The album checking out in favour of the single.
So all you budding rock stars with a cool album in the can look out….things are on the move in the label world – covered in this article in the New York Times today entitled The Album, A Commodity In Disfavor. The long and the short of it being that the consumer now thinks that the single track download is where it’s at and the full length CD is a thing of the past. The future is quickly becoming the past. Be smart kids, don’t sign that contract…
Excerpt: “Last year, digital singles outsold plastic CD’s for the first time. So far this year, sales of digital songs have risen 54 percent, to roughly 189 million units, according to data from Nielsen SoundScan. Digital album sales are rising at a slightly faster pace, but buyers of digital music are purchasing singles over albums by a margin of 19 to 1.” And – “four years after Apple introduced its iTunes service — selling singles for 99 cents apiece and full albums typically for $9.99 — individual songs account for roughly two-thirds of all music sales volume in the United States. And that does not count purchases of music in other, bite-size forms like ring tones, which have sold more than 54 million units so far this year, according to Nielsen data.” I recommend retaining your publishing and master rights as the floodgates are about to burst….
dave- I’m wondering—in your estimation- what’s the profit margin on a single download vs a 10 track album download vs a cd purchase? I’ve heard you talk about bank fees for single transactions…what’s the overall affect here?
and…I also wonder….would dark side of the moon make it in today’s market?
March 27th, 2007 at 9:59 amThose numbers are malleable based on a lot of variance in the initial up front costs. For a company like the Moose the single, one song download, is not cost effective due to back end banking costs which consist of credit card clearance, a monthly service fee and a transaction fee all of which negate the .99 cents model except as a loss-leader. The full album download (no track limit) is very profitable as there are no manufacturing costs only the fees mentioned above plus bandwidth (which we already pay for.)
March 27th, 2007 at 11:06 amA CD has many up front costs – sleeve design, manufacturing, bar code, shrinkwrap and nowadays the retail price point is an issue. There has been a move to $9.99 for a CD to match the iTunes price – see Shins, Menomena. Without a label involved or another third party then the CD makes sense as there would be a decent margin in there. With a label, say Sub Pop for The Shins, then the margins on $9.99 would be slender at best. The model here that works best in my opinion would be sell as many downloads as possible (best margin of profit) followed by selling the CD direct to fans via your web site and at shows ( second best margin for profit) and finally put into retail distribution ( not recommended! sales are dropping precipitously across the board.)
I liked Beck’s approach with his latest album. He spent 3x times the money, from his own pocket, to include carefully designed stickers in the CD case. He encouraged his fans to design their own album covers using the stickers and share those with others online. Not sure if it increased his album sales one bit, but it’s an interesting approach. Also, it surely helps to a very successful ($$$) artist to put out something costly like custom stickers in your album.
March 27th, 2007 at 10:17 pm