Music Sales(nytimes.com)
nytimes.com
Music Sales
http://www.nytimes.com/imagepages/2009/08/01/opinion/01blow.ready.html
42 comments
There's a box around download album sales reading $0.60 - what's that? 60c albums only? A lot of the value for units shipped comprises of the cost of the physical value of the media and its transportation. Is the comparison legitimate if it compares the value of CDs shipped VS download sales?
Too bad the gravy train has ended for the RIAA - recouping losses by suing file-sharers is like a kid throwing a violent tantrum when their toy broke.
Too bad the gravy train has ended for the RIAA - recouping losses by suing file-sharers is like a kid throwing a violent tantrum when their toy broke.
> There's a box around download album sales reading $0.60 - what's that?
I think that's in millions (or billions) of dollars. Notice that there is also '1978: $8.1' next to LP/EP and '1988: $6.1' next to Cassette. I think they are trying to label the peak of sales (those black bordered sections) with the volume of revenue.
{edit} It says 'billions' at the top {/edit}
I think that's in millions (or billions) of dollars. Notice that there is also '1978: $8.1' next to LP/EP and '1988: $6.1' next to Cassette. I think they are trying to label the peak of sales (those black bordered sections) with the volume of revenue.
{edit} It says 'billions' at the top {/edit}
ok, well iTunes sales were $3.34 Billion in 2008. That's over double the combined RIAA figure of album and singles sales. http://tr.im/yZ7K I remember reading that Apple doesn't take a large cut of that amount if that even mattered here, so sounds like these figures are wrong, especially when other online music retailers are taken into account.
I think they probably consider buying a single track from an album and buying a 'digital single' (a small release with 1 or more tracks) two different things.
I doubt the former case is considered a 'single' in the traditional sense of the word in the music industry.
I doubt the former case is considered a 'single' in the traditional sense of the word in the music industry.
Unfortunately, no doubt these numbers do not count non-label/unsigned record sales as "thedark" mentioned. This is due to the fact that according to major labels and the FCC, these numbers don't count, simply because they don't receive a cut of those sales.
Once we develop a legitimate platform for unsigned musicians to use and compete with the major labels, their artists, and the money they make. Then we will begin to see some numbers that include unsigned artists. Because once they begin to make competitive noise, the labels and FCC will certainly try to begin to get involved and want to regulate as they always do. But as long as the independent artist stays technically "unsigned", there's nothing the regulators can do to control the music, or get a piece of the earnings.
Once we see this happen, those downloaded album and singles sales numbers rise dramatically. Force the RIAA to count you. Record and be heard.
Once we develop a legitimate platform for unsigned musicians to use and compete with the major labels, their artists, and the money they make. Then we will begin to see some numbers that include unsigned artists. Because once they begin to make competitive noise, the labels and FCC will certainly try to begin to get involved and want to regulate as they always do. But as long as the independent artist stays technically "unsigned", there's nothing the regulators can do to control the music, or get a piece of the earnings.
Once we see this happen, those downloaded album and singles sales numbers rise dramatically. Force the RIAA to count you. Record and be heard.
There is no "dark" market worth mentioning in this context. There are simply no significant sales beyond the major labels and their subsidiaries. The four major labels account for more than 80% of ALL music sold in the USA and the 1600 members of the RIAA account for more than 90%.
The topmost performers in the indie market may achieve some success on their own, as individuals, but in aggregate the total indie market is a disaster.
The topmost performers in the indie market may achieve some success on their own, as individuals, but in aggregate the total indie market is a disaster.
"thedark", is the username of the previous poster. Not an actual reference to anything regarding this post itself. Looks like you got the wrong message.
The reason for low sales outside major labels, is the fact that there are no outlets for unsigned musicians that are worthwhile, and major labels regulate what you hear, and who is heavily promoted. And therefore, the competiton is not level. Unsigned musicians cannot afford expensive studio time to record, have little avenues to promote and sell, and therefore just cant compete. The indie market is a "disaster" as you put it, because major labels, the RIAA and FCC keep it that way on purpose. Who wants an area of business to succeed and compete, if they cannot get a piece of that revenue? No one.
