, though, and a few years later, after much blood sweat and tears from the constant and relentless work ethic of Ertegun to push Charles' sales, Ray Charles went on to sell millions of future records for Atlantic, making the record label into a very profitable venture for all the owners, including Ahmet Ertegun. That same scenario will never happen again.
Since the huge success of Michael Jackson's "Thriller" album, the record industry has always been looking for that next big quick "hit". "Thriller" went on to become the biggest selling album of all time, with over 45 million records sold worldwide, but that success could not be duplicated during the following years, much to the chagrin of the record industry. The industry became almost like a junkie looking for it's next heroin fix, a billion dollar monster always needing to fill it's massive coffers with more money so it could go on and spend more on publicity for acts like "Milli Vanilli" and other non-musical commercial acts. The record industry became the giant money-hungry greedy industry that it's been known for ever since. All of the major record labels, including Atlantic records, took the new corporate mentality of having a musical act they signed either being a huge hit-maker from day one, or dropping them off their label like a hot potato. No longer would a label nurture an artist like Columbia Records and A&R man John Hammond, in particular, did for a young Bruce Springsteen, who had to build his career slowly by putting out albums like "Greetings from Asbury Park" and "The Wild, the Innocent and the E-Street Shuffle" which had dismal record sales in 1972 and 1973. It would take almost ten years to get the huge hit that was "Born in the USA" on top of the charts, and Columbia was willing to sweat it out until that happened.
But today Bruce Springsteen, and classic rock bands like the "Eagles", would have to sell an initial 500,000 copies or more of their debut cd's, or they would get dropped from their contracts without due notice. That is the major tragedy with the record business today. That is the main reason why you constantly see the same record producers get involved in making newer artists like Fergie and Gwen Stefani sound virtually identical to each other. If Timbaland does a great job producing mega hits for Fergie, then it stands to reason he will do the same for Stefani or Christina Aguilera, in essence giving them the exact same sound that he did for Fergie. Put the traditional radio outlets in the mix, who play the same songs ad infinitum 24 hours a day, and you get the most repetitious and blandest songs coming out of the record industry in it's 100 year history.
The record industry is now trying to blame the internet for all it's woes because of all the illegal downloads going on today. That may be a major part of the problem, but the industry is trying to make it seem like that's ALL the problem, which is an outright lie. Here are some very frightening sales statistics: Total January Album sales in 1997: 55 million. That number drops to 50 million in 2002, and plunges to 34 million total sales for January 2007. A drop of 20 million less sales for this year from just ten years ago can only mean another drop of at least 10 million for January 2008, if this downward slide continues.
Those sales drops represent the lowest sales in Soundscan history and the future looks ominous for even more record industry layoffs. EMI Records already merged Virgin Records with Capitol, retaining the Capitol name and leaving the Virgin organization to find work with Capitol Records, or having to find employment elsewhere. Chairman and CEO of EMI, Alain Levy and vice chairman David Munns were fired earlier this year for the 4.9 percent cd sales drop between January '06 and January '07. Look for more layoffs to occur at rival record companies like Warner and Sony records in the very near future because of such alarming sales drops such as the whopping 67 percent drop in overall album sales since 1997.
"The music industry is in free-fall", states Adam Shore, head of Vice Records, which is, ironically enough, distributed through the once-great record label, Atlantic Records. "We're having an existential crisis. We're less sure than ever that people are going to buy our records". Such is the state of an industry on the verge of economic collapse, and a great example of what happens when an industry feeds on itself to bring on it's own self-destruction.
Source
The Trend of New Record Deals and How They Are Signed
The music industry has undergone many changes throughout the decades. From live recordings in radio stations to being able to produce an entire record at home with programs such as Audacity and Pro Tools, the music industry is in a constant state of transformation. The transformation could be linked to political change, economic status, or social rebellion but the major change may be credited to the technological advancements. File-sharing programs have significantly reduced the sales of records and labels are seeking new innovative ways to restore that loss of income. Live performance is a source of income that record labels do not traditionally retain financial gain. An artist can gross anywhere from $300,000 to several million in one sold-out show, not including the sales in merchandise. A new deal known as "The 360 Deal" is starting to emerge in the industry. This deal includes but is not limited to record sales, live performance, and merchandising. Artists such as Korn and Madonna have recently embarked on this upcoming trend while Radiohead embraced a highly differential experiment on selling their new records.
Korn, who was formally signed to Epic, broke a deal with EMI record label for a two-album/ two-tour deal with $25 million up front, which could be easily recoupable from the touring alone. EMI's investment earned the company 30% of Korn's overall business, which includes record sales, touring, merchandise, publishing, and licensing during the 10-year duration of the contract (Titus). Jonathan Davis, a band member of Korn stated, "We're partners in this business so when the label promotes us, we win and they win because we're getting 70% and we're receiving stuff that's never been received before unlike shady label we've worked with before where we had to clean up their mistakes (Titus)." With this new deal, the band also released digital and audio bundles at their own set price of $1.98 to iTunes because the band retained the digital rights. Critics claimed that this new deal could have hindered the record label's projected revenues, since Korn's record sales had declined since the 90's according to Nielson SoundScan. Korn still had strong and loyal fan base and great tour successes, therefore, by retaining earnings from touring, the live performance compensated for the possible decline in record sales. The short-term effects of the new deal for Korn and EMI seemed to be profitable. Both parties received percentages regardless of the outcomes, therefore, by the short-term effects being positive, then future endeavors could transpire such as EMI getting the same deal at a greater percentage for upcoming artists and Korn resigning with EMI in order to have more control over their career.
Source
Korn, who was formally signed to Epic, broke a deal with EMI record label for a two-album/ two-tour deal with $25 million up front, which could be easily recoupable from the touring alone. EMI's investment earned the company 30% of Korn's overall business, which includes record sales, touring, merchandise, publishing, and licensing during the 10-year duration of the contract (Titus). Jonathan Davis, a band member of Korn stated, "We're partners in this business so when the label promotes us, we win and they win because we're getting 70% and we're receiving stuff that's never been received before unlike shady label we've worked with before where we had to clean up their mistakes (Titus)." With this new deal, the band also released digital and audio bundles at their own set price of $1.98 to iTunes because the band retained the digital rights. Critics claimed that this new deal could have hindered the record label's projected revenues, since Korn's record sales had declined since the 90's according to Nielson SoundScan. Korn still had strong and loyal fan base and great tour successes, therefore, by retaining earnings from touring, the live performance compensated for the possible decline in record sales. The short-term effects of the new deal for Korn and EMI seemed to be profitable. Both parties received percentages regardless of the outcomes, therefore, by the short-term effects being positive, then future endeavors could transpire such as EMI getting the same deal at a greater percentage for upcoming artists and Korn resigning with EMI in order to have more control over their career.
Source
Friday, May 28, 2010
LimeWire scrambles to avoid annihilation
The company that operates the LimeWire file-sharing software continues to maneuver in an effort to save the company from a potential court-ordered closure but time is slipping away.
LimeWire founder Mark Gorton could be liable for millions in damages following a court ruling earlier this month.
(Credit: Screen shot by Greg Sandoval/CNET) Two weeks ago, U.S. District Judge Kimba Wood handed a major legal victory to the Recording Industry Association of America (RIAA), which filed a copyright lawsuit against the LimeWire company in 2006. She ruled that Lime Group, parent of LimeWire software maker Lime Wire, and founder Mark Gorton are liable for copyright infringement. Lime Group and Gorton could be required to pay hundreds of millions in damages and legal experts say the music industry now has the means to force the service to cease operations.
On Wednesday, attorneys for Lime Group filed a motion with the court asking Wood to reconsider her decision, according to court documents obtained by The Hollywood Reporter. Lime Group lawyers wrote that the judge made numerous errors in her decision, such as finding that Gorton received a direct financial benefit from the copyright infringement. She also "failed to consider whether Lime Group had the ability to supervise the particular Lime Wire actions," the lawyers claimed in their filing.
For years, the LimeWire software has been the preferred way to share unauthorized music files on the Web. Users account for 58 percent of the people who said they downloaded music from a peer-to-peer service last year, according to survey results from research firm NPD Group.
Lime Group's request for the change to reverse her decision is standard operating procedure for companies in this kind of pickle. It's the legal equivalent of football's "Hail Mary" pass. But instead of the judge changing her mind, what is more likely to happen is the RIAA will ask Wood for an injunction during a hearing scheduled for June 7, and LimeWire will be ordered to shut down. Legal experts have said that Lime Group's chances of avoiding this fate are at best slim.
In addition to Lime Group's 12th-hour court filing, the New York-based company has also reached out to some of the four major labels in an effort to negotiate a compromise, according to multiple music industry sources. Gorton is offering to license music from the big record companies and turn LimeWire into a legal service, the sources said. But this too is a long shot.
LimeWire's decision to set the site's filter to off "was a conscious design choice, the direct result of which was a failure to mitigate infringement."
