the week the music (biz ) died

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ethan smith's recent report in the wall street journal, titled SALES OF MUSIC LONG IN DECLINE PLUNGE SHARPLY, documents the worst week yet in the slow painful and largely self-inflicted death of big music.

m coleman, Sunday, 25 March 2007 16:12 (thirteen years ago) link

In a dramatic acceleration of the seven-year sales decline that has battered the music industry, compact-disc sales for the first three months of this year plunged 20% from a year earlier, the latest sign of the seismic shift in the way consumers acquire music.

The sharp slide in sales of CDs, which still account for more than 85% of music sold, has far eclipsed the growth in sales of digital downloads, which were supposed to have been the industry's salvation.


The slide stems from the confluence of long-simmering factors that are now feeding off each other, including the demise of specialty music retailers like longtime music mecca Tower Records. About 800 music stores, including Tower's 89 locations, closed in 2006 alone.

Apple Inc.'s sale of around 100 million iPods shows that music remains a powerful force in the lives of consumers. But because of the Internet, those consumers have more ways to obtain music now than they did a decade ago, when walking into a store and buying it was the only option.

Today, popular songs and albums -- and countless lesser-known works -- can be easily found online, in either legal or pirated forms. While the music industry hopes that those songs will be purchased through legal services like Apple's iTunes Store, consumers can often listen to them on MySpace pages or download them free from other sources, such as so-called MP3 blogs.

Jeff Rabhan, who manages artists and music producers including Jermaine Dupri, Kelis and Elliott Yamin, says CDs have become little more than advertisements for more-lucrative goods like concert tickets and T-shirts. "Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream," says Mr. Rabhan. "It's the vehicle that drives the tour, the merchandise, building the brand, and that's it. There's no money."

The music industry has found itself almost powerless in the face of this shift. Its struggles are hardly unique in the media world. The film, TV and publishing industries are also finding it hard to adapt to the digital age. Though consumers are exposed to more media in more ways than ever before, the challenge for media companies is finding a way to make money from all that exposure. Newspaper publishers, for example, are finding that their Internet advertising isn't growing fast enough to replace the loss of traditional print ads.

In recent weeks, the music industry has posted some of the weakest sales it has ever recorded. This year has already seen the two lowest-selling No. 1 albums since Nielsen SoundScan, which tracks music sales, was launched in 1991.

One week, "American Idol" runner-up Chris Daughtry's rock band sold just 65,000 copies of its chart-topping album; another week, the "Dreamgirls" movie soundtrack sold a mere 60,000. As recently as 2005, there were many weeks when such tallies wouldn't have been enough to crack the top 30 sellers. In prior years, it wasn't uncommon for a No. 1 record to sell 500,000 or 600,000 copies a week.

In general, even today's big titles are stalling out far earlier than they did a few years ago.

The music industry has been banking on the rise of digital music to compensate for inevitable drops in sales of CDs. Apple's 2003 launch of its iTunes Store was greeted as a new day in music retailing, one that would allow fans to conveniently and quickly snap up large amounts of music from limitless virtual shelves.

It hasn't worked out that way -- at least so far. Digital sales of individual songs this year have risen 54% from a year earlier to 173.4 million, according to Nielsen SoundScan. But that's nowhere near enough to offset the 20% decline from a year ago in CD sales to 81.5 million units. Overall, sales of all music -- digital and physical -- are down 10% this year. And even including sales of ringtones, subscription services and other "ancillary" goods, sales are still down 9%, according to one estimate; some recording executives have privately questioned that figure, which was included in a recent report by Pali Research.

Meanwhile, one billion songs a month are traded on illegal file-sharing networks, according to BigChampagne LLC.

Adding to the music industry's misery, CD prices have fallen amid pressure for cheaper prices from big-box retailers like Wal-Mart and others. That pressure is feeding through to record labels' bottom lines. As the market has deteriorated, Warner Music Group Corp., which reported a 74% drop in profits for the fourth quarter of 2006, is expected to report little relief in the first quarter of this year.