Now how about Digg has done for news, and YouTube has done for music? Leveled the playing field, and taken some of the wind out of the sails of major media. And put more power in the hands of the consumer, and allow then to choose whats best in music. Not tell them what you want them to listen to.
The reason for low sales outside major labels, is the fact that there are no outlets for unsigned musicians that are worthwhile, and major labels regulate what you hear, and who is heavily promoted. And therefore, the competiton is not level. Unsigned musicians cannot afford expensive studio time to record, have little avenues to promote and sell, and therefore just cant compete. The indie market is a "disaster" as you put it, because major labels, the RIAA and FCC keep it that way on purpose. Who wants an area of business to succeed and compete, if they cannot get a piece of that revenue? No one.
Now how about Digg has done for news, and YouTube has done for music? Leveled the playing field, and taken some of the wind out of the sails of major media. And put more power in the hands of the consumer, and allow then to choose whats best in music. Not tell them what you want them to listen to.
100% - 90% is still 10%.
Saying there's no "dark" market is like saying there are no desktop OSes bare Windows.
But, there is one or two, you know; and it bites.
Saying there's no "dark" market is like saying there are no desktop OSes bare Windows.
But, there is one or two, you know; and it bites.
I always really like the NYTimes graphics. They do a good job displaying info, and (not applicable to this one) their flash graphs are always more helpful than annoying.
NYT does a great job of pushing the limits in infovis, but they don't always hit the mark. This vis seems to show an approximate fixed scale on the y-axis, which is good. It means the differences in heights between the blobs are relevant. The fact that they layout multiple charts along the y-axis seems acceptable, in fact it allows for quick comparison between graphs. However, the x-axis is unlabeled and unclear. It seems to roughly represent time, but has no origin. One can sort of deduce approximate time but without a clear label I can't dive deeper into the information. This seems to be the failing of many info visualizations I come across these days. They either optimize for the "quick glace" or the "in-depth analysis" when you can get a happy medium by usually just tweaking one or two aspects of the display (in this case I would argue a labeled x-axis).
"Value of units shipped from 1973 to 2008"
I read the text. My point is there is no visual aid to help you come to definitive conclusions like "Between 1999 and 2002 we see an exponential decline in cd sales." You can guess but that's about it.
I agree. Edward Tufte would approve.
an easy fix that wouldn't have damaged the visual integrity would have been to separate the years slightly with a white line, rather than have a big solid blob of color.
Looks to me like CD sales were a bubble, and there's no reason to expect the music industry's success to continue as it has for the prior decade.
It's not a bubble, the product just became obsolete with newer technology and demand for industry slacked with internet marketing. CDs were (and still are to some extent) a fantastic media for storing music, but mp3 has huge advantages.
The late 90s was also the end of the pre-internet era, where the dominant way to market music was radio, TV, and print. In 1995 you had to try hard to discover music outside the mainstream. In 2005 you could go to MySpace and listen to an hour of music without ever hearing a top 40 song.
The late 90s was also the end of the pre-internet era, where the dominant way to market music was radio, TV, and print. In 1995 you had to try hard to discover music outside the mainstream. In 2005 you could go to MySpace and listen to an hour of music without ever hearing a top 40 song.
Well, there was a period when CD's were the cool new thing and everybody was buying all their record collection on CD again.
So, not only the labels were selling music by new artists at their usual pre-Internet levels, but there was also a big demand for old music in CD format. I suspect many older people that would not usually buy new music ended up buying many of their old albums again.
So, not only the labels were selling music by new artists at their usual pre-Internet levels, but there was also a big demand for old music in CD format. I suspect many older people that would not usually buy new music ended up buying many of their old albums again.
The question they must be asking themselves is how to repeat the bubble. The last one came from instituting a new technology which (in the popular imagination) rendered the old technology obsolete, and triggered a lot of repurchases. What kind of disruptive force, if any, could trigger this again?
I know! I know! Passing a bill to force the entire population of the U.S. to join BMG.
Obviously the answer was MP3s, but I think they might have missed the boat there...
Obviously the answer was MP3s, but I think they might have missed the boat there...
> Obviously the answer was MP3s, but I think they might have missed the boat there...
The problem was that it was too close to their current bubble at the time. These are the kind of things that large businesses try to artificially separate out so that they can maximize profit. Why bring in a new technology now when I can wait until later and make more money in the interim?