--U.S. District Judge Kimba Wood
Lime Group has generated a lot of bad blood with music executives after years of refusing to make even a minimum effort to compensate artists or protect against piracy, sources in the industry said. LimeWire pocketed $20 million in revenue during some years while giving back little or nothing to music creators.
A Lime Group representative said in a statement Thursday evening: "We will continue to maintain an open dialogue with the rights holders and push forward with our objective of working in concert with the music industry."
Recording companies have entered into "dialogue" with Gorton and his staff in the past but these efforts have produced nothing, music industry sources said. On multiple occasions, Gorton and Lime Group have signaled they were ready to filter for pirated music files and send warning notices to people sharing unauthorized files on behalf of the music industry, a process known as "notice and take down." Few if any of these changes ever were made, industry insiders said. "They've had years to come to the table," said one music industry executive. "Nobody believes them anymore."
Even some of the staunchest defenders of technology companies suggest that by profiting off of file sharing without implementing any antipiracy systems, Gorton and Lime Group were inviting disaster.
Jonathan Zittrain, a professor at Harvard Law School and co-founder of the Berkman Center for Internet and Society, said Wood's decision served as a warning to services that profit from illegal file sharing.
"If you're coming real close to flying the Jolly Roger as a business, you can expect to be in legal trouble," Zittrain told The New York Times.
In the two weeks since Wood made her ruling against the Lime Group, Gorton and LimeWire managers have argued their case in the media. In multiple interviews, company leaders have sounded astonished to find themselves in this situation and appear to have just recently discovered filtering and take-down letters.
"One way to address what the court is talking about, short of shutting down the network, which I think is overreaching and drastic, is to filter the network of these files in question," Zeeshan Zaidi, Lime Wire's chief operating officer, told Wired.com. "This is a way for us to move forward in the case."
Yet, there's plenty of evidence to show that for years Lime Group chose to ignore such copyright protections. First, filtering is the term used to describe when companies employ software to automatically recognize and remove unauthorized material from a site. Video-sharing site YouTube, which has a copyright lawsuit filed by Viacom hanging over its head, launched a filtering system years ago. It's worth noting that weeding out pirated content doesn't appear to have hurt YouTube much. Google CEO Eric Schmidt has said the ad-supported video site could turn a profit this year.
In the case of Lime Group, the company has long had the ability to filter but chose not to implement it in any meaningful way, Wood said in her decision for summary judgment. She wrote:
"In May 2006, Lime Wire implemented an optional, hash-based content filter. A hash-based filter can identify a digital file that contains copyrighted content, and block a user from downloading the file. The 'default' setting of LimeWire's hash-based filter was 'off.'
"[LimeWire managers] could have made the hash-based content filter mandatory for all LimeWire users, or made 'on' the default setting, so that a user's file-sharing activities would be subject to the filtering process unless he affirmatively deactivated the filter. According to [the company's] expert Steven Gribble, (the company) chose to set the filter to 'off' because it wished to provide users with 'enough flexibility to enable, disable, or configure filtering.' [The managers'] decision was a conscious 'design choice,' the direct result of which was a failure to mitigate infringement."
So, if Gorton and his staff sound wide-eyed and naive about filtering, some record company executives say they are only undermining their credibility as well as their attempts to convince the music industry that they would make good partners in a legitimate enterprise.
Source
LimeWire founder Mark Gorton could be liable for millions in damages following a court ruling earlier this month.
(Credit: Screen shot by Greg Sandoval/CNET) Two weeks ago, U.S. District Judge Kimba Wood handed a major legal victory to the Recording Industry Association of America (RIAA), which filed a copyright lawsuit against the LimeWire company in 2006. She ruled that Lime Group, parent of LimeWire software maker Lime Wire, and founder Mark Gorton are liable for copyright infringement. Lime Group and Gorton could be required to pay hundreds of millions in damages and legal experts say the music industry now has the means to force the service to cease operations.
On Wednesday, attorneys for Lime Group filed a motion with the court asking Wood to reconsider her decision, according to court documents obtained by The Hollywood Reporter. Lime Group lawyers wrote that the judge made numerous errors in her decision, such as finding that Gorton received a direct financial benefit from the copyright infringement. She also "failed to consider whether Lime Group had the ability to supervise the particular Lime Wire actions," the lawyers claimed in their filing.
For years, the LimeWire software has been the preferred way to share unauthorized music files on the Web. Users account for 58 percent of the people who said they downloaded music from a peer-to-peer service last year, according to survey results from research firm NPD Group.
Lime Group's request for the change to reverse her decision is standard operating procedure for companies in this kind of pickle. It's the legal equivalent of football's "Hail Mary" pass. But instead of the judge changing her mind, what is more likely to happen is the RIAA will ask Wood for an injunction during a hearing scheduled for June 7, and LimeWire will be ordered to shut down. Legal experts have said that Lime Group's chances of avoiding this fate are at best slim.
In addition to Lime Group's 12th-hour court filing, the New York-based company has also reached out to some of the four major labels in an effort to negotiate a compromise, according to multiple music industry sources. Gorton is offering to license music from the big record companies and turn LimeWire into a legal service, the sources said. But this too is a long shot.
LimeWire's decision to set the site's filter to off "was a conscious design choice, the direct result of which was a failure to mitigate infringement."
--U.S. District Judge Kimba Wood
Lime Group has generated a lot of bad blood with music executives after years of refusing to make even a minimum effort to compensate artists or protect against piracy, sources in the industry said. LimeWire pocketed $20 million in revenue during some years while giving back little or nothing to music creators.
A Lime Group representative said in a statement Thursday evening: "We will continue to maintain an open dialogue with the rights holders and push forward with our objective of working in concert with the music industry."
Recording companies have entered into "dialogue" with Gorton and his staff in the past but these efforts have produced nothing, music industry sources said. On multiple occasions, Gorton and Lime Group have signaled they were ready to filter for pirated music files and send warning notices to people sharing unauthorized files on behalf of the music industry, a process known as "notice and take down." Few if any of these changes ever were made, industry insiders said. "They've had years to come to the table," said one music industry executive. "Nobody believes them anymore."
Even some of the staunchest defenders of technology companies suggest that by profiting off of file sharing without implementing any antipiracy systems, Gorton and Lime Group were inviting disaster.
Jonathan Zittrain, a professor at Harvard Law School and co-founder of the Berkman Center for Internet and Society, said Wood's decision served as a warning to services that profit from illegal file sharing.
"If you're coming real close to flying the Jolly Roger as a business, you can expect to be in legal trouble," Zittrain told The New York Times.
In the two weeks since Wood made her ruling against the Lime Group, Gorton and LimeWire managers have argued their case in the media. In multiple interviews, company leaders have sounded astonished to find themselves in this situation and appear to have just recently discovered filtering and take-down letters.
"One way to address what the court is talking about, short of shutting down the network, which I think is overreaching and drastic, is to filter the network of these files in question," Zeeshan Zaidi, Lime Wire's chief operating officer, told Wired.com. "This is a way for us to move forward in the case."
Yet, there's plenty of evidence to show that for years Lime Group chose to ignore such copyright protections. First, filtering is the term used to describe when companies employ software to automatically recognize and remove unauthorized material from a site. Video-sharing site YouTube, which has a copyright lawsuit filed by Viacom hanging over its head, launched a filtering system years ago. It's worth noting that weeding out pirated content doesn't appear to have hurt YouTube much. Google CEO Eric Schmidt has said the ad-supported video site could turn a profit this year.
In the case of Lime Group, the company has long had the ability to filter but chose not to implement it in any meaningful way, Wood said in her decision for summary judgment. She wrote:
"In May 2006, Lime Wire implemented an optional, hash-based content filter. A hash-based filter can identify a digital file that contains copyrighted content, and block a user from downloading the file. The 'default' setting of LimeWire's hash-based filter was 'off.'
"[LimeWire managers] could have made the hash-based content filter mandatory for all LimeWire users, or made 'on' the default setting, so that a user's file-sharing activities would be subject to the filtering process unless he affirmatively deactivated the filter. According to [the company's] expert Steven Gribble, (the company) chose to set the filter to 'off' because it wished to provide users with 'enough flexibility to enable, disable, or configure filtering.' [The managers'] decision was a conscious 'design choice,' the direct result of which was a failure to mitigate infringement."
So, if Gorton and his staff sound wide-eyed and naive about filtering, some record company executives say they are only undermining their credibility as well as their attempts to convince the music industry that they would make good partners in a legitimate enterprise.
Source
Thursday, May 27, 2010
iTunes dominating music sales, Android a threat
Apple iTunes has increased its lead in the U.S. music distribution market, but an interesting battle from the yet-to-be-launched Google Android Music store is expected.
iTunes first became the top music seller in 2008, and has worked to extend its lead since then. The service ended 2009 with more than 26.7% marketshare, a 5.3% increase from the 2008 sales tally.
In February of this year, iTunes reached 10 billion music downloads, with that number is only expected to increase in the years to come. iTunes offers a large catalog of music, TV episodes and movies — and Apple continues to add new content.