Looking at unit sales alone "flatters the situation," says Simon Wright, chief executive of Virgin Entertainment Group International, which runs 14 Virgin Megastores locations in North America and 250 world-wide. "In value terms, the market's down 25%, probably." Virgin's music sales have increased slightly this year, he says, thanks to the demise of chief competitor Tower, and to a mix of fashion and "lifestyle" products designed to attract customers.

Perhaps the biggest factor in the latest chapter of the music industry's struggle is the shakeout among music retailers. As recently as a decade ago, specialty stores like Tower Records were must-shop destinations for fans looking for both big hits and older catalog titles. But retailers like Wal-Mart Stores Inc. and Best Buy Co. took away the hits business by undercutting the chains on price. Today such megaretailers represent about 65% of the retail market, up from 20% a decade ago, music-distribution executives estimate. And digital-music piracy, which has been rife since the rise of the original Napster file-sharing service, has allowed many would-be music buyers to fill their CD racks or digital-music players without ever venturing into a store.

Late last year, Tower Records closed its doors, after filing for bankruptcy-court protection in August. Earlier in 2006, following a bankruptcy filing, Musicland Holding Corp., which owned the Sam Goody chain, closed 500 of its 900 locations. And recently, Trans World Entertainment Corp., which operates the FYE and Coconuts chains, among others, began closing 134 of its 1,087 locations.

But even at the outlets that are still open, business has suffered. Executives at Trans World, based in Albany, N.Y., told analysts earlier this month that sales of music at its stores declined 14% in the last quarter of 2006. For the year, music represented just 44% of the company's sales, down from 54% in 2005. For the final quarter of the year, music represented just 38% of its sales.

Joe Nardone Jr., who owns the independent 10-store Gallery of Sound chain in Pennsylvania, says he is trying to make up for declining sales of new music by emphasizing used CDs, which he calls "a more consistent business." For now, though, he says used discs represent less than 10% of his business -- not nearly enough to offset the declines.

Retailers and others say record labels have failed to deliver big sellers. And even the hits aren't what they used to be. Norah Jones's "Not Too Late" has sold just shy of 1.1 million copies since it was released six weeks ago. Her previous album, "Feels Like Home," sold more than 2.2. million copies in the same period after its 2004 release.

"Even when you have a good release like Norah Jones, maybe the environment is so bad you can't turn it around," says Richard Greenfield, an analyst at Pali Research.

Meanwhile, with music sales sliding for the first time even at some big-box chains, Best Buy has been quietly reducing the floor space it dedicates to music, according to music-distribution executives.

Whether Wal-Mart and others will follow suit isn't clear, but if they do it could spell more trouble for the record companies. The big-box chains already stocked far fewer titles than did the fading specialty retailers. As a result, it is harder for consumers to find and purchase older titles in stores.

m coleman, Sunday, 25 March 2007 16:14 (thirteen years ago) link

DISCUS

m coleman, Sunday, 25 March 2007 16:14 (thirteen years ago) link

Also produced this interesting followup via the Economist. To quote a passage I don't agree with much but still raises some good points:

So the question is, if the trend continues, do we say farewell to the recording industry? iTunes sales are not, and may never be, enough to support a large recording business. What would the world look like without the major labels?

I think it's safe to say that there would be less music available overall. Many people are arguing that bands could simply use albums as loss leaders for concerts. This seems unlikely to me. Live music and CD's are not actually very good substitutes for each other. Real fanatics may use all the money that they save on recorded music to bid up the cost of live performances instead. But most people will probably spread the savings over their entire budget, meaning only a very modest boost for live performance earnings.

But won't they want to attend more concerts as they discover more great bands? I'm not so sure. It seems to me that the main constraints on performances are not the supply of good musicians to listen to, but the supply of time. People only have so many nights to go out a week, and unless they're music appreciating machines, they would like to spend some of those nights talking to friends over dinner, bowling, or drinking themselves into a coma at someone's house.

