Interesting music industry article from the NY times.

Jason Schofield · Posted 2 Aug 2009 12:34 pm

Swan Songs?
By CHARLES M. BLOW
Published: July 31, 2009

The music industry’s deathwatch kicked off about a decade ago, but it seems the vigil could soon be over.According to data from the Recording Industry Association of America, since music sales peaked in 1999, the value of those sales, after adjusting for inflation, has dropped by more than half. At that rate, the industry could be decimated before Madonna’s 60th birthday.

The speed at which this industry is coming undone is utterly breathtaking.

First, piracy punched a big hole in it. Now music streaming — music available on demand over the Internet, free and legal — is poised to seal the deal.

The problem is that if people can get the music they want for free, why would they ever buy it, or even steal it? They won’t. According to a March study by the NPD Group, a market research group for the entertainment industry, 13- to 17-year-olds “acquired 19 percent less music in 2008 than they did in 2007.” CD sales among these teenagers were down 26 percent and digital purchases were down 13 percent.

And a survey of British music fans, conducted by the Leading Question/Music Ally and released last month, found that the percentage of 14- to 18-year-olds who regularly share files dropped by nearly a third from December 2007 to January 2009. On the other hand, two-thirds of those teens now listen to streaming music “regularly” and nearly a third listen to it every day.

This is part of a much broader shift in media consumption by young people. They’re moving from an acquisition model to an access model.

Even if they choose to buy the music, the industry has handicapped its ability to capitalize on that purchase by allowing all songs to be bought individually, apart from their albums. This once seemed like a blessing. Now it looks more like a curse.

In previous forms, you had to take the bad with the good. You may have only wanted two or three songs, but you had to buy the whole 8-track, cassette or CD to get them. So in a sense, these bad songs help finance the good ones. The resulting revenue provided a cushion for the artists and record companies to take chances and make mistakes. Single song downloads helped to kill that.

A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs.

So it was no surprise that The Financial Times reported on Monday that Apple is working with the four largest labels to seduce people into buying more digital albums. It’s too little too late.

(Note: I wrote this column while listening to “The Miseducation of Lauryn Hill,” the last truly great CD I ever bought. Every track is a gem. When did I buy it? 1999.)

http://www.nytimes.com/2009/08/01/opinion/01blow.html?th&emc=th

Bob Bowden · From: Vancouver, BC, Canada * R.I.P.

There is one point that all of these studies miss. The big record companies are not putting out much, if any, product that is worth buying. Where are the great rock songs of the 2000s? What about country tunes??? All we are getting is an overload of marketing machine pop drivel.

Personally, I stopped buying long before "free" downloads were common practice. Why? There just wasn't anything worth buying.

Just look at how touring vs. albums has changed in the last ten or so years. The old way was to tour to support an album. Now the band puts out an album to create interest in the tour and makes their money off the road sales.

Mat Rhodes · From: Lexington, KY, USA

Bob, I think the shift that you're describing may eventually lead to the enhancement of one of two business paradigms for bands and artists:

1) They can make the live performances so not-worth-missing and audience-interactive that the emphasis on the "show" is equal (if not more so) to the quality and content of the music. I'm thinking dinner theater, murder mystery theater, drama, etc.

2) They can give more incentives to buy merchandise with a connection to the music. Sort of like glorified jingle-writing. If you write a song about "Jungle Lovin'" then your fans/subscribers get 15% off "Jungle Lovin'" perfume at all participating Wal-Mart stores.

Yeah, it sounds pretty silly and I'd rather see Scenario #1 play out. But these days, you never know. Either way, I think audiences will eventually demand and expect more tangibles. Music for music's sake is no longer a tangible.

Steinar Gregertsen · From: Arendal, Norway, R.I.P.

CD Baby, the major outlet for independent music on the web, are reporting rising sales. So there may well be a case of under reporting of the direct 'artist-to-customer' sales as well as other 'underground' sales.

I firmly believe that those who truly enjoy and care about music will keep buying music in one form or another, while those who are only looking for the latest hits and a non-challenging soundtrack for their everyday lives may stop buying.
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Jason Schofield · Posted 2 Aug 2009 3:44 pm

This is the part that really got me.
of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs.

Years ago I used to have stack of book on how to make it in the music biz. They used to say that less than 10% of all the albums made brought in a profit. The Jacksons' Madonnas' and Springsteens' were paying for the other 90% failures. Really opened my eyes.

AJ Azure · From: Massachusetts, USA * R.I.P.

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