Wal-Mart remains in the No. 2 position with 12.5 percent marketshare, and Best Buy is slotted in at the No. 3 position. Brick and mortar retailers are limiting floor space for CDs — as digital downloads increase and CD sales decline — with Wal-Mart, Best Buy, and other retailers also facing similar problems.
Retailers expect the continued transition to digital music to carry on in the immediate future, which has Best Buy and other stores unsure how to handle the change.
Online retailer Amazon also has had trouble selling music CDs, with its current share of the music market calculated at 7.07 percent. Its digital music service has increased in marketshare, however, as customers become more familiar with Amazon’s digital offering.
The music industry still isn’t sure how to deal with online music — the International Federation of the Phonographic Industry (IFPI) said more than one year ago that 95% of digital music is pirated. A few months later, the European Union said the music industry has to be more willing to open up online music.
At the Google I/O developers conference last week, Google’s engineering VP Vic Gundotra announced that the company will be releasing software to allow customers to stream music from their desktop to their Android phones. This software comes from Simplify Media, which Google purchased 2 months ago. Also announced was the Android Market Music section, which will allow customers to purchase music straight from their Android phones. Release dates, pricing or other details on the Android music offerings have not yet been disclosed.
The Google Android Music store won’t have an immediate impact on the music industry, but it’s definitely capable of shaking up the market, especially as the number of Android smartphone users continues to grow.
SOURCE
iTunes first became the top music seller in 2008, and has worked to extend its lead since then. The service ended 2009 with more than 26.7% marketshare, a 5.3% increase from the 2008 sales tally.
In February of this year, iTunes reached 10 billion music downloads, with that number is only expected to increase in the years to come. iTunes offers a large catalog of music, TV episodes and movies — and Apple continues to add new content.
Wal-Mart remains in the No. 2 position with 12.5 percent marketshare, and Best Buy is slotted in at the No. 3 position. Brick and mortar retailers are limiting floor space for CDs — as digital downloads increase and CD sales decline — with Wal-Mart, Best Buy, and other retailers also facing similar problems.
Retailers expect the continued transition to digital music to carry on in the immediate future, which has Best Buy and other stores unsure how to handle the change.
Online retailer Amazon also has had trouble selling music CDs, with its current share of the music market calculated at 7.07 percent. Its digital music service has increased in marketshare, however, as customers become more familiar with Amazon’s digital offering.
The music industry still isn’t sure how to deal with online music — the International Federation of the Phonographic Industry (IFPI) said more than one year ago that 95% of digital music is pirated. A few months later, the European Union said the music industry has to be more willing to open up online music.
At the Google I/O developers conference last week, Google’s engineering VP Vic Gundotra announced that the company will be releasing software to allow customers to stream music from their desktop to their Android phones. This software comes from Simplify Media, which Google purchased 2 months ago. Also announced was the Android Market Music section, which will allow customers to purchase music straight from their Android phones. Release dates, pricing or other details on the Android music offerings have not yet been disclosed.
The Google Android Music store won’t have an immediate impact on the music industry, but it’s definitely capable of shaking up the market, especially as the number of Android smartphone users continues to grow.
SOURCE
Tuesday, April 13, 2010
Modern Music Marketing Basics
Music is entertainment, and people want to be entertained. The great artists know this and create persona and brands that transcend everyday life. To a large degree, it is all make believe. If you want to be successful as a artist, you have to entertain people and make them feel you and want to associate with your brand. The trick is to create art (music) and a persona that reflects you and what you are all about.
Why Should Anyone Care about You?
Ask yourself the following questions until you find the answers. To create your brand, take a hard look at what you are good at and what you stand for. What is the overall mission behind your music? What are you trying to say? What is your message? Why should anyone care? What do you want them to remember?
All the best bands, all the best music, are manufactured, thought up, packaged, and brought to market. What is your vision? How do you see yourself, how do you want to project yourself onto your audience, and what are your ultimate goals?
You want to create a musical “character” that people can relate to. They don’t have to like you or want to be like you, they just need to be able to understand what you are about. Think of your favorite artists and what their character is like. Prince, Kid Rock, Jay-Z, Sting, Usher, Marilyn Manson, Norah Jones - all have personas that they bring to market in different ways. It is pretty easy to see what they are all about and this is achieved by careful packaging.
Present a Genuine and Unique Story
It is very important that your character and your story be genuine. That does not mean that you shouldn’t make something up, or project an image that is much bigger than life, but there has to be some substance behind it and something that is a reflection of you and what you are all about. You will have to live with the brand that you create, so make it something that you are comfortable with. What do you believe in, what is important to you, where is the well from which you are going to pull your material?
It is also important to be unique. If you are “just like” another band then it is going to be hard to differentiate yourself and stick in people’s minds. How can you be different? This is especially important when entering the marketplace. There is so much music out there, and so much noise to cut through, that you have to give people something to grab onto and really notice if you are going to have any chance of breaking through. Something different is the key.
Find a Need and Align Yourself
Many artists/writers sing and write about issues that they believe in and create songs that can create a difference in someone’s life. This does not have to be your entire career or the focus of your brand, but creating music that reflects societal issues and challenges can help you find and build an audience. Music has a long history of driving social change. What do you care about?
By thinking through these issues and trying to wrestle a brand definition in your mind, it will help you with all the rest of the marketing and promotion that you have to do. You will know where you are coming from, what your message is, and how to present yourself. It will guide the creative work of designing your packaging, web site, videos, messaging, and publicity campaigns, and give you direction and substance.
Develop Direct Relationships With Your Fans
One of the greatest advances in music marketing and promotion is your ability to go directly to your fans and engage with them in information exchange and commerce. For the most part, the major record labels of the past thought that their customers were WalMart and Tower Records. Even the big direct music operations like Columbia House and BMG Direct did nothing to connect artists and fans. Now, all that has changed, and you, as an artist/writer or business person, can go directly to your fans and engage them primarily through the Internet, PCs, and mobile devices.
By developing direct online relationships with your fans, you can make and keep more money, and begin to amass a wealth of data on their buying habits, preferences, shared interests, and behavior. This data can be extremely valuable to you as you expand your fan base and grow your musician business.
There are many ways to leverage direct-to-fan marketing, and the advantages are powerful:
Use widgets and social media to market your music all over and leverage your fans as distributors
Use email, twitter and text messaging to directly market your music to fans.
Leverage the power of the web to create links to your music everywhere.
Have ownership of the fan relationship and develop it over time. Drive people to your web site.
Gather and build the data required to build lifetime fan value and drive your musician business.
Integrate your marketing across social media with widgets, email, and SMS.
Provide instant gratification to your fans and a connection between you and them.
There are many companies available to help you address the direct-to-fan opportunities, and you can choose among them to meet your needs including Topspin, Nimbit, Bandzoogle, Artistdata, Mozes and lots of others. You may find that one company has everything that you are looking for, or that you are better off picking and choosing certain features and capabilities from different vendors to build your own direct marketing machine. There has never been a better time to take control of your career and drive it forward.
Source
Why Should Anyone Care about You?
Ask yourself the following questions until you find the answers. To create your brand, take a hard look at what you are good at and what you stand for. What is the overall mission behind your music? What are you trying to say? What is your message? Why should anyone care? What do you want them to remember?
All the best bands, all the best music, are manufactured, thought up, packaged, and brought to market. What is your vision? How do you see yourself, how do you want to project yourself onto your audience, and what are your ultimate goals?
You want to create a musical “character” that people can relate to. They don’t have to like you or want to be like you, they just need to be able to understand what you are about. Think of your favorite artists and what their character is like. Prince, Kid Rock, Jay-Z, Sting, Usher, Marilyn Manson, Norah Jones - all have personas that they bring to market in different ways. It is pretty easy to see what they are all about and this is achieved by careful packaging.
Present a Genuine and Unique Story
It is very important that your character and your story be genuine. That does not mean that you shouldn’t make something up, or project an image that is much bigger than life, but there has to be some substance behind it and something that is a reflection of you and what you are all about. You will have to live with the brand that you create, so make it something that you are comfortable with. What do you believe in, what is important to you, where is the well from which you are going to pull your material?
It is also important to be unique. If you are “just like” another band then it is going to be hard to differentiate yourself and stick in people’s minds. How can you be different? This is especially important when entering the marketplace. There is so much music out there, and so much noise to cut through, that you have to give people something to grab onto and really notice if you are going to have any chance of breaking through. Something different is the key.
Find a Need and Align Yourself
Many artists/writers sing and write about issues that they believe in and create songs that can create a difference in someone’s life. This does not have to be your entire career or the focus of your brand, but creating music that reflects societal issues and challenges can help you find and build an audience. Music has a long history of driving social change. What do you care about?
By thinking through these issues and trying to wrestle a brand definition in your mind, it will help you with all the rest of the marketing and promotion that you have to do. You will know where you are coming from, what your message is, and how to present yourself. It will guide the creative work of designing your packaging, web site, videos, messaging, and publicity campaigns, and give you direction and substance.
