I originally posted this on thepunch.com.au but am replicating it here for non-AU readers.
“There is nothing wrong with the music business, there is a problem with the CD business.” - Chuck D
If you reduced the last decade’s discussion about the music industry to a single word, it would be decline.
And yet, observing music consumption over the same period, the opposite is true. More people are listening to music in more ways than ever before.
On planes, in trains, in movies, on ads, at the gym, on the computer, at the desk, on the way to work, in the car, waking up, falling asleep, getting married, breaking up, doing housework, in the shower, in restaurants, cafes and bars and every second in between, music is present.
In last year’s MTV Music Matters survey of people aged 15-34, the percentage of people who claimed they liked music rose from 67% in 2007 to 85% in 2008.
Along the same lines, Bauer Media, the company behind Q and Mojo, released findings from a five-year study of music consumers.
The study found that 44% of respondents consumed more music in 2008 than in 2007 and in terms of favourite interests, music ranked higher than any other pastime including films, shopping, sport and fashion.
We Like Music.
Perhaps it’s time to put the discussion about music into a new context.
The musical doom and gloomers have one major source of ammunition: falling CD sales. They’ve been in decline since in 2000, the same year N’Sync sold 2.41 million copies of ‘No Strings Attached’ in the US alone.
But in a world of kaleidoscopic music consumption, are CD sales still the most accurate gauge of the music industry’s health?
When you look beyond CD sales, you find that the total number of all units of music sold (that is, CD, digital, LPs and ringtones) grew by 10.5 percent in the US in 2008.
The biggest area of growth was digital downloads but there was growth in other areas. Vinyl sales increased by a staggering 89%.
Vinyl sounds.
Elsewhere over the last few years, tens of millions of iPods have been bought and (at least partially) filled, Guitar Hero has sold a billions copies and a billion plastic guitars and streaming through sites like MySpace, Last.FM, YouTube and Pandora has become a daily destination for a new generation of music lovers.
Silvio Pietroluongo, director of charts for US-based Billboard magazine, sums up the situation neatly: “Music consumption has never been at a higher clip, it’s just a matter of trying to turn it into revenue.”
On the revenue front, the revenue issue is an ongoing one. Major labels in particular are rushing to reorganise their business models to mirror the consumption habits of a society that can effectively access whatever music they like, whenever they like, for free.
But major labels aren’t suffering through a lack of smarts or will or talent. Music industry people know what needs to be done and how things need to change, but you can’t implement that kind of shift within a multi-billion dollar industry still overly reliant on CD sales and subject to the demands of retailers, publishers, rights-holders, copyright lawyers, media-buyers, managers and most critically – artists.
That easy.
So long as the focus is on that chapter of the music story, the bigger picture is going to be ignored.
If the music industry’s health was measured by total music consumption then it’s never been in better shape.
When the business models evolve and the music industry’s challenges are overcome, there are entire nations of music consumers hungrier than ever for the next song to change their lives.
It’d be nice if we could spent a little more time talking about that, and a little less counting plastic CDs.
For CDs and soup.
After I posted this, I received a number of emails which really added a lot to the piece. You can see some of them in the comments section on The Punch but I will reprint the best of the email comments below.”Yeah I think that’s all true and becomes even more so when the constant growth in live revenue is added to the mix … there was a thriving “music biz” long before they invented sound recordings which could be played in the home and that will continue to remain the case although along the way many people will make and lose fortunes and careers will be propelled and sunk by the changes too.
As I keep saying, the real immediate challenge that’s rarely addressed is filling the marketing and promo gap left by shrinking labels.
Given that the conventional wisdom says labels always sucked at that it seems like it wouldn’t be such a big deal. However, in reality the whole mainstream business was nearly always a cart dragged around by the - admittedly flawed and dysfunctional - promo and marketing machines of majors. Whether you were a manager, artist, promoter or music media it was very rare for you to enjoy success without first making it to the top of a label’s priority list.
In the absence of that you’ve got a lot of people scrambling around trying to work out how to get mass attention in this fragmented media environment and most are doing a very poor job at it because it’s never been their main gig. Nobody wants to admit to it but I really think it’s fundamental to why we’re just not seeing more big musical moments out there right now.
In other words, how do you create a new Big Day Out headliner these days without that big promo and marketing push from the label? Obviously online action can spread the word but it’s still more diffuse than mass media and it doesn’t reach everyone so it’s only part of the answer … and quite a time consuming one at that.
Maybe it’s just as simple as saying it’s not about BDO anymore … it’s about creating 10 Laneway headliners … but that’s a pretty radical cultural and business transformation and runs totally contrary to all that research about the Long Tail being bullshit (80% of iTunes sales from 1% of releases was a stat I read the other day along with something like 70% of titles never getting even one sale).”
- Artist and Label Manager
“The key point that you make concerning music consumption is well understood. This is an important indicator of the “health” of the business. Bit, as we discussed in Melbourne it ignores things such as investment in new artists and recordings and maybe the total income being generated by artists. My concern is that traditionally the major investors were those companies that made their $s from selling CDs and as a result of the trends, their investment level is way down (probably more than 50% this decade). This is not really being replaced…….so until there is an efficient mechanism to do this artist development and the health of the industry remains at risk.”
- Ex Worldwide EO of a major label
As you touch on, we can change things but other more regrmented systems are in place outside of our control that are in the way. Retail particularly but for me, doing promo. We’d be away laughing if only media were completely up to speed and still not insisting on CDs. I understand radio still at this stage, as not all stations can afford big digital libraries. But print media who say they can’t review unless they have it in front of them is hard, plus the magazines that pay reviewers with the CD itself. That all needs to be let go of too to move on. The sooner the CD is forgotten.
- Indie Label Promo and Marketing Manager
I think the article is great and a refreshing perspective. Of course we are pushing the view that it is not ‘doom and gloom’…there are great challenges and corresponding opportunities. One point that is important is that we don’t want to lose the recognition and value of the music creator. Yes, let’s stop focusing on the plastic….let’s focus on the songwriter/artist. What are the business models that enable the legitimate delivery of or access to music and at the same time provide a revenue stream to music creators? I think the winning commercial point of difference will be the business models that can exploit the fact that they are closely connected to music creators. This is what we all want as music fans…to be closer to our favourite artist. People have allegiance for songwriters/artists….but not faceless companies.
- Rights Body Staff Member
I largely agree, music consumption has increased dramatically in recent times, and continues to remain strong, the real challenge as the article points out is finding sustainable ways to build revenue in what has become a very fragmented distribution and marketing landscape. I think we’ll look back on this time as a period of great transition and challenge but also probably lament for how exciting things are at the moment in terms of opportunity and innovation.
Re: But major labels aren’t suffering through a lack of smarts or will or talent. Music industry people know what needs to be done and how things need to change, but you can’t implement that kind of shift within a multi-billion dollar industry still overly reliant on CD sales and subject to the demands of retailers, publishers, rights-holders, copyright lawyers, media-buyers, managers and most critically - artists.
They need to continue to evolve more rapidly than they have, it’s not easy but the market is unforgiving. I see a lot of headway but then again I see some really unintelligent narrow-mindedness as well, not just from the labels but from the industry at large.
Anyway, it’s not just music, other content makers as well are faced with a similar challenge - journalists, media, artists in general, etc
- Marketing Manager at Social Networking Platform
The interesting side point is whether declining revenue has any impact on the quality of the product that is produced. That has always been the defence for IP protection for music - I’ve often wondered how it plays out in practice in the Arts.
- Lawyer