Probably downloading will modestly increase the amount of concert attendance and the price people are willing to pay for them, but I can't see it doing so by anything but a small fraction of the revenue stream being lost from selling recorded music. With the price of music falling dramatically, that seems to predict that the supply of good music will fall. The quantity of all music may well rise, as the internet causes the cost of distribution to plummet, and everyone with a garage band uploads their stuff. But looking back to my own college band, I'm not sure that this is a net boon to humanity. Meanwhile, professional artists have to eat. If you reduce the size of the revenue streams available to fund their music-making, some of them will have to spend less time making music, and more time making money some other way.


I find the way of quantifying the amount of 'good music' pretty ridiculous, of course, but the final sentences are something I've heard from a couple of other people as well who have no love for the RIAA vision of the universe.

Ned Raggett, Sunday, 25 March 2007 16:16 (thirteen years ago) link

(The point about free time is also pretty key -- a 'well, duh' moment, to be sure, but still spot on.)

Ned Raggett, Sunday, 25 March 2007 16:18 (thirteen years ago) link

Many people are arguing that bands could simply use albums as loss leaders for concerts

isn't this happening already to a large extent?

im kinda confused by that last paragraph. my understanding is most major label bands/singers don't make a lot of income from recordings, or more precisely they run through their advances and wind up in debt.

I don't think the major labels will disappear but will continue to trim any "midlist" artists in favor of superstar product, a trend that's been going on for ten years or more. on the concert issue, a music manager I know w/some bigname clients has been complaining about how the rec co's are now trying to get a piece of touring and merchandising to offset the loss of income from recordings.

m coleman, Sunday, 25 March 2007 16:26 (thirteen years ago) link

and norah jones...

scott seward, Sunday, 25 March 2007 16:31 (thirteen years ago) link

The music industry has yet to address the internet in any real systematic way. The major labels and retailers need to look at the reality of the situation. The internet isn't going away. Illegal downloads will not simply vanish with a few people getting punished.

I really think the whole problem is the fact that the leadership of these labels and retailers aren't really trying to come up with new ideas. Rather, they are just sitting around and pointing fingers at downloading sites expecting someone to something about them.

MaGoGo, Sunday, 25 March 2007 16:36 (thirteen years ago) link

I recently read Fred Goodman's Mansion on the Hill, on the birth of the big-money music business. The book does a nice job of explaining how the birth happened, in the first half of the 1970s. It had its roots in the commercialization of counterculture, for which music had been a big part of the zeitgeist. And this was a commercialization of the album, which meant big payouts for all involved in big records. Goodman portrays the artists (particularly, Springsteen and Neil Young, but the MC5 also) as, well, dupes in the process. But I thought upon finishing the book that it was odd how there aren't just two or three countercultures today like there were in the 1960s (in the US: thinking of civil rights movement, NYC bohemians, and the anti-war movement), but many many more. And so music, if it is to play any role in a countercultural zeitgeist today, won't be commodidizable in the way it was in the 1970s. As a result, it strikes me as natural that the music business as it has been since the 1970s is in decline (in the US, I won't speak for overseas). I think it has less to do with piracy and more to do with the fragmentation of our culture. A certain type of music once played a big part in a big fragment of our culture, and it was thought that the album was important for that type of music. With that fragment now shattered and a thousand fragments replacing it, for which the album isn't as big a deal, what we're seeing is totally expected.

I agree that a net result will be that more artists will have to support themselves outside of making music.