Develop Direct Relationships With Your Fans
One of the greatest advances in music marketing and promotion is your ability to go directly to your fans and engage with them in information exchange and commerce. For the most part, the major record labels of the past thought that their customers were WalMart and Tower Records. Even the big direct music operations like Columbia House and BMG Direct did nothing to connect artists and fans. Now, all that has changed, and you, as an artist/writer or business person, can go directly to your fans and engage them primarily through the Internet, PCs, and mobile devices.
By developing direct online relationships with your fans, you can make and keep more money, and begin to amass a wealth of data on their buying habits, preferences, shared interests, and behavior. This data can be extremely valuable to you as you expand your fan base and grow your musician business.
There are many ways to leverage direct-to-fan marketing, and the advantages are powerful:
Use widgets and social media to market your music all over and leverage your fans as distributors
Use email, twitter and text messaging to directly market your music to fans.
Leverage the power of the web to create links to your music everywhere.
Have ownership of the fan relationship and develop it over time. Drive people to your web site.
Gather and build the data required to build lifetime fan value and drive your musician business.
Integrate your marketing across social media with widgets, email, and SMS.
Provide instant gratification to your fans and a connection between you and them.
There are many companies available to help you address the direct-to-fan opportunities, and you can choose among them to meet your needs including Topspin, Nimbit, Bandzoogle, Artistdata, Mozes and lots of others. You may find that one company has everything that you are looking for, or that you are better off picking and choosing certain features and capabilities from different vendors to build your own direct marketing machine. There has never been a better time to take control of your career and drive it forward.
Source
Monday, April 12, 2010
RIAA spent $1.38 million lobbying Congress in 4Q
The Recording Industry Association of America, the lobbying arm of the major recording companies, spent $1.38 million lobbying the U.S. government in the fourth quarter of 2009.
The amount is less than the $1.62 million it spent in the same quarter of 2008 and the $1.44 million it spent in the third quarter of 2009, according to a filing the RIAA made Jan. 29.
Among other issues, the organization has been lobbying strongly in favor of the Performance Rights Act, which would make terrestrial radio stations pay a royalty to performers and recording companies.
Previously, they only had to pay songwriters and publishers for playing their songs on air. If the bill becomes law, it could create a pool of hundreds of millions of dollars in new revenue.
From October through December, the RIAA only lobbied in Congress, according to the report submitted to the House clerk's office.
Source
The amount is less than the $1.62 million it spent in the same quarter of 2008 and the $1.44 million it spent in the third quarter of 2009, according to a filing the RIAA made Jan. 29.
Among other issues, the organization has been lobbying strongly in favor of the Performance Rights Act, which would make terrestrial radio stations pay a royalty to performers and recording companies.
Previously, they only had to pay songwriters and publishers for playing their songs on air. If the bill becomes law, it could create a pool of hundreds of millions of dollars in new revenue.
From October through December, the RIAA only lobbied in Congress, according to the report submitted to the House clerk's office.
Source
Obama administration endorses performance royalties
The Commerce Department sent a "views" letter Thursday to the Senate Judiciary Committee that expressed the administration's "strong support" for the record labels' No. 1 priority: legislation (S 379 in the Senate, HR 848 in the House) that would require radio stations to pay royalties to recording artists. It's not a huge surprise, yet it's still a win for the Recording Industry Assn. of America and performers in their pitched battle with the National Assn. of Broadcasters. (Download the letter here)
At issue is whether sound recordings should carry the same performance rights as musical compositions. Today, sound recordings have performance rights online and on satellite radio, enabling labels and recording artists to collect royalties from webcasters and Sirius XM. But those rights do not extend to over-the-air broadcasts, so local radio stations pay royalties only to songwriters. Opponents of the legislation call it a tax that could crush many stations. They also contend that the promotion artists receive from stations that play their music is compensation enough.
In Thursday's letter, the Commerce Department's general counsel, Cameron F. Kerry, noted that the department had urged lawmakers several times since the 1970s to create a public-performance right for sound recordings. Such a right would be "a matter of fundamental fairness," Kerry wrote, and would bring the U.S. into compliance with the rest of the world. Because radio stations here don't pay performance royalties to foreign artists, foreign stations withhold royalties they would otherwise be paying U.S. artists. In addition, Kerry wrote, extending the performance right for sound recordings "would provide a level playing field for all broadcasters to compete in the current environment of rapid technological change, including the Internet, satellite and terrestrial broadcasters."
The NAB responded, as usual, by blasting the RIAA. Said Executive Vice President Dennis Wharton:
We're disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations. The good news is that 260 members of the House of Representatives and 27 U.S. Senators are standing with hometown radio stations and against the RIAA.
Last year the judiciary committees in the House and Senate approved HR 848 and S 379, respectively, but neither bill has advanced further. They both enjoy bipartisan backing, which is unusual for this Congress. But then, the opponents are bipartisan as well. Stay tuned.
Source
At issue is whether sound recordings should carry the same performance rights as musical compositions. Today, sound recordings have performance rights online and on satellite radio, enabling labels and recording artists to collect royalties from webcasters and Sirius XM. But those rights do not extend to over-the-air broadcasts, so local radio stations pay royalties only to songwriters. Opponents of the legislation call it a tax that could crush many stations. They also contend that the promotion artists receive from stations that play their music is compensation enough.
In Thursday's letter, the Commerce Department's general counsel, Cameron F. Kerry, noted that the department had urged lawmakers several times since the 1970s to create a public-performance right for sound recordings. Such a right would be "a matter of fundamental fairness," Kerry wrote, and would bring the U.S. into compliance with the rest of the world. Because radio stations here don't pay performance royalties to foreign artists, foreign stations withhold royalties they would otherwise be paying U.S. artists. In addition, Kerry wrote, extending the performance right for sound recordings "would provide a level playing field for all broadcasters to compete in the current environment of rapid technological change, including the Internet, satellite and terrestrial broadcasters."
The NAB responded, as usual, by blasting the RIAA. Said Executive Vice President Dennis Wharton:
We're disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations. The good news is that 260 members of the House of Representatives and 27 U.S. Senators are standing with hometown radio stations and against the RIAA.
Last year the judiciary committees in the House and Senate approved HR 848 and S 379, respectively, but neither bill has advanced further. They both enjoy bipartisan backing, which is unusual for this Congress. But then, the opponents are bipartisan as well. Stay tuned.
Source
Pandora's success means more bucks for artists
For years, Pandora and other Web radio stations fought to reduce the royalty rates they were required to pay artists and record labels.
Last July, the music industry and Webcasters reached an agreement and it now appears both sides are reaping the benefits. On Friday, SoundExchange, the group appointed by Congress to collect royalties on behalf of artists and copyright owners, said it has begun distributing $51.7 million, the largest quarter the nonprofit group has ever recorded.
The amount represents a 135 percent increase over the same period last year and is nearly $10 million larger than the previous largest quarter. In addition to Web radio stations, SoundExchange collected the money from satellite radio and cable TV music channels.
The negotiated agreement on digital royalty rates called for large ad-supported radio services, such as Pandora, to either share 25 percent of revenue with the music industry, or pay a per-stream rate of 0.08 cent retroactive to 2006, whichever is greater. The terms called for a number of rate increases until topping out in 2015 at 0.14 cent.
Sure, SoundExchange stuffed its piggybank, but the settlement also appears to have worked out for Pandora. The Web's top radio station said in January that the private company posted its first quarterly profit last year. The number of Pandora's subscribers has reached 48 million.
Westergren told Digital Music News last month that Pandora accounts for 44 percent of SoundEchange's non-interactive streaming hours. Non-interactive streams describe when a service chooses the songs that are heard--similar to traditional radio. Interactive streams are when users are enabled to choose the songs. Westergren said Pandora and SoundExchange's success is largely due to the fact that a settlement was reached.
"It is not that absent a settlement there wasn't an established fee structure in place (by the Copyright Royalty Board)," Westergren wrote in an e-mail. "It's more that absent a settlement no one would have survived to pay it."
Prior to last summer, Westergren had warned many times that without pricing concessions from the music industry, Pandora and others would have been forced to close their doors.
Should traditional radio pay, too?
Maybe traditional radio stations and the music industry can learn something from that deal.
Over-the-air broadcasters pay publishing rights but don't pay royalties to artists or copyright owners. That's a significant competitive advantage over Pandora and other Webcasters. The Recording Industry Association of America (RIAA) is backing legislation in Congress called the Performance Rights Act, that would require traditional broadcasters to pony up.
"(SoundExchange's record quarter) is great news for the music community and a sign of the importance of these platforms to the future of music," said Mitch Bainwol, chairman and CEO of the Recording Industry Association of America. "It also highlights the lack of parity in the marketplace. Why should one form of radio appropriately compensate artists and labels, but not the other? That's exactly why the Obama administration said recently that there should be a performance rights for AM and FM radio."
Last month, the Obama administration said it would offer "strong support" for the music industry's efforts in requiring traditional broadcasters to pay royalty rates similar to those collected from online stations.
