Think About These 2009 Music Sales Figures…
- 2009 U.S. music purchases up 2.1% over 2008
- Music sales exceeded 1.5 billion for the second consecutive year
- Overall music sales, digital track sales, vinyl LP sales all hit new highs
- Digital accounts for 40% of total U.S. music purchases
- More than 10 Billion music purchases in the U.S. for the decade
The full Nielson 2009 report shows a continuing drop in CD sales and full album sales along with slowing growth for digital sales. But when looking at the numbers its hard not to believe that here are the building block for a viable new music industry…even if it looks a lot different than the old one.
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I still think that art will always suffer when homogeneity and statistical analysis are applied. We should have learned that lesson by now. Consolidating and standardizing for the sake of predictability is the Nielson effect….and it is a bad one.
I don’t think any part of the industry getting back on it’s feet can occur without a true youth culture renaissance and right now there are too many old school obstacles to that sort of thing, like Nielson.
bbb
No please not you too… If you care to read the report you can see that the 2.1 % is in units! So 2 singles are more than 1 album… Thats like comparing apple and oranges and makes no sence….
While it is indeed an apples/oranges comparison, you’re missing a couple things, Music123:
– Album sales are way up overall, as a percentage of units. In some genres, virtually ALL sales are album (jazz and alternative are strong album markets for instance), with little change from historic norms.
– Per-unit profits for a well-managed company will always be higher for download-based digital products. They cost less to make, less to sell, and less to deliver, with higher retail margins built in. Also studies have shown that a high proportion of direct-redeemable sales go unclaimed after purchase – for a label, this means you got paid for nothing (no bandwidth charges for d/ls that don’t happen, storage is a constant). This doesn’t help with iTunes, but works wonders on a label’s platform. Of course a poorly managed old-school company (a casino mashed up with a payday lending operation) can certainly figure out ways to lose money on millions of sales.
– Individual artist sales are peaking at something closer to historic norms again; Platinum level sales are again Platinum (Just last year Dave Allen was saying Gold is the new Platinum. He was apparently wrong). So a mass-market for music is re-emerging.
– Promotion and metrics of the emerging industry can be used to control costs, and limit investment based on performance because we know more about fans (individually and demographically).
Bottom line: 1.5 billion sales of anything in $ units is significant and viable, given that costs are much lower and more tangible. A big major label, set up to move plastic around the globe will continue to struggle because they’re swimming against the current. Sales are moving away from their cash cows, while at the same time their accounting practices are stinking up the joint, making it harder to get new artists.
I cannot help but wonder if Nielsen tricked you on this one. Of course, if you count every single transaction things will go up, and the recording industry is in a lot of trouble.
I agree that things suck out there. My point with the post was to suggest that there is still a large number of transactions taking place and $’s changing hands. That’s a place to rebuild the business in a new direction from.
Does anybody have actual dollar numbers?
A more recent post lists sales figures for the past 2 years. 2008 shows as $8.4 billion and 2009 shows as $7.31 billion, so yes revenue went down. Also, Nielsen has two e’s and no o’s.
Just sayin’.
But margins on digital are potentially higher (potential requires competence and transparency to be realized), and not by a little. Downloadables (not iTUnes, but direct) are an example of a stream where virtually all revenue can be captured by a label, and splits to artist can be even better than iTunes, even if prices are lower.
Also there are a lot of ways to exchange/chain value to music (not just ads, but sponsorships etc), where it can be free-to-consumer and at the same time paid-to-artist… in some cases, you make money on units, sold or not.
Bottom line a competent label/provider can make more profit per unit, regardless of that lower gross. A transparent relationship will get artists paid. I won’t argue that either is the case for most of the dollars accounted for by Nielsen – in fact I assume neither for most major label products! But for everyone else, this is great news.
More is more. The fact that you can’t move packaged junk (crap albums) is irrelevant, even to those making the junk. It just means artists are selling tons of singles at higher margin vs fewer albums at higher unit price but lower margin. It means you don’t have to predict hits, or gamble on inventories to cash in. It also means more artists are getting heard by more fans more easily. That big slices of pie no longer magically accrue to those in the scarcity-business isn’t really surprisng or bad news.