The problem was that it was too close to their current bubble at the time. These are the kind of things that large businesses try to artificially separate out so that they can maximize profit. Why bring in a new technology now when I can wait until later and make more money in the interim?
I don't know if that's entirely true - it's tough to tell without including 'illegal' dowloads in this chart, which is equally difficult to accurately measure against the RIAAs sales data.
However, it is very interesting to not how Vinyl, Cassettes and CDs all dovetail into each other nicely. I would be willing to bet that the rise of mp3 downloads and the decline of CDs would dovetail equally as well.
The problem was, I think, the mp3 wasn't a media format invented by/for the music industry.
However, it is very interesting to not how Vinyl, Cassettes and CDs all dovetail into each other nicely. I would be willing to bet that the rise of mp3 downloads and the decline of CDs would dovetail equally as well.
The problem was, I think, the mp3 wasn't a media format invented by/for the music industry.
You can't include 'illegal' downloads in there. Something that is free doesn't have the same market pressures as something that costs money.
If I download music illegally, I can download GBs upon GBs of music which would cost me thousands of dollars were I to purchase it. What if I don't have those thousands of dollars? It's not like you can say that I would have bought all of those albums if it was impossible to pirate and then add the thousands of dollars to 'lost CD/Legal Download Service sales.'
If I download music illegally, I can download GBs upon GBs of music which would cost me thousands of dollars were I to purchase it. What if I don't have those thousands of dollars? It's not like you can say that I would have bought all of those albums if it was impossible to pirate and then add the thousands of dollars to 'lost CD/Legal Download Service sales.'
No doubt. I don't disagree with that, as old as the argument is, but it would be interesting nonetheless to see how the rise of downloads dovetails with the decline of the CD format. If it's an even flow from CD to mp3, as it appeared to be with vinyl>cassette, then cassette>cd, or if it's disproportionate. It would actually go towards supporting or disproving your very argument.
However, I don't think there will ever be any trustworthy comparison like this, as the number of downloaded tracks was never reliably tracked in a manner that would be comparable to the RIAA unit sales data. Even if you could estimate the number of tracks downloaded, it would end up including things the RIAA doesn't include, like mashups, indy tracks, concert bootlegs, simpson quotes, etc.
However, I don't think there will ever be any trustworthy comparison like this, as the number of downloaded tracks was never reliably tracked in a manner that would be comparable to the RIAA unit sales data. Even if you could estimate the number of tracks downloaded, it would end up including things the RIAA doesn't include, like mashups, indy tracks, concert bootlegs, simpson quotes, etc.
To continue that train of thought it would be interesting to see a similar data visualization of consumption of all entertainment mediums (dvd video,blu ray video,video rentals,video games,video game rentals,etc) including piracy of those mediums as well.
I have a feeling that (other than the 'legal' vs 'illegal arguments) it would be very telling of the way that media consumption habits have trended over the past decade or so.
I have a feeling that (other than the 'legal' vs 'illegal arguments) it would be very telling of the way that media consumption habits have trended over the past decade or so.
There was no bubble.. just a market whose time has come and gone, much like the fabled buggy-whip.
The record industry (as opposed to the music industry) was a 20th century anomaly. Prior to the invention of the gramophone, music was largely a participatory affair.. singing to pass the time while working, to celebrate at a social function, to amuse and entertain friends and family and to pass on folklore from generation to generation.
The record as a social object and the idolatry of the rock star were temporary aberations.
The live performance end of the music industry will likely survive, but once all the big stars of the last few decades die off, even that will likely shrink dramatically in size.
The record industry (as opposed to the music industry) was a 20th century anomaly. Prior to the invention of the gramophone, music was largely a participatory affair.. singing to pass the time while working, to celebrate at a social function, to amuse and entertain friends and family and to pass on folklore from generation to generation.
The record as a social object and the idolatry of the rock star were temporary aberations.
The live performance end of the music industry will likely survive, but once all the big stars of the last few decades die off, even that will likely shrink dramatically in size.
What does 'value of units shipped' mean?? I'd beg the question that all they put out now is crap anyway, so I'd agree that the value is nothing compared to the old days.