Dennis Wharton, a spokesman for the National Association of Broadcasters, said the RIAA wasn't interested in parity or fairness. He said the group that represents the four largest recording companies wants money.
"All of those other platforms combined, if you added up their listener base, would pale in comparison to the 239 million listeners of free local radio every week," Wharton said. "The bottom line is that this is a money grab by foreign-run record labels whose business model was destroyed by the Internet and they are looking to bite the radio hand that has nurtured both the artists and labels for the last 80 years."
Source
Last July, the music industry and Webcasters reached an agreement and it now appears both sides are reaping the benefits. On Friday, SoundExchange, the group appointed by Congress to collect royalties on behalf of artists and copyright owners, said it has begun distributing $51.7 million, the largest quarter the nonprofit group has ever recorded.
The amount represents a 135 percent increase over the same period last year and is nearly $10 million larger than the previous largest quarter. In addition to Web radio stations, SoundExchange collected the money from satellite radio and cable TV music channels.
The negotiated agreement on digital royalty rates called for large ad-supported radio services, such as Pandora, to either share 25 percent of revenue with the music industry, or pay a per-stream rate of 0.08 cent retroactive to 2006, whichever is greater. The terms called for a number of rate increases until topping out in 2015 at 0.14 cent.
Sure, SoundExchange stuffed its piggybank, but the settlement also appears to have worked out for Pandora. The Web's top radio station said in January that the private company posted its first quarterly profit last year. The number of Pandora's subscribers has reached 48 million.
Westergren told Digital Music News last month that Pandora accounts for 44 percent of SoundEchange's non-interactive streaming hours. Non-interactive streams describe when a service chooses the songs that are heard--similar to traditional radio. Interactive streams are when users are enabled to choose the songs. Westergren said Pandora and SoundExchange's success is largely due to the fact that a settlement was reached.
"It is not that absent a settlement there wasn't an established fee structure in place (by the Copyright Royalty Board)," Westergren wrote in an e-mail. "It's more that absent a settlement no one would have survived to pay it."
Prior to last summer, Westergren had warned many times that without pricing concessions from the music industry, Pandora and others would have been forced to close their doors.
Should traditional radio pay, too?
Maybe traditional radio stations and the music industry can learn something from that deal.
Over-the-air broadcasters pay publishing rights but don't pay royalties to artists or copyright owners. That's a significant competitive advantage over Pandora and other Webcasters. The Recording Industry Association of America (RIAA) is backing legislation in Congress called the Performance Rights Act, that would require traditional broadcasters to pony up.
"(SoundExchange's record quarter) is great news for the music community and a sign of the importance of these platforms to the future of music," said Mitch Bainwol, chairman and CEO of the Recording Industry Association of America. "It also highlights the lack of parity in the marketplace. Why should one form of radio appropriately compensate artists and labels, but not the other? That's exactly why the Obama administration said recently that there should be a performance rights for AM and FM radio."
Last month, the Obama administration said it would offer "strong support" for the music industry's efforts in requiring traditional broadcasters to pay royalty rates similar to those collected from online stations.
Dennis Wharton, a spokesman for the National Association of Broadcasters, said the RIAA wasn't interested in parity or fairness. He said the group that represents the four largest recording companies wants money.
"All of those other platforms combined, if you added up their listener base, would pale in comparison to the 239 million listeners of free local radio every week," Wharton said. "The bottom line is that this is a money grab by foreign-run record labels whose business model was destroyed by the Internet and they are looking to bite the radio hand that has nurtured both the artists and labels for the last 80 years."
Source
How a generation of file-sharers is ruining the future of entertainment
It’s official: 2009 was the worst year for the record labels in a decade. So was 2008, and before that 2007 and 2006. In fact, industry revenues have been declining for the past 10 years. Digital sales are growing, but not as fast as traditional sales are falling.
Maybe that’s because illegal downloads are so easy. People have been pirating intellectual property for centuries, but it used to be a time-consuming way to generate markedly inferior copies. These days, high-quality copies are effortless. According to the Pew Internet project, people use file-sharing software more often than they do iTunes and other legal shops.
I’d like to believe, as many of my friends seem to, that this practice won’t do much harm. But even as I’ve heard over the past decade that things weren’t that bad, that the music industry was moving to a new, better business model, each year’s numbers have been worse. Maybe it’s time to admit that we may never find a way to reconcile consumers who want free entertainment with creators who want to get paid.
Reflecting on this problem, the computational neuroscientist Anders Sandberg recently noted that although we have strong instinctive feelings about ownership, intellectual property doesn’t always fit into that framework. The harm done by individual acts of piracy is too small and too abstract. “The nature of intellectual property,” he wrote, “makes it hard to maintain the social and empathic constraints that keep us from taking each other’s things.”
In other words, we kept to our rules about IP as long as it was attached to a physical object: a book, a CD, a videotape. Now that it consists of endlessly replicable electrons, we are ethically unmoored. Younger generations expect music and now video to be free—and when it isn’t, they feel entitled to take it anyway. College students see no problem with downloading music without paying for it—an attitude even more prevalent among younger students. Pew’s surveys indicate that 75 percent of respondents aged 12 to 17 agree that “file-sharing is so easy to do, it’s unrealistic to expect people not to do it.” They are Generation Free, and they just might kill the goose that lays the golden egg.
Optimists argue that the music industry has coped before with disruptive new technology. Until recordings came along, songs, not singers, were Big Business. So while copyright law allocated royalties for performances, it said nothing about what happened when you recorded those performances and sold thousands of copies of the recording. Only after protracted legal maneuvering did we work out an arrangement that allowed both businesses to thrive.
Can we do it again? Can the market evolve fast enough to keep up with the expectations, and predations, of Generation Free? Even if the music industry manages, what about all the other businesses that depend on intellectual property—including (gulp) my own?
In 2007, Radiohead famously allowed their extremely loyal fan base to download their new album, In Rainbows, on a pay-what-you-like scheme. Sixty-two percent of those who did so liked to pay nothing. The rest paid an average of just $6 apiece. And more fans downloaded the album from file-sharing services than from the band’s Web site.
Pish-tosh, say the optimists; Radiohead made money, didn’t they? The optimists offer alternative explications for the sorry state of the recording business: it’s a cyclical downturn, plus all the music from the big labels just happens to suck right now, and anyway MP3s are becoming loss leaders for concerts.
True, collectors switching from cassette and vinyl to CD swelled the music industry’s coffers in the 1980s and ’90s, so the eventual softening of sales is hardly surprising. The concert industry is indeed booming despite the downturn. And people who admit to downloading music illegally may actually spend more money on recorded music than people who don’t. One assumes they plump up concert revenues as well.
Yet even if die-hard music buffs spend more on albums than the guy who buys one box set a year, they’re still buying less than they used to. Moreover, spending less on recorded music doesn’t necessarily mean you spend more on shows; the savings could just as easily go toward beer. And even avid music lovers in urban areas can see only a few shows a week. To raise revenue, you have to get new customers in the door or raise ticket prices.
Concert-promotion mogul Michael Rapino has said that just 2 percent of Americans attend more than a couple of concerts a year, which leaves plenty of room to increase attendance, but also suggests that most people don’t particularly care for live music. It’s far from clear that free MP3s increase the number of concertgoers, instead of just changing the mix of shows they attend.
Higher ticket prices are already a fact—but not necessarily for the ordinary bands that grind their way through small and medium-size venues. In 1990, when I first started going to see live music, you paid $5 for a new act, $10 for solid performers, and $15 to $20 for hot favorites. Adjusted for inflation, that’s about what I still pay.
Tickets to major shows can cost hundreds. But that doesn’t promise much for the future of music. Here are the top 10 touring acts of 2009, according to Pollstar: U2, Bruce Springsteen, Elton John and Billy Joel, Britney Spears, AC/DC, Kenny Chesney, the Jonas Brothers, the Dave Matthews Band, Fleetwood Mac, and Metallica. For most of the demographic that attends these shows, sex, drugs, and rock and roll now means putting on a Beatles album and popping some Viagra—or asking Mom for permission to see an R-rated movie. All that these blockbuster concert revenues really tell us is that Baby Boomers have credit cards and their children have access to them.
To be sure, today’s 20-something file-sharer may someday pay $200 to watch Vampire Weekend rock the Astrodome. Or maybe not; the Internet tends to fragment audiences. Generation X, of which I am a member, was probably the last to grow up with the Top 40 and only a few TV stations—and the kind of common taste that this structure instilled. The bounty of the World Wide Web encourages niche interests. If you look at the Recording Industry Association of America’s top albums, only two of the acts who debuted this decade have sold 10 million albums, and one of them was Norah Jones, who has deep fogy appeal.
This fragmentation has been good news for performers like Jonathan Coulton, who makes a decent living selling quirky songs and related merchandise on his Web site. But the broader music industry, like other entertainment fields, has always worked on a tournament model: a lot of starving artists hoping to be among the few who make it big. What happens to the supply of willing musicians when the prize is an endless slog through medium-size concerts at $25 a head?
