In the wake of this week’s Radiohead fracas I believe it’s worth taking a step back and taking a look at what precipitated the global fascination in a major rock band’s decision to go it alone via the internet, coupled with the music industry’s flagging music sales. My belief is that the industry’s collective decision to scrap the cd single was a pivotal moment that sent sales into a massive downward spiral. I have posted here before that I have read enough research papers and essays that disprove the music industry’s mantra that internet music piracy has caused the decline, to be able to reiterate that I think access to free music online serves to help promote music sales not the reverse – ending the CD single reduced the music consumer’s affordable access to their favorite songs by their favorite artists, more than likely the songs they heard on the radio.
The single, which has historically been called a 45, as in 45rpm, a 7″ or 12″ single and finally a CD single, had been around since the early days of popular music (as in pop music); Sam Phillips’ Sun Records Studios in Memphis, TN was where artists such as Elvis Presley first cut their music to wax which was then released to the public and radio as the bands toured, usually in a revue, around the USA. These 45s were an easy and affordable way to get the music into the fans hands and were of course the most popular song in the artists’ repertoire. Now they have disappeared music fans have flocked online to get the tracks they want either legally or otherwise, and although people point to the iTunes model as a saviour to boost sales it appears that music fans are still buying singles, not full albums, therefore denying the music industry its ability to make up for lost revenues. The chart below shows the decline in physical single sales from 77.8 million in 1997 to 13.9 million in 2006 with digital single sales selling 53 million in 2006. [Download sales include single album tracks so do not reflect a rise in singles sales.]
This article in the London Times has the headline “Music Sales at Lowest Since Records Began” and no pun intended I bet. It says “Music sales worldwide are expected to plunge by about 11 per cent this year, making 2007 the worst year for the recording industry for more than a quarter of a century…..industry bosses forecast a 4-8 per cent decline in revenues, but at least one of the four biggest companies is preparing for an 11 per cent tumble as the shift to digital starts to make its impact felt. CD sales were down by about 20 per cent in the first half of this year in the US, the world’s largest music market, according to data released by Soundscan last week.”
Things are not healthy and with the news that Madonna has bailed on Warner Bros I wonder how many large artists will not renew their contracts with the labels. After all, the marquee, best-selling artists are the ones that provide the funds for the labels to invest in new talent – it seems that music sales will slip even further yet.
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- the end of the cd and the end of cd retailers….
- some excerpts from the effect of file sharing on record sales paper
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when will the killing…and the death…and the decline…end so we can move on?
October 11th, 2007 at 5:58 pmI keep wondering how all this Radiohead/NIN/Madonna news will translate to up-and-coming bands. As the major label’s lose their cash cow acts and the interweb becomes saturated with artists posting free MP3′s; how do musicians effectively find their audience? Furthermore how do emerging musicians make money given these new trends? Touring and merchandise only get a new band so far. God forbid if you’re a band that has more than five members or a group that has created a body of music that has high production value which doesn’t translate to some basement bar with one monitor mix.
So as Josh said we’re all ready to move on..but move on to what?
October 11th, 2007 at 8:17 pmFuck an A, Dave. This is a helluva post. It’s densely packed with research from a variety of sources that span the globe. You never cease to impress me with your finger on the pulse of the music industry. It’s no wonder that JoshK is ready for this chaotic rollercoaster to end. I agree with you that access to music breeds sales. Radio, as you’ve pointed out, has long been free to the consumer as a source for music that has inspired purchasing (kind of ironic that Radiohead is the subject that sparked this post :)
So where will the money go? I think the problem is perceived value and access. If people could hear a song for free on the radio and then push a button on their iPhone to buy more songs, they would. I think it is a matter of reducing barriers to the purchase process, especially on mobile devices, that will lead to more buying. Matt wrote a great post about the future of music being mobile.
October 11th, 2007 at 11:05 pmI think the more important question is not how people will access music but rather who will be the filter or gatekeeper. Labels, for better or worse, often decided who made it on to the radio..or who played Saturday Night Live. Right now I see MySpace and iTunes wielding a tiny bit of that filter power.
October 12th, 2007 at 8:15 amWhere will the money go? Who will be the gatekeeper? How will new musicians find their audience?
Marketing, Marketing, Marketing. Music marketing companies (which include the major labels) are going to find themselves on the front lines, clearing the way for bands that pay top dollar. Maybe advertisers will begin demanding a percentage of album sales. Marketing deals might replace record deals.
What gets played on the radio? At starbucks? Your gym? Who gets written about in Filter and on CMJ and Rolling stone, played on mtv? Bands who have the best-connected managers, publicists, and advertising agreements working for them.
October 12th, 2007 at 10:25 amDave, mainstream music is jinxed because its both a form and content problem. They are completely baffled by the internet, and as the London Times article astutely points out the promoted content is “forlorn”.
What’s happening is kids are downloading as fast as the tubes will allow, and discovering all kinds of new things all by themselves. They like power and the experience is empowering. Bands which can tour and bands which can build a local following will be successful, but as small businesses, and not sprawling corporate monsters. A few corporate monsters will persist until their moronic fans die off, but corporate execs who try to route kids back to corporate mindsuck don’t get it and are burning shareholder dollars. It’s a broken financial model.
It’s the sound of freedom, man. The music industry is dead. Long live music.
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April 2nd, 2009 at 7:55 pm