I don't think I like that it's in billions of current dollars, seems a little misleading since they didn't actually have $8.1 billion in LP/EP sales in 1978.
Finally, the difference between CD and other digital media versus LPs and cassettes is that they don't wear out. You only have to buy it once, and if a bunch of your friends borrow it its not a big hassle.
I don't think I like that it's in billions of current dollars, seems a little misleading since they didn't actually have $8.1 billion in LP/EP sales in 1978.
Finally, the difference between CD and other digital media versus LPs and cassettes is that they don't wear out. You only have to buy it once, and if a bunch of your friends borrow it its not a big hassle.
Gross sales is irrelevant. A download costs virtually nothing. No CD to make, no shipping, no store front, not cover printing. The RIAA is misleading people with these types of numbers, no doubt they have lost money, but really, it isn't as bad as they pretend.
Total manufacturing/distribution costs for a CD are around $2.20 with a wholesale price of $6.50.
The labels still get the $6.50 more or less for a digital album (although that's falling) but they no longer have to worry about manufacturing a portion of their products (CDs are still 80% of the market.. digital is 20%) so at best they knocked off 20% of their manufacturing costs thus far.
So now for an equal numbers of units shipped the total cost is $1.76 per unit.
The labels also have to pay mechanical royalties to the artists.
So prior to the internet: $6.50 x 250,000 units minus royalties would net them around $700,000 gross profit.
But they would have paid $250,000 as an advance to the artists.
Net profit would be something like $450,000 on the initial $250,000 investment plus ongoing manufacturing and marketing costs.
If they hit it big, they get rich, but a dud might be a money loser or at best barely profitable.
The digital sales would boost their net profit by $110,000 for the same number of units sold, all else being equal. They would get a 2.24x return on their investment.
Keep in mind 250,000 units is now pretty good for a successful artist now.. the biggest album last year only sold 2.8 million copies.
Artists don't get the shaft anymore than any other business person does.
Labels are just VC.. they risk investing a small amount of money in a very large number of artists (a few hundred thousand) on a hunch that it might pay off. Most don't work out, but the ones that do make up for the rest.
80% of sales come from 50,000 albums pulled from the entire history of recorded music.. not very good odds.
The real problem is that nobody is buying music anymore. Period. Unit sales are dropping off a cliff.
The labels still get the $6.50 more or less for a digital album (although that's falling) but they no longer have to worry about manufacturing a portion of their products (CDs are still 80% of the market.. digital is 20%) so at best they knocked off 20% of their manufacturing costs thus far.
So now for an equal numbers of units shipped the total cost is $1.76 per unit.
The labels also have to pay mechanical royalties to the artists.
So prior to the internet: $6.50 x 250,000 units minus royalties would net them around $700,000 gross profit.
But they would have paid $250,000 as an advance to the artists.
Net profit would be something like $450,000 on the initial $250,000 investment plus ongoing manufacturing and marketing costs.
If they hit it big, they get rich, but a dud might be a money loser or at best barely profitable.
The digital sales would boost their net profit by $110,000 for the same number of units sold, all else being equal. They would get a 2.24x return on their investment.
Keep in mind 250,000 units is now pretty good for a successful artist now.. the biggest album last year only sold 2.8 million copies.
Artists don't get the shaft anymore than any other business person does.
Labels are just VC.. they risk investing a small amount of money in a very large number of artists (a few hundred thousand) on a hunch that it might pay off. Most don't work out, but the ones that do make up for the rest.
80% of sales come from 50,000 albums pulled from the entire history of recorded music.. not very good odds.
The real problem is that nobody is buying music anymore. Period. Unit sales are dropping off a cliff.
I'd be more interested to see a graph of net revenue (minus costs) over time by format. Straight revenue for online music might be smaller, but their media and distribution costs are much smaller as well.
So, CDs are still outselling downloadable content by as much as 3-5x?
CD sales accounted for 80% of the 428 million units sold in 2008 (from all media).
In comparison there were just under a billion units sold in 1999 and the backstreet boys had the biggest album with over 16 million copies. Last year the top seller, Lil Wayne only sold 2.8 million. It took the b-boys just over a week for comparable sales at the peak of the market.