Moreover, whatever the sins of the big labels, they invest heavily in finding, promoting, and recording new music. Thom Yorke, Radiohead’s lead singer, has said that their experiment wouldn’t have worked as well as it did if they hadn’t already been through “the whole mill” of the old system. People tend to underestimate the extent to which the old industry supports things like … concert attendance.
These problems will even more deeply afflict the other industries that depend on IP. A smaller, more amateur music business is possible, if not optimal. But I doubt that YouTube can substitute for Hollywood in a world where “cheap” indie films can cost millions. Children’s films might be made at a loss to sell action figures—but how do you finance The Godfather? With a co-branded line of frozen cannoli?
As for the publishing industry, a year is a long stretch to spend typing without some prospect of financial return. Time was when authors could make money from sidelines such as public speaking; Mark Twain pulled himself out of bankruptcy by going on the lecture circuit. But Twain wasn’t competing with home-theater systems. Some journalists manage to make big money from corporate speaking fees, but that’s not an option for novelists or poets.
We have yet to figure out how to make IP work in the new era. Even if we don’t, people will still make pictures, sing songs, and write stories—just not as frequently, or as lavishly. But even if we do, file-sharing will probably alter the form of the works we do create. The popular arts may come to look more like the rest of the Internet: many labors of love produced quickly and cheaply in spare moments, and a few high-end productions that can be monetized.
Forms are already changing. The movie industry is moving into 3-D, which is harder to reproduce at home. Studios are also relying more on blockbuster movies that maximize the theater experience—and the revenues they earn from toys and comic books.
When the printing press was invented, many monks mourned the decline of vellum and the loss of the illuminator’s art. They were right, of course—but they were even more wrong. Maybe something better is coming, even as the transition racks the nerves of writers and artists. As the old joke goes, we may be losing something on every unit—but perhaps we’ll make it up in volume.
Source
Maybe that’s because illegal downloads are so easy. People have been pirating intellectual property for centuries, but it used to be a time-consuming way to generate markedly inferior copies. These days, high-quality copies are effortless. According to the Pew Internet project, people use file-sharing software more often than they do iTunes and other legal shops.
I’d like to believe, as many of my friends seem to, that this practice won’t do much harm. But even as I’ve heard over the past decade that things weren’t that bad, that the music industry was moving to a new, better business model, each year’s numbers have been worse. Maybe it’s time to admit that we may never find a way to reconcile consumers who want free entertainment with creators who want to get paid.
Reflecting on this problem, the computational neuroscientist Anders Sandberg recently noted that although we have strong instinctive feelings about ownership, intellectual property doesn’t always fit into that framework. The harm done by individual acts of piracy is too small and too abstract. “The nature of intellectual property,” he wrote, “makes it hard to maintain the social and empathic constraints that keep us from taking each other’s things.”
In other words, we kept to our rules about IP as long as it was attached to a physical object: a book, a CD, a videotape. Now that it consists of endlessly replicable electrons, we are ethically unmoored. Younger generations expect music and now video to be free—and when it isn’t, they feel entitled to take it anyway. College students see no problem with downloading music without paying for it—an attitude even more prevalent among younger students. Pew’s surveys indicate that 75 percent of respondents aged 12 to 17 agree that “file-sharing is so easy to do, it’s unrealistic to expect people not to do it.” They are Generation Free, and they just might kill the goose that lays the golden egg.
Optimists argue that the music industry has coped before with disruptive new technology. Until recordings came along, songs, not singers, were Big Business. So while copyright law allocated royalties for performances, it said nothing about what happened when you recorded those performances and sold thousands of copies of the recording. Only after protracted legal maneuvering did we work out an arrangement that allowed both businesses to thrive.
Can we do it again? Can the market evolve fast enough to keep up with the expectations, and predations, of Generation Free? Even if the music industry manages, what about all the other businesses that depend on intellectual property—including (gulp) my own?
In 2007, Radiohead famously allowed their extremely loyal fan base to download their new album, In Rainbows, on a pay-what-you-like scheme. Sixty-two percent of those who did so liked to pay nothing. The rest paid an average of just $6 apiece. And more fans downloaded the album from file-sharing services than from the band’s Web site.
Pish-tosh, say the optimists; Radiohead made money, didn’t they? The optimists offer alternative explications for the sorry state of the recording business: it’s a cyclical downturn, plus all the music from the big labels just happens to suck right now, and anyway MP3s are becoming loss leaders for concerts.
True, collectors switching from cassette and vinyl to CD swelled the music industry’s coffers in the 1980s and ’90s, so the eventual softening of sales is hardly surprising. The concert industry is indeed booming despite the downturn. And people who admit to downloading music illegally may actually spend more money on recorded music than people who don’t. One assumes they plump up concert revenues as well.
Yet even if die-hard music buffs spend more on albums than the guy who buys one box set a year, they’re still buying less than they used to. Moreover, spending less on recorded music doesn’t necessarily mean you spend more on shows; the savings could just as easily go toward beer. And even avid music lovers in urban areas can see only a few shows a week. To raise revenue, you have to get new customers in the door or raise ticket prices.
Concert-promotion mogul Michael Rapino has said that just 2 percent of Americans attend more than a couple of concerts a year, which leaves plenty of room to increase attendance, but also suggests that most people don’t particularly care for live music. It’s far from clear that free MP3s increase the number of concertgoers, instead of just changing the mix of shows they attend.
Higher ticket prices are already a fact—but not necessarily for the ordinary bands that grind their way through small and medium-size venues. In 1990, when I first started going to see live music, you paid $5 for a new act, $10 for solid performers, and $15 to $20 for hot favorites. Adjusted for inflation, that’s about what I still pay.
Tickets to major shows can cost hundreds. But that doesn’t promise much for the future of music. Here are the top 10 touring acts of 2009, according to Pollstar: U2, Bruce Springsteen, Elton John and Billy Joel, Britney Spears, AC/DC, Kenny Chesney, the Jonas Brothers, the Dave Matthews Band, Fleetwood Mac, and Metallica. For most of the demographic that attends these shows, sex, drugs, and rock and roll now means putting on a Beatles album and popping some Viagra—or asking Mom for permission to see an R-rated movie. All that these blockbuster concert revenues really tell us is that Baby Boomers have credit cards and their children have access to them.
To be sure, today’s 20-something file-sharer may someday pay $200 to watch Vampire Weekend rock the Astrodome. Or maybe not; the Internet tends to fragment audiences. Generation X, of which I am a member, was probably the last to grow up with the Top 40 and only a few TV stations—and the kind of common taste that this structure instilled. The bounty of the World Wide Web encourages niche interests. If you look at the Recording Industry Association of America’s top albums, only two of the acts who debuted this decade have sold 10 million albums, and one of them was Norah Jones, who has deep fogy appeal.
This fragmentation has been good news for performers like Jonathan Coulton, who makes a decent living selling quirky songs and related merchandise on his Web site. But the broader music industry, like other entertainment fields, has always worked on a tournament model: a lot of starving artists hoping to be among the few who make it big. What happens to the supply of willing musicians when the prize is an endless slog through medium-size concerts at $25 a head?
Moreover, whatever the sins of the big labels, they invest heavily in finding, promoting, and recording new music. Thom Yorke, Radiohead’s lead singer, has said that their experiment wouldn’t have worked as well as it did if they hadn’t already been through “the whole mill” of the old system. People tend to underestimate the extent to which the old industry supports things like … concert attendance.
These problems will even more deeply afflict the other industries that depend on IP. A smaller, more amateur music business is possible, if not optimal. But I doubt that YouTube can substitute for Hollywood in a world where “cheap” indie films can cost millions. Children’s films might be made at a loss to sell action figures—but how do you finance The Godfather? With a co-branded line of frozen cannoli?
As for the publishing industry, a year is a long stretch to spend typing without some prospect of financial return. Time was when authors could make money from sidelines such as public speaking; Mark Twain pulled himself out of bankruptcy by going on the lecture circuit. But Twain wasn’t competing with home-theater systems. Some journalists manage to make big money from corporate speaking fees, but that’s not an option for novelists or poets.
We have yet to figure out how to make IP work in the new era. Even if we don’t, people will still make pictures, sing songs, and write stories—just not as frequently, or as lavishly. But even if we do, file-sharing will probably alter the form of the works we do create. The popular arts may come to look more like the rest of the Internet: many labors of love produced quickly and cheaply in spare moments, and a few high-end productions that can be monetized.
Forms are already changing. The movie industry is moving into 3-D, which is harder to reproduce at home. Studios are also relying more on blockbuster movies that maximize the theater experience—and the revenues they earn from toys and comic books.
When the printing press was invented, many monks mourned the decline of vellum and the loss of the illuminator’s art. They were right, of course—but they were even more wrong. Maybe something better is coming, even as the transition racks the nerves of writers and artists. As the old joke goes, we may be losing something on every unit—but perhaps we’ll make it up in volume.
Source
Tuesday, February 16, 2010
Faith Evans Talks New Album, 'Worth The Wait'
With an over five year break from music, you might think "Can't Believe" and "You Gets No Love" singer Faith Evans would be concerned about the condition of the industry and competition. According to Evans, there is no need to be apprehensive.
