wax&wires » album sales

Album Sales Down Again – Solution: More Celebrity Deaths

admin — Thu, 08 Oct 2009 23:00:40 +0000

The news on album sales hasn’t changed much over the past decade or so… you could sum it all up in one word, DOWN.

I was going to have a graph in here to help you visualize it, but instead, we can get interactive. Get a piece of paper and pen. Start in the top left corner and draw a line to the bottom right corner. Label the X-Axis “time”, and the Y-Axis “album sales” BOOM, visualized!

Interestingly enough, we saw a bit of slowing to the downturn this past quarter. Michael Jackson’s death and the re-release of The Beatles’ catalogue (selling 2.25M copies in 5 days) were a molasses to the decline of album sales, but figures are still abysmal. Even with the 6+ Million albums sold last quarter by the aforementioned artists alone, we’re down about 14% from album sales in 2008, which was down about the same from 2007.

It wasn’t as though we had shoddy artists putting out this year either. 2009 saw new albums from U2, Green Day, Dave Matthews Band, Eminem and countless other staple platinum sellers. It’s actually kind of interesting that the biggest selling music of 09 thus far was music recorded 20-40 years ago.

Of the 115,000 albums released, only 110 broke the quarter million mark; that’s less than 0.001%. And that’s only the halfway mark of going gold. Less than 6,000 albums even sold 1,000 copies.

What will help turn it around? I’m pretty sure MJ can’t die again… and The Beatles’ content (save coming to iTunes) can’t really be repackaged again. Apple’s iTunes LP might help drive a bit more energy behind album sales, but the adoption has been limited and slow at best.

Perhaps the answer isn’t in selling more albums, as I’ve alluded to before, but in using the music as a tool to sell other goods (live tickets, merchandise, licensing to commercial use, films, ring tones, etc.). Wasn’t it a few years ago that the number one selling song in the UK was a ring tone?

(stat source: Chicago Trib)

wax&wires tv – Episode 006: iTunes LP Review

admin — Mon, 21 Sep 2009 17:11:31 +0000

WAXandWIRES TV – Episode 6

Sticking with the new shorter format, I give a quick rundown of what iTunes LP brings to the table, what works and what doesn’t. Can it resurrect album sales in a digital market?

I like iTunes LP for the most part. They need to make it more easily accessible from a permanent link on the home page of the iTunes store. I want to be able to see every ITLP album on a single page quickly and easily, which right now there’s not a lot. Second, they need to transfer the experience to the iPhone so that you can have the full album, including bonus content, on the go.

You can check out iTunes LP, and all 12 albums available with it, here.

What do you think?

iTunes Crushes Music Downloads, But CDs Still Reign

admin — Thu, 20 Aug 2009 23:18:24 +0000

NPD just released a new study showing that iTunes now accounts for 25% of TOTAL music sold (downloads and CDs), and dominates the download front with a whopping 69% of the music download marketshare. WalMart is holding down second place with 14% of total music sales and Best Buy is bringing home the bronze.

This is in large part due to the fact that there are only a few select players in the digital download world (Amazon holding an 8% share, iTunes with it’s 69%, etc.), where as physical sales have a lot more fighters in the ring. Nonetheless, with NO physical sales (many companies like WalMart and Amazon have both digital downloads and physical sales), Apple is now the single largest music retailer. That’s crazy! 1 in 4 songs purchased today are purchased on iTunes!

You might be surprised to find that CDs still comprise 65% of all music sales; I’m not. I was an admittedly slow adopter of digital downloads, at least when compared to my haste in adopting other technologies. I think it was because I liked the album experience. I liked the higher audio quality. I liked going to the record store on Tuesdays, smelling the “new album” smell the first time you cracked the case open, reading the lyrics and viewing the artwork as the album got broken in on my stereo. I’ll talk a bit about that in WWTV 005. Apple is currently trying to figure out a way to bring back some of that nostalgia with Cocktail, which they should be all set to announce in a few weeks now.

Don’t abandon the CD just yet, it’s still the primary means of music consumption and you need to have your music available in the format people want it in.

images: Philip Elmer-DeWitt
source: NPD Group

Is It U2, Or Just The Economy?

admin — Thu, 12 Mar 2009 22:59:34 +0000

It’s no surprise that U2′s new album, No Line On The Horizon rocketed to number one after its first week on store shelves, selling 484,000 copies. That means that No Line is U2′s second-strongest U.S. debut, falling behind How To Dismantle An Atomic Bomb, which sold 840,000 copies in its first week. To keep it in perspective, All That You Can’t Leave Behind, which I thought was a far superior album than How To Dismantle An Atomic Bomb (so much so that they still play Beautiful Day when promoting their current album), sold about 428,000 copies during it’s first week out back in 2000.