Euler, Sunday, 25 March 2007 16:38 (thirteen years ago) link

it'll be interesting to see what Radiohead does when they make a new album -- they let their major-label contract lapse, and I'd predict a one-off distribution deal w/another major on v. favorable to artist terms.

a few notches down the food chain, Sonic Youth's longterm contract w/Interscope ended w/ Rather Ripped. Obv they're experienced at self-sufficiency but also slightly dependent on the big label deal providing a base for their various side-trips/art projects. lots of bands will look to these 2's next moves.

m coleman, Sunday, 25 March 2007 16:38 (thirteen years ago) link

radiohead should just sell their own damn record. they'd be stupid not too.

scott seward, Sunday, 25 March 2007 16:42 (thirteen years ago) link

arcade fire owns all their own stuff, right? canadians are smart.

scott seward, Sunday, 25 March 2007 16:44 (thirteen years ago) link

studies into illegal downloading's effect on the biz say it doesn't affect sales very much, certainly not enough to cause the slump

abanana, Sunday, 25 March 2007 16:46 (thirteen years ago) link

MaGoGo OTM X10,000

people have complained about fragmentation in popular music since the late 70s/early 80s though I guess it seems more extreme now that rock no longer dominates the top ten. I liked Mansion On The Hill a lot though I do think Fred romanticized the 60s scene a wee bit. Wish he'd do a digital-era follow-up.

m coleman, Sunday, 25 March 2007 16:46 (thirteen years ago) link

xpost there was a big study done around 2004 by two economists that found sales of top 40 albums (also the most popular file-shared ) actually INCREASED where illegal downloading was heaviest -- in college towns. I wrote about this in the paperback ed of Playback but it didn't get much play elsewhere.

m coleman, Sunday, 25 March 2007 16:51 (thirteen years ago) link

But do you think there's a internet-based strategy for the music business that still involves the huge profits characteristic of the business in the past?

This, I think, is the million dollar question.

Euler, Sunday, 25 March 2007 17:03 (thirteen years ago) link

we need the medicis to come back

max, Sunday, 25 March 2007 17:18 (thirteen years ago) link

But do you think there's a internet-based strategy for the music business that still involves the huge profits characteristic of the business in the past?

You mean characteristic of the last 50 some odd years?

I really have to check my facts on this but before Elvis were there really the SUPER huge profits that we see today?

MaGoGo, Sunday, 25 March 2007 17:19 (thirteen years ago) link

euler's first post OTM.

I really think the whole problem is the fact that the leadership of these labels and retailers aren't really trying to come up with new ideas. Rather, they are just sitting around and pointing fingers at downloading sites expecting someone to something about them.

so fuck 'em! i'm not going to weep for the death of the multinational music-and-entertainment conglomerate. the only tragedy will be if artists - not major labels - can't find new ways of getting their stuff heard (or, rather, of getting it heard and making a living). and i'm pretty confident they will: smaller labels, one-off deals ... and cheaper legal downloads (the last being kinda key).

the most pressing threat to the whole making-cash-from-music model is the fact that there's a generation of kids growing up with slsk and so on who just think "WOO FREE MUSIC" ... getting them to shell out in any way, shape or form is gonna be tough. but i'll tell you what: record labels aren't ever going to persuade them.

small(ish) bands signed to big(ish) labels make, from what i understand, fuck all anyway from record sales: they just get shafted a lot. it's in their interests to move up and away. COME TOGETHER AND SMASH THE SYSTEM! BRING DOWN THE MAN! er, sorry, got a bit carried away there.

we need ILM's small but vocal band of working musicians on this thread ASAP ...

grimly fiendish, Sunday, 25 March 2007 17:24 (thirteen years ago) link

I hate to say this, but you don't have facts to the amount of records these people sold..

I don't believe in numbers...I believe in quality....

numbers are not proof of anything...

they claim that britney sold 80 million copies..and Eminen sold in the millions...

they claim these things....
that doesn't make them popular or make these claims something that is real and factual....

marissa, Sunday, 25 March 2007 17:41 (thirteen years ago) link

It's interesting that this thread's been started as my father is trying to make some paper in the music business after being chewed up and spit out by Nashville in the late 70s/early 80s. He's remastering some of his 70s material and playing a few house concerts, selling his CD's at the show.