"I don't feel apprehensive at all. There are a group of people out there, no matter how big or small that are waiting for my record," Evans tells BV Buzz. "When people see me out at the baseball games and at the grocery stores, they inquire about my music and that makes me feel good. It lets me know that they're still waiting and that makes me excited."
Fast at work on a new album, Evans says the wait will be well worth it.
"I work based on my heart and how people make me feel," said Evans. "And I'm believing 100 percent that it will be well worth the wait."
As previously reported, Faith Evans will release the as-yet-untitled sixth studio album through E1 Music and her label Prolific Music Group
"I don't feel apprehensive at all. There are a group of people out there, no matter how big or small that are waiting for my record," Evans tells BV Buzz. "When people see me out at the baseball games and at the grocery stores, they inquire about my music and that makes me feel good. It lets me know that they're still waiting and that makes me excited."
Fast at work on a new album, Evans says the wait will be well worth it.
"I work based on my heart and how people make me feel," said Evans. "And I'm believing 100 percent that it will be well worth the wait."
As previously reported, Faith Evans will release the as-yet-untitled sixth studio album through E1 Music and her label Prolific Music Group
Lady Gaga, Jay-Z set to play at Brit Awards show
LONDON — Chanteuse Lady Gaga is up for three awards as women dominate the shortlist for British music's Brit Awards in London on Tuesday.
Lady Gaga is scheduled to perform at Earl's Court arena during the ceremony, one of the biggest nights of the British music year.
She's nominated for best international female artist, best album and breakthrough act of the year.
Florence and the Machine, Pixie Lott and Lily Allen also have three nominations each.
British contenders include boy band JLS, Leona Lewis, Bat for Lashes, Paolo Nuttini and Dizzee Rascal, while former "Take That" member Robbie Williams will receive a special award for contribution to music.
Also due to perform are Jay-Z, Alicia Keys and Allen. A video message from Prince Harry is scheduled to give the show, which has sometimes taken a raucous turn in the past, a royal stamp of approval.
International nominees include Bruce Springsteen, Eminem, Jay-Z, Michael Buble and Shakira.
The awards are the British equivalent of the Grammys, with most winners selected by a vote of more than 1,000 industry members.
Source - AP
Lady Gaga is scheduled to perform at Earl's Court arena during the ceremony, one of the biggest nights of the British music year.
She's nominated for best international female artist, best album and breakthrough act of the year.
Florence and the Machine, Pixie Lott and Lily Allen also have three nominations each.
British contenders include boy band JLS, Leona Lewis, Bat for Lashes, Paolo Nuttini and Dizzee Rascal, while former "Take That" member Robbie Williams will receive a special award for contribution to music.
Also due to perform are Jay-Z, Alicia Keys and Allen. A video message from Prince Harry is scheduled to give the show, which has sometimes taken a raucous turn in the past, a royal stamp of approval.
International nominees include Bruce Springsteen, Eminem, Jay-Z, Michael Buble and Shakira.
The awards are the British equivalent of the Grammys, with most winners selected by a vote of more than 1,000 industry members.
Source - AP
Wednesday, February 10, 2010
Warner Music Shoots Self In Head; Says No More Free Streaming
A few years back, it seemed like Warner Music actually had a better handle on where the music industry was heading than its 3 major label rivals. In the last two years, however, it seems like WMG has consistently gone further and further in the opposite direction. It may have hit a new low today with the announcement that it will pull out of all free streaming music licensing offers. Yes, Warner Music just told the one thing that was effectively competing with unauthorized downloads to shove off. Brilliant.
"Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed.
"The 'get all your music you want for free, and then maybe with a few bells and whistles we can move you to a premium price' strategy is not the kind of approach to business that we will be supporting in the future."
And thus, WMG will go out of business that much more quickly. That is the model that the market is moving to, and Bronfman and WMG appear to have decided to ignore what the market wants, to cover their eyes, stick fingers in their ears and go down with a ship that could easily be righted. Incredible.
Now, Warner may be a bit gun-shy after its investment in iMeem (a free online music streaming service) became a total disaster, but what Warner doesn't seem to realize is that a big part of why it failed was the ridiculous demands Warner put on iMeem in terms of how much it demanded in payment per stream. The problem is that WMG has totally unrealistic expectations of how much money should be paid per stream, and that's because the company's top execs still don't seem to handle basic economic modeling particularly well. And thus, the company will fail.
You don't compete with "free" by taking your ball and going home. You don't compete with "free" by pretending that old artificial scarcities are coming back after the wall has been broken down. You don't compete with "free" by suing customers. You don't compete with "free" by shunning those who have business models that work. You compete with free by offering a better product and a better business model. WMG is choosing to go in the other direction. Best of luck to them...
Source
"Free streaming services are clearly not net positive for the industry and as far as Warner Music is concerned will not be licensed.
"The 'get all your music you want for free, and then maybe with a few bells and whistles we can move you to a premium price' strategy is not the kind of approach to business that we will be supporting in the future."
And thus, WMG will go out of business that much more quickly. That is the model that the market is moving to, and Bronfman and WMG appear to have decided to ignore what the market wants, to cover their eyes, stick fingers in their ears and go down with a ship that could easily be righted. Incredible.
Now, Warner may be a bit gun-shy after its investment in iMeem (a free online music streaming service) became a total disaster, but what Warner doesn't seem to realize is that a big part of why it failed was the ridiculous demands Warner put on iMeem in terms of how much it demanded in payment per stream. The problem is that WMG has totally unrealistic expectations of how much money should be paid per stream, and that's because the company's top execs still don't seem to handle basic economic modeling particularly well. And thus, the company will fail.
You don't compete with "free" by taking your ball and going home. You don't compete with "free" by pretending that old artificial scarcities are coming back after the wall has been broken down. You don't compete with "free" by suing customers. You don't compete with "free" by shunning those who have business models that work. You compete with free by offering a better product and a better business model. WMG is choosing to go in the other direction. Best of luck to them...
Source
Sunday, February 7, 2010
Music Industry Counts the Cost of Piracy
PARIS — Worldwide sales of recorded music fell by about 10 percent last year, a trade group said Thursday, as revenue growth from digital services was insufficient to compensate for a continuing fall in sales of compact discs.
The group, the International Federation of the Phonographic Industry, used the publication of the figures as an opportunity to renew its calls for a tougher crackdown on digital piracy, which it blames for a 30 percent decline in global music sales from 2004 to 2009.
“We’re all fed up with talking about piracy,” said John Kennedy, chief executive of the trade group. “It’s boring talking about piracy, but it is the problem and we can’t avoid it.”
Critics say music companies have been too slow to embrace new online business models that are attractive enough to lure music fans away from pirate sites.
Over the past year, however, Internet streaming services like Spotify, which offer free listening, supported by advertising or subscriptions, have gained a growing following. Revenue from streaming is accelerating as growth in sales of digital downloads from services like Apple’s iTunes slows.
Global sales via the Internet, mobile phones and other digital methods rose 12 percent last year to $4.2 billion. Digital sources accounted for 27 percent of recording industry revenue, up from 21 percent a year earlier, the trade group said.
But sales of CDs fell by about 16 percent worldwide, causing overall industry revenue to decline to about $15.8 billion in 2009 from about $17.5 billion a year earlier, in figures adjusted for swings in exchange rates.
“Sadly, today we are not at the turning point,” Mr. Kennedy said. “I still hope that in a few years’ time, that point will come.” He said that the industry slump, which has persisted since a 2001 peak in revenue, was hurting the development of local music in a number of markets hit hard by piracy, as record labels have less money to invest in new artists.
In France, for example, the number of albums released by domestic artists has fallen by 60 percent, he said.
In Spain, where music sales have collapsed, there were no albums by domestic artists among the top 50 sellers last year, compared with 10 as recently as 2003, the music federation said. In a report, it blamed what it called a “culture of state-tolerated apathy toward illegal file-sharing.”
Worldwide, the industry federation says, 95 percent of the music downloaded via the Internet is pirated, a percentage that has not changed over the past year.
In recent months, governments in South Korea, Taiwan and France have enacted tough laws aimed at curbing unauthorized copying by authorizing the cutoff of persistent pirates’ Internet connections. Music executives want other governments to adopt such measures, which have encountered fierce resistance from civil liberties groups.
“It’s not enough for us to be proactive with our business partners,” said Eric Daugan, a senior vice president at Warner Music International. “We also need our governments to help.”
Source
The group, the International Federation of the Phonographic Industry, used the publication of the figures as an opportunity to renew its calls for a tougher crackdown on digital piracy, which it blames for a 30 percent decline in global music sales from 2004 to 2009.
“We’re all fed up with talking about piracy,” said John Kennedy, chief executive of the trade group. “It’s boring talking about piracy, but it is the problem and we can’t avoid it.”
Critics say music companies have been too slow to embrace new online business models that are attractive enough to lure music fans away from pirate sites.