With all that taken into account, think back to one of 2008′s most celebrated albums, Coldplay’s Viva La Vida, which sold a staggering 721,207 copies its first week on the market last June. So why did the undisputed biggest band in the world, U2, fall so far behind their chums from across the pond? Some might blame the economy, as entertainment is easily the first thing cut from budgets in hard times and we’ve seen the sharpest edge of the recession thus far between the two album’s releases. Others would blame UMG’s Austrailian division for leaking U2′s album early, causing a flurry of U2 fans to rush to their nearest torrent host to get a sneak peak. Many would cite that CD sales have been on the decline with each passing year, so a the biggest album of 2009 will undoubtedly sell less than the biggest album of 2008.

Could it be simply be that Coldplay has usurped U2 as the biggest band in the world? Are album sales a fair indicator as to a band’s complete success, or is there something unspoken that makes the great bands great? As far as media presence and legacy, the clear answer would be that U2 has maintained their throne. We didn’t see Coldplay on Letterman for a week straight, playing a live concert on GMA, or even shifting people’s faith to the degree that Bono does. All Coldplay had was a little iTunes commercial and a slew of controversy over their hit single, but that seemed to be enough to yield nearly 300,000 more album sales. Maybe it’s Apple. Let’s not forget that the biggest selling album by U2 in their first week, How To Dismantle An Atomic Bomb, was featured in a similar iTunes commercial to Coldplay’s Viva La Vida, and released along with a custom U2 iPod and the like. This album had a lot of other hype, but no iTunes commercial. Obviously, that could be nothing more than a coincidence, but it does beg the question as to what type of media saturation is most effective.

So what gives? What makes a great band, is it album sales, ticket sales, social significance?

Your turn:

The Presidents of the United States of America Unleash Multiple-Album iPhone App

admin — Fri, 20 Feb 2009 01:29:58 +0000

I found this over at wired.com and thought it was pretty interesting.

Remember that song Peaches from way back when? What about Lump, or my personal favorite, Dune Buggy? I can recall my Jr. High P.E. class having the Presidents of the United States of America album on heavy rotation while we stair-stepped our way to being fit.

Now Prez’s frontman Dave Dederer is a VP at Melodeo, the makers of nuTsie, a software app that lets you stream iTunes playlists onto your PC, mobile device or facebook profile. Melodeo has now released a $3 app for the iPhone and iPod touch that lets you stream 4 Presidents of the United States of America albums, the 4 that the Prez own the rights to for themselves. The application also includes rare and exclusive material that the band can update from their end, and your phone will automatically pick up.

This presents an interesting marketing strategy, as it filters money directly to the band from the app, but undoubtedly detracts from album sales on iTunes or other MP3 retailers. Why spend $40 on 4 albums when you could stream all of them for just $3? While you do have to be connected to the internet to hear the albums, unlike if you owned the mp3s themselves, with 3G ever-expanding, I don’t see that being too much of a problem; especially with the added incentive of exclusive content that the band could update at any point in the future. We’ve already seen Pandora take off with music streaming, so clearly listeners don’t mind needing to connect to the net to listen to their music for the most part.

I think that as more bands implement apps like this, it presents a great opportunity to heighten the level of connection between the fans and the band. Imagine a band that uploads tracks of their weekly rehearsals, quick audio notes to fans or other things of the like to purchasers of their iPhone app. The band makes a little extra money from the app, the fan gets to name-drop a bit more about some exclusive content, everybody wins… except iTunes who would only get a small cut of the app price rather than a big cut of the $10 album price.

I could even see record labels starting apps and piping new artists to fans to rate, so that they could better judge who was catching on.

How can you harness the expansion of net availability to promote your band?

Sony Music Woes Extend To Digital Sales

admin — Thu, 12 Feb 2009 01:38:54 +0000

The struggling music units of Sony Corp. and Bertelsmann AG merged in 2004 so that a combined company could better fend off illegal file sharing and shrinking CD sales.

The new recording company, named Sony BMG, was expected to wield the kind of resources that could challenge Universal Music Group as the largest of the four top labels. Sony BMG would own a chunk of U.S. music sales almost as big as Universal’s.

To say the deal failed to deliver on the promise is probably an understatement. More than four years after the merger, there isn’t a more troubled major label around.

Read the full story.

Equal Vision Records Tries New Means Of Album Sales

admin — Sat, 24 Jan 2009 02:51:54 +0000

Would you pay a couple hundred dollars for every CD and DVD a label is going to release this coming year, sight unseen?