I'd like to see the sales numbers of large independent labels since the advent of p2p, I'm guessing they've improved. I'd wager that sales of all music has remained somewhat constant, but major label sales have slumped as a percentage of that pie.

m bison, Sunday, 25 March 2007 17:41 (thirteen years ago) link

i also don't believe that these people are popular at all, and I don't believe that she is selling 1 million copies..this is propaganda....

marissa, Sunday, 25 March 2007 17:42 (thirteen years ago) link

I just don't believe that people who can't sing write of play are selling millions of records...
I don't believe their numberes..

marissa, Sunday, 25 March 2007 17:46 (thirteen years ago) link

My guess, as somebody who works in a retail music environment, is that people are spending their money on DVDs and video games, leaving them less to spend on CDs. Especially DVDs, which our customers consider fairly priced compared to CDs, which everyone thinks are a ripoff.

f. hazel, Sunday, 25 March 2007 20:11 (thirteen years ago) link

all of this, it should be pointed out, though it rarely is, has little to do with "music" or the "music industry." the current slump is affecting one particular facet of said industry, the cd manufacturing and distribution business, and, frankly, it is their problem, not ours. BMI and ASCAP (who pay lots of money to musicians) continue to brag about healthy profits. the harry fox agency (which pays musicians) is enjoying big business. investors and businessmen are tripping over themselves trying to get into the internet music business. i don't exactly hear live nation crying these days. dear RIAA and all your member labels: discuss THAT, please.

fact checking cuz, Sunday, 25 March 2007 21:19 (thirteen years ago) link

One week, "American Idol" runner-up Chris Daughtry's rock band sold just 65,000 copies of its chart-topping album; another week, the "Dreamgirls" movie soundtrack sold a mere 60,000. As recently as 2005, there were many weeks when such tallies wouldn't have been enough to crack the top 30 sellers. In prior years, it wasn't uncommon for a No. 1 record to sell 500,000 or 600,000 copies a week.

let's break that down.

One week, "American Idol" runner-up Chris Daughtry's rock band sold just 65,000 copies of its chart-topping album; another week, the "Dreamgirls" movie soundtrack sold a mere 60,000.

and yet another week, neil young's "live at massey hall," a 35-year-old recording by a weathered, old dude who hasn't had a hit in a generation, sold 56,000 copies, what does THAT mean?

In prior years, it wasn't uncommon for a No. 1 record to sell 500,000 or 600,000 copies a week.

but in how many prior years, exactly? maybe for four or five out of the last 50 years? should that really be held up a standard by which to measure an industry's health today?

fact checking cuz, Sunday, 25 March 2007 21:24 (thirteen years ago) link

I predict patronage will be the only viable means of supporting musicians in the years to come
http://www.liberliber.it/biblioteca/m/medici/immagini/ritratto.jpg

"HOORAY"



BLASTOCYST, Sunday, 25 March 2007 21:45 (thirteen years ago) link

the current slump is affecting one particular facet of said industry, the cd manufacturing and distribution business

OTM.

Why does the record industry blame the consumer for all its faults?

Discuss.

MaGoGo, Sunday, 25 March 2007 21:57 (thirteen years ago) link

Because it's easier to do that that admit they're the ones who have made mistakes.

Brigadier Lethbridge-Pfunkboy, Sunday, 25 March 2007 22:18 (thirteen years ago) link

But record labels are not merely in the "cd manufacturing and distribution business," they're in the recorded music business.

Hurting 2, Sunday, 25 March 2007 22:21 (thirteen years ago) link

Anyway, regardless of how much money artists ultimately make from CD sales, it's often the record label that gives them the advance that allows them to record and tour in the first place. That's where I see potential problems.

Fact is, it's pretty hard to get any notice without getting out there and touring, and it's pretty hard to tour extensively without money. You can't hold a normal day job to speak of, so you either have to a) have a trust fund, b) have some kind of sweet alternative job situation, or c) be young and able to live with mom or d) be willing to live in utter poverty until things pick up (which they probably never will.)