If I'm not mistaken, Norah Jones first album was the last to break the 10 million barrier.
Total units sold started dropping at an annual compounded rate of 6%/year in 1999 through 2004. With the introduction of iTunes in 2003, "album substitution" started to take hold and the decline accelerated. Albums were being replaced by single track downloads on iTunes at a rate of roughly 1.4 downloaded tracks per CD album. With an average of 12 tracks per cd.. that's an 88% drop in per unit sales (1.4 tracks are around $1 on iTunes vs. $16-$20 for the CD album).
The music industry is alive and well but the record industry has basically been obliterated.
In comparison there were just under a billion units sold in 1999 and the backstreet boys had the biggest album with over 16 million copies. Last year the top seller, Lil Wayne only sold 2.8 million. It took the b-boys just over a week for comparable sales at the peak of the market.
If I'm not mistaken, Norah Jones first album was the last to break the 10 million barrier.
Total units sold started dropping at an annual compounded rate of 6%/year in 1999 through 2004. With the introduction of iTunes in 2003, "album substitution" started to take hold and the decline accelerated. Albums were being replaced by single track downloads on iTunes at a rate of roughly 1.4 downloaded tracks per CD album. With an average of 12 tracks per cd.. that's an 88% drop in per unit sales (1.4 tracks are around $1 on iTunes vs. $16-$20 for the CD album).
The music industry is alive and well but the record industry has basically been obliterated.
I don't understand why would people en masse download only one song from album. The rest have to be a real crap.
I can sometimes listen to a single song without looking at the rest, but that account for something like 5% of my listen, the staple being albums, of course.
I can sometimes listen to a single song without looking at the rest, but that account for something like 5% of my listen, the staple being albums, of course.
It is a direct result of pushing out pop crap to sell singles. The majority of the artists the industry markets are pop artists that want a hit single. That is what they push for that is what they get. If they would get behind real artists and market them and their work album sales would increase.
Look at the top charts for singles. Pick any artist in the top 10. Go somewhere you can preview the entire album and then ask yourself if you would buy it.
Look at the top charts for singles. Pick any artist in the top 10. Go somewhere you can preview the entire album and then ask yourself if you would buy it.
Another interesting surprise is that CDs are still bringing in close to the gross $ volume of cassettes at their peak. The music industry got fat partly on global sales, but also partly because they were making such a huge margin on CDs, even though they were cheaper and took up less shelf space than records.
When I was a techno DJ I spent a lot of money on both vinyl and CDs in my preferred genre (I was happy to support tiny niche labels), but I bought all my mainstream music on used CDs - they usually played fine and it was a lot cheaper. I would never have done this when vinyl was king and have never bought a cassette, ever.
When I was a techno DJ I spent a lot of money on both vinyl and CDs in my preferred genre (I was happy to support tiny niche labels), but I bought all my mainstream music on used CDs - they usually played fine and it was a lot cheaper. I would never have done this when vinyl was king and have never bought a cassette, ever.
> Another interesting surprise is that CDs are still bringing in close to the gross $ volume of cassettes at their peak.
It's not. The graph does not adjust the dollar amounts for inflation. (Or if it does it doesn't say so).
So the tape sales were more than they look.
It's not. The graph does not adjust the dollar amounts for inflation. (Or if it does it doesn't say so).
So the tape sales were more than they look.
Yes it does. I made the same mistake, but read the title: 'value of units shipped for 1973 to 2008, in billions of current dollars'.
This is skewed by bad inflation statistics.
I never knew that singles sold so tiny.
I don't understand why did anyone bother with them at all.
Singles were pressed for radio stations, back in the day. May as well sell 'em if you're already pressing them.
Sidenote: this is where the term 'B-side' came from. The A-side of the single had the song the music label wanted to promote, the B-side had some other song that most stations didn't play.
Sidenote: this is where the term 'B-side' came from. The A-side of the single had the song the music label wanted to promote, the B-side had some other song that most stations didn't play.
[deleted]
Oh! An interesting consideration! I didn't realize song couldn't get on air unless it was pressed!
I am not sure what I can conclude or deduce from this graph; when there is a small nagging glare of "Source: Recording Industry Association of America" down at the bottom, tracking my gaze.