Indie label Equal Vision Records is asking fans to do just that. With the launch of EVR365, fans can select from 3 packages allowing them to get prereleased copies of EVR albums through the whole year. They throw in some other schwag like t-shirts and such too, to add incentive. The packages are priced between $60 and $200. At the $60 price point, the purchaser gets a digital download of every EVR album released, and to be released, in 2009. Future albums will be given to EVR365 members one week before the street release. The deluxe package sells for $200 and includes an EVR T-shirt, a signed copy of every CD and DVD for 2009 plus the corresponding pre-order shirt, and free shipping after the first order sends out.

I applaud Equal Vision for considering a new means of album sales, but I’m not sure this one will fly. I don’t know that I spent $200 on any single label’s releases last year, much less a smaller indie label like EVR. Who this will appeal to is the younger scenester crowd who would buy every EVR release anyway, and is anxious to gain bragging rights for getting albums early, and having them all signed.

The cool thing about this, from the label’s end, is it essentially lets them raise revenue to fund future product. If they’re making a ton of money on it, they know ahead of time that they can splurge on a particular album or two. If it tanks, then they know to return to the usual mode of operation. It takes some of the risk out of the risky business of record labels since you have some sort of idea as to your take before you go forking out the money to make the albums. Well played EVR, and kudos for breaking out of the norm to try and find new means of sales in this tough climate.

You can see the details of EVR365 here.

Music: “The Hottest Currency Of The Digital Age”

admin — Tue, 20 Jan 2009 22:40:04 +0000

Hot off the heels of yesterday’s news that the RIAA cannot base penalties on the cost of copywritten property itself, the net is buzzing with talk on the state of the music industry and how to make money in it during these tough times. Labels are looking for new and better ways to make money besides simply selling music itself.

Howie Singer from Warner Music said his company wanted to see “compensation and not simply control”.

“It’s interesting to be in a business where there’s no issue about creating demand for your product,” he said. “The issue is finding a way to get paid for it.”

What Singer is saying is that they have no problem selling people on the value of music. People want music so badly that they steal it. The problem is, WMG is sitting on the hottest currency of the digital age, and can’t figure out a way to exchange that currency for cash. Music will always be in high demand, but the whole “supply and demand dictate price” model doesn’t really apply with digital content. When you have to compete with “free,” it’s tough to sell your product.

I found this article on BBC this morning, check it out here. There’s not a lot of new or ground breaking info in the first 80% of that read. Towards the end, the author lists out various methods that artists have tried in order to make money these days. I thought some of them sounded pretty innovative, and could be useful for you to consider.

Read it.

Do you have any new ideas on how artists can turn a profit with their content these days?

Judge: Illegal Downloads Don’t Equate To Lost Sales

admin — Tue, 20 Jan 2009 03:42:39 +0000

US District Judge James P. Jones has ruled that copyright holders cannot equate each illegal download with a lost sale. Just because somebody downloaded your song, doesn’t mean that they would have purchased it otherwise. Practically what that means is that you cannot seek restitution based on the amount that hypothetically would have been gained if the person would have purchased your song through legal channels.

Via ArsTechnica:

Record companies cannot collect restitution for every time a song has been illegally downloaded, a US District judge has decided. Judge James P. Jones gave his opinion on United States of America v. Dove, a criminal copyright case, ruling that each illegal download does not necessarily equate to a lost sale, and that the companies affected by P2P piracy cannot make their restitution claims based on this assumption.

I’m not sure how much I like this ruling. While I can see the point that the judge is making, the essential argument on the part of the defendant is, “Well, I wouldn’t have downloaded the song if I couldn’t steal it.” That’s the equivalent of me stealing a Ferrari from the local dealer and my defense being, “Well, sir, I definitely wouldn’t ever have bought that car, so I stole it. Therefore, I can’t be forced to pay the dealer for how much the car is worth.” Seriously?!

“Those who download movies and music for free would not necessarily purchase those movies and music at the full purchase price,” Jones wrote. “[A]lthough it is true that someone who copies a digital version of a sound recording has little incentive to purchase the recording through legitimate means, it does not necessarily follow that the downloader would have made a legitimate purchase if the recording had not been available for free.”

So now it’s the copyright holder’s fault for not making their content avialable for free? Take that back to my Ferrari analogy, “Well, sir, I wouldn’t have stolen the car if they would have just given me the pink slip for free.” That makes no sense.