A label can give you the advance to make this possible and also the promotional muscle to make it less likely that your tours will be a wash. So without labels, I'm not sure what the workable model would be for bands to make a living, barring the incredibly savvy ones who know how to work other angles of the music business well -- and I don't think that should be a prerequisite for being a successful band.

Hurting 2, Sunday, 25 March 2007 22:29 (thirteen years ago) link

Or rather, I'm not sure what the workable model would be for most bands to make it to a place where they can make a living in the first place.

I guess one possibility is the management/promotion/booking hybrid companies that are starting to pop up - maybe these will handle advances instead of record labels.

Hurting 2, Sunday, 25 March 2007 22:30 (thirteen years ago) link

But record labels are not merely in the "cd manufacturing and distribution business," they're in the recorded music business.

i'm not sure i see the difference. they may do other stuff, sure, but it's all in the service of trying to make money in cd distribution, since that is quite literally what they DO.

most record companies also have music publishing arms. and, funnily enough, those arms are raking in the cash these days. perhaps if a company like EMI spent less time thinking about the internet seekers and the general blahs and whatever else it thinks is dragging down its record sales, and more time thinking about what whatever it is that has turned EMI publishing into a moneymaking machine at exactly the same time ... well, i'd like to hear some of that thinking.

fact checking cuz, Sunday, 25 March 2007 22:42 (thirteen years ago) link

Anyway, regardless of how much money artists ultimately make from CD sales, it's often the record label that gives them the advance that allows them to record and tour in the first place. That's where I see potential problems.

is that true, though? don't most artists tour before they sign to a label? i would think the price of gas would be a much bigger detriment to touring than the state of the recorded music industry. and how much exactly does it cost to make a quality recording these days? i live in the most expensive market in the country, and i record on great equipment for basically peanuts.

fact checking cuz, Sunday, 25 March 2007 22:50 (thirteen years ago) link

fact checking cuz, On Top of and Over the Mark on pretty much all points.
also, Marissa OTM but that's pretty much a given.

forksclovetofu, Sunday, 25 March 2007 23:09 (thirteen years ago) link

don't most artists tour before they sign to a label?

Most artists lose money touring before they sign to a label or barely break even. Even if you're lucky enough to make a couple hundred bucks a night, subtract gas, road food, motels in any town where you don't have friends, and split the rest between the band. Not exactly a living.

When one of my bands had its brief shot at success with a major manager (which didn't pan out, obv.), we were told that even with him we should be prepared for it to take about two years of heavy touring before we had any real success. One of his big artists had managed this because they were very young when they started and just lived with their parents. The only feasible way for us to do it, it seemed, would be to get a modest advance from a record label to hold us over.

I think the home recording factor is true but also overstated. Yes, recording software and equipment is now relatively cheap, but not every band is going to have a member who's a skilled enough engineer to make a radio-ready recording, something above the quality of a demo.

Hurting 2, Sunday, 25 March 2007 23:53 (thirteen years ago) link

Yeah, that's one of the most important things to remember, the actual overhead cost of recording music, and making it sound as good as it can possibly sound (i.e. radio-ready), is relatively low, unless you're a symphony orchestra or something. If the major labels all crash and burn tomorrow, there'll still be plenty of people recording perfectly good music in home studios, compared to, say, if the Hollywood movie studio system ran out of money, you'd miss out on all sorts of cool special effects and expensive sets and on-location scenery.

Alex in Baltimore, Sunday, 25 March 2007 23:56 (thirteen years ago) link

xpost to Hurting 2, who kind of has a point, but honestly, it takes what, a few thousand bucks to make a record that radio programmers wouldn't reject on the basis of sound quality (if you spend your money right). compared to movies or TV that's peanuts.