Over the past year, however, Internet streaming services like Spotify, which offer free listening, supported by advertising or subscriptions, have gained a growing following. Revenue from streaming is accelerating as growth in sales of digital downloads from services like Apple’s iTunes slows.
Global sales via the Internet, mobile phones and other digital methods rose 12 percent last year to $4.2 billion. Digital sources accounted for 27 percent of recording industry revenue, up from 21 percent a year earlier, the trade group said.
But sales of CDs fell by about 16 percent worldwide, causing overall industry revenue to decline to about $15.8 billion in 2009 from about $17.5 billion a year earlier, in figures adjusted for swings in exchange rates.
“Sadly, today we are not at the turning point,” Mr. Kennedy said. “I still hope that in a few years’ time, that point will come.” He said that the industry slump, which has persisted since a 2001 peak in revenue, was hurting the development of local music in a number of markets hit hard by piracy, as record labels have less money to invest in new artists.
In France, for example, the number of albums released by domestic artists has fallen by 60 percent, he said.
In Spain, where music sales have collapsed, there were no albums by domestic artists among the top 50 sellers last year, compared with 10 as recently as 2003, the music federation said. In a report, it blamed what it called a “culture of state-tolerated apathy toward illegal file-sharing.”
Worldwide, the industry federation says, 95 percent of the music downloaded via the Internet is pirated, a percentage that has not changed over the past year.
In recent months, governments in South Korea, Taiwan and France have enacted tough laws aimed at curbing unauthorized copying by authorizing the cutoff of persistent pirates’ Internet connections. Music executives want other governments to adopt such measures, which have encountered fierce resistance from civil liberties groups.
“It’s not enough for us to be proactive with our business partners,” said Eric Daugan, a senior vice president at Warner Music International. “We also need our governments to help.”
Source
Thursday, January 7, 2010
US Music Sales Decline 13% in 2009
U.S. album sales in 2009 declined for the eighth time in nine years, according to Nielsen SoundScan, while online song downloads grew too slowly to close the gap.
The data, released Wednesday, indicate that the recorded-music industry is still struggling to adapt to the digital age, even as SoundScan said digital downloads now account for 40% of music purchases.
Domestic album sales, including digital downloads, fell to 373.9 million units, a decline of 13% from 2008. Music fans bought 1.16 billion individual songs from services such as Apple Inc.'s iTunes Store, an increase of 89 million units, or 8.3%, from 2008. That represents a significant slowdown in digital-sales growth. In 2008, sales of digital songs increased by 226 million, or 27% over the previous year.
Combining album sales with what SoundScan calls "track equivalent albums"—counting 10 separate song downloads as the equivalent of a single album purchase—sales fell by 8.5%.
The best-selling album of the year, Taylor Swift's "Fearless," sold 3.2 million copies. By contrast, N Sync's "No Strings Attached" sold 9.9 million in 2000, the year the CD-sales boom peaked. That year, Americans bought 785.1 million albums, the most on record.
Vivendi SA's Universal Music Group continued to have the largest share of the market, with 30% of albums sold. Sony Corp.'s Sony Music Entertainment, however, closed the gap considerably, with 29% of albums sold—a gain of more than three percentage points from 2008.
Sony's market share got a major boost from the death of Michael Jackson, which propelled the late pop singer to the top of the list of best-selling artists, with 8.3 million albums sold.
One of the biggest surprises of the year came from singer Susan Boyle, whose debut album was released only in late November yet became the second-bestselling album of the year, with 3.1 million copies sold.
The 48-year-old Scotswoman was a runner-up on the "Britain's Got Talent" competition program. Thanks to a combination of YouTube popularity and numerous appearances on traditional media outlets like morning news programs, Ms. Boyle became an unlikely global celebrity.
Mr. Jackson's hits collection "Number Ones" was the third-biggest album of the year, with 2.4 million copies sold.
The Black Eyed Peas had the two biggest selling songs: "Boom Boom Pow" and "I Gotta Feeling." The Peas' label mate on Interscope Records, Lady Gaga, had the No. 3 song, "Poker Face."
source
The data, released Wednesday, indicate that the recorded-music industry is still struggling to adapt to the digital age, even as SoundScan said digital downloads now account for 40% of music purchases.
Domestic album sales, including digital downloads, fell to 373.9 million units, a decline of 13% from 2008. Music fans bought 1.16 billion individual songs from services such as Apple Inc.'s iTunes Store, an increase of 89 million units, or 8.3%, from 2008. That represents a significant slowdown in digital-sales growth. In 2008, sales of digital songs increased by 226 million, or 27% over the previous year.
Combining album sales with what SoundScan calls "track equivalent albums"—counting 10 separate song downloads as the equivalent of a single album purchase—sales fell by 8.5%.
The best-selling album of the year, Taylor Swift's "Fearless," sold 3.2 million copies. By contrast, N Sync's "No Strings Attached" sold 9.9 million in 2000, the year the CD-sales boom peaked. That year, Americans bought 785.1 million albums, the most on record.
Vivendi SA's Universal Music Group continued to have the largest share of the market, with 30% of albums sold. Sony Corp.'s Sony Music Entertainment, however, closed the gap considerably, with 29% of albums sold—a gain of more than three percentage points from 2008.
Sony's market share got a major boost from the death of Michael Jackson, which propelled the late pop singer to the top of the list of best-selling artists, with 8.3 million albums sold.
One of the biggest surprises of the year came from singer Susan Boyle, whose debut album was released only in late November yet became the second-bestselling album of the year, with 3.1 million copies sold.
The 48-year-old Scotswoman was a runner-up on the "Britain's Got Talent" competition program. Thanks to a combination of YouTube popularity and numerous appearances on traditional media outlets like morning news programs, Ms. Boyle became an unlikely global celebrity.
Mr. Jackson's hits collection "Number Ones" was the third-biggest album of the year, with 2.4 million copies sold.
The Black Eyed Peas had the two biggest selling songs: "Boom Boom Pow" and "I Gotta Feeling." The Peas' label mate on Interscope Records, Lady Gaga, had the No. 3 song, "Poker Face."
source
Record High Record Sales
Thanks to the success of downloads, the UK singles market had its best year ever in 2009, with more than 150m copies sold
The growth of downloads helped the UK singles market enjoy its best year ever in 2009. According to figures released by the British Phonographic Industry (BPI), 152.7m singles were sold last year, 98% of which comprised tracks that were downloaded.
The X Factor was behind many of last year's success stories in the singles chart, including Cheryl Cole, Alexandra Burke and the Christmas No 1 battle between Joe McElderry and Rage Against the Machine. A record 4.56m singles were sold in the last week of 2009, traditionally part of the biggest sales period for the music industry. Black Eyed Peas, La Roux and Lady Gaga were also among the biggest sellers of 2009.
Despite the continuing growth of the downloads market, only 128.9m albums were sold last year, a drop of 3.5% on 2008. Adam Liversage, head of communications at BPI, suggested that a number of factors contributed to the drop in album sales.
"Prior to their closure last year, Woolworths and Zavvi accounted for approximately 17.9% of album sales. Their demise meant that their were fewer places to buy music on the high street, with the exception of HMV and supermarkets such as Tesco."
Liversage also pointed to the growth in the number of online retailers in 2009. "While traditional methods of music sales suffered, online retailers offered unprecedented levels of competitive pricing, as well as the option to pick and choose individual album tracks rather than the whole LP."
Kim Bayley, director general of the entertainment retailers association, said "2009 started on a low note after the collapse of Woolworths and Zavvi, but entertainment retailers across the board worked with their suppliers to end the year with a far better result than anyone had expected."
source
The growth of downloads helped the UK singles market enjoy its best year ever in 2009. According to figures released by the British Phonographic Industry (BPI), 152.7m singles were sold last year, 98% of which comprised tracks that were downloaded.
The X Factor was behind many of last year's success stories in the singles chart, including Cheryl Cole, Alexandra Burke and the Christmas No 1 battle between Joe McElderry and Rage Against the Machine. A record 4.56m singles were sold in the last week of 2009, traditionally part of the biggest sales period for the music industry. Black Eyed Peas, La Roux and Lady Gaga were also among the biggest sellers of 2009.
Despite the continuing growth of the downloads market, only 128.9m albums were sold last year, a drop of 3.5% on 2008. Adam Liversage, head of communications at BPI, suggested that a number of factors contributed to the drop in album sales.
"Prior to their closure last year, Woolworths and Zavvi accounted for approximately 17.9% of album sales. Their demise meant that their were fewer places to buy music on the high street, with the exception of HMV and supermarkets such as Tesco."
Liversage also pointed to the growth in the number of online retailers in 2009. "While traditional methods of music sales suffered, online retailers offered unprecedented levels of competitive pricing, as well as the option to pick and choose individual album tracks rather than the whole LP."
Kim Bayley, director general of the entertainment retailers association, said "2009 started on a low note after the collapse of Woolworths and Zavvi, but entertainment retailers across the board worked with their suppliers to end the year with a far better result than anyone had expected."
source
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