I should point out that this does not absolve defendants of criminal charges, but severely limits the restitution that copyright hodlers can seek. Civil suits can ask for monetary damages based on some other scale, but it appears that copyright holders will not be able to calculate that value based on the price of their content. How then should they determine what they’re owed? I don’t want to see people steal songs, but I don’t want to see copyright holders abuse this ruling the other way either, and start collecting thousands of dollars per song shared instead of the actual value they would have charged for the song. Make sense?

read the full article here

Virgin Mega Store Times Square Closing

admin — Fri, 16 Jan 2009 05:50:48 +0000

IMAGE: Declan McCullagh PhotographyI was just in LA last night for the live Diggnation and Digg meetup. My wife and I left The Knitting Factory around 10 PM or so and proceeded to stroll around downtown looking for a good place to grab a bite. It was pretty dead out. Baristas were stacking chairs on tables and pulling the patio furniture in for the night. Then we walked by the Virgin Megastore, doors open, music playing. They would have the lights on until midnight. I thought to myself, Man, that is such a staple of the big city. The Virgin Megastore being the last one standing on a late night out. We were just in New York this past May and saw the same thing, a line of Clay Aiken fans hanging around the Times Square store at midnight, waiting for the release of his new album the next morning.

Well as it turns out, that very store will be closing its doors for good this upcoming April. Not because of the sagging economy; not because of the incredible overhead for a 180,000 square foot Times Square lot; not because of iTunes and digital music sales pushing CDs into obsolescence. The number one music store in the country, moving $55 million of goods each year, will be closing its doors because it can make more money renting the space out.

Virgin pays only $54/square-foot for the Times Square landmark, and current market value for retail space in the area is at $700/square-foot. While the store generates $6 million in profit per year, Vornado (the real estate company that acquired Virgin Entertainment Group North America) expects to earn much more than that by leasing the space to other retailers. That cuts the total number of Virgin Megastores to 5, making the 14th street store in Union Square the premier Virgin Megastore in New York. Even the future of that store is in question, as they leased the ground floor to Nordstrom Rack this past holiday season; yes, during the holiday season which is supposed to be prime time for retailers. If they can afford to lease out prime space to other retail outlets during shopping high times, I can’t imagine it bodes well for them in low times, which are certain to be just around the bend.

As much as they might pin this on making strict business sense from a real estate perspective, you have to assume that the decline of CD sales played into it at least a bit. Brick and mortar music stores have become more of a novelty than a wise business venture. If the number one CD retailer in the US has better things to do with its time and space, expect to see other music shops go down soon.

2008 Music Sales Not As Drowsy As Previously Feared

admin — Sat, 03 Jan 2009 03:00:00 +0000

Nielsen just released the numbers for 2008 recorded music sales a few days ago, and there’s a few of noteworthy points. Many feared that the increased use of P2P networks would cripple music purchases, but through many mediums, there was actually growth from 2007.

Overall music sales ROSE over 10%. That includes albums, singles, music videos, digital tracks, etc. with 1,513,000,000 units sold. This was the big relief, as it shows signs of life in an industry feared to be treading water at best.
Total album sales DROPPED 14%. That includes CDs, LPs, digital albums, etc. Internet album sales, being physical albums purchased through online retailers, declined by close to 9%, which I’m sure contributed to that 14% overall drop. Digital album sales, being non-physical albums downloaded from various online retailers, ROSE 32%. Even with that sharp increase in digital album sales, it wasn’t enough to curb the loss from physical album sales online or in brick and mortar shops.
Vinyl is back! The number of vinyl units sold rose by close to 90% over 2007 figures.
Digital track sales rose close to 30% between 2007 and 2008.

So what do these numbers point to?

Not surprisingly, digital music is on the rise. I wouldn’t be so quick to say that the increase in digital music sales means P2P is on the way out though. There are no numbers from Nielsen on how many songs were shared via P2P networks, so there’s no baseline to compare the shift in market share between online retailers and P2P networks. To say that these numbers point to a decline in P2P usage would be assuming that the same amount of music sold in 2007 was going to be sold in 2008, and because more music was sold through legitimate online retailers in 2008, less tracks were shared on P2P networks. The problem is, we have no idea as to the total volume of music moved through the year, through both sharing and purchasing. If that number was up anything over 10.5% (the total growth in legitimate music sales) then the difference is being shared on P2P networks. I’m betting that overall music consumption was up significantly, meaning that the legitimate music markets are not actually seeing their fair share of growth in the big picture.

Another trend I forsee is that artists will begin to abandon the notion of a complete album. Album sales dropped by 14% last year, while digital track sales rose by 27%. Ever since there has been the option to forego the whole album to only buy the songs you like, artists have had to create incentives to try and sell full albums. You’ll get 2 bonus tracks, or a download of some free video content, or access to a new area of their website, etc. Sooner or later, artists are going to get tired of all that extra effort, and just release the songs that have promise of becoming hit singles. I think that’s tragic, but I’m waiting to see it happen in 2009. We’ve already seen lots of artists not putting out LPs, and only releasing a myriad EPs for quick sales of a few songs here and there. The positive aspect could be that some artists will be pushed to cut the filler tracks and create more solid complete albums in an effort to sell full albums rather than particular songs.

For more details, including top selling songs and albums of the year, you can read the full Nielsen report here.