Alex in Baltimore, Sunday, 25 March 2007 23:59 (thirteen years ago) link

Because of family and neighbor issues, home studios often don't allow production to the final stage.

blunt, Sunday, 25 March 2007 23:59 (thirteen years ago) link

One thing I think is already happening, for better or for worse, is the rise of the need for a band to be a sort of self-contained unit. You can get further without a label if you have technical know-how, planning ability (booking), marketing savvy, some degree of recording ability (as discussed), and are able to put together your website and promotional materials yourself, put up the money to get your CD pressed, etc.

I see this as good and bad, the bad side being that there are plenty of good musicians out there who are not necessarily good at all these other things.

Hurting 2, Monday, 26 March 2007 00:01 (thirteen years ago) link

a few thousand bucks to make a record that radio programmers wouldn't reject on the basis of sound quality (if you spend your money right)

Are you basing that on studio or home-recording? Are you factoring in what it actually costs to set up a soundproofed home studio or rent a space? Are you including equipment? Are you including pressing/manufacturing costs? How many copies? Are you including professional mastering?

How many records have actually made for a few thousand dollars and then seen anything above limited college radio play? I'm sure there are a few out there, but they are exceptions.

Hurting 2, Monday, 26 March 2007 00:07 (thirteen years ago) link

And plenty of even shadier middlemen...

blunt, Monday, 26 March 2007 00:08 (thirteen years ago) link

Are you including pressing/manufacturing costs? How many copies?


How long before this part of the model collapses, though?

Ned Raggett, Monday, 26 March 2007 00:09 (thirteen years ago) link

Another way to look at it is that 10 years ago, 97% of bands couldn't make a living doing music alone, and soon that figure will be more like 99%.

Mark Rich@rdson, Monday, 26 March 2007 00:24 (thirteen years ago) link

How many records have actually made for a few thousand dollars and then seen anything above limited college radio play? I'm sure there are a few out there, but they are exceptions.

Hurting 2 on Sunday, March 25, 2007 8:07 PM (30 minutes ago)

http://entimg.msn.com/img/prov_w/150_80/093624273608.jpg

and what, Monday, 26 March 2007 00:42 (thirteen years ago) link

OK we're kinda getting sidetracked into the nuts and bolts of recording now. Point is, unless you're already famous and are used to using expensive studios/producers, making a good sounding record is, compared to almost any other endeavor in the entertainment industry, really cheap. The end of multi-million dollar projects wouldn't hurt the quality of music like it would for TV or movies.

Alex in Baltimore, Monday, 26 March 2007 00:54 (thirteen years ago) link

one more thing on the recording-costs thing. i don't exclusively mean building a studio in your own apartment or house and having your own recording know-how. in any decent-sized town, there are plenty of good engineers who'll be happy to record you either in their home studio or in their studio studio, at a price that's cheaper now than it was 15 years ago, and with equipment that's significantly better (leaving aside, of course, the whole digital vs. analog thing, which is a whole 'nother thread, obviously).

and ned is OTM about the pressing/manufacturing issue. the wall st journal was right about that part: we're in a digital age and we aren't going back. pressing and manufacting costs are essentially zero if you want them to be. and, hell, if you want to press up a bunch of cd-r's, which lots of "successful" bands have done, you can do that for significantly less dough than it would have cost to copy your record onto a bunch of TDK cassettes 10 or 15 years ago.

on other points, keep in mind that there are plenty of sources, besides labels, for handling your booking and marketing needs, from seasoned professionals on down to your friends. and if you think a record company can put up a better website for your band than your 12-yr-old brother can, then your 12-yr-old brother isn't paying enough attention.

fact checking cuz, Monday, 26 March 2007 01:56 (thirteen years ago) link

Well, I think the point is "What are the economic models available to bands going forward, assuming recordings continue to equal less and less revenue?"

I think the potential for bands that are completely DIY making it is greatly exaggerated. But I think we'll continue to see an upsurge in bands that have their own imprint and contract everything out or use some kind of hybrid management/promotions/booking company.

I agree that we won't miss much if no one makes million-dollar records anymore, but I don't see a time in the near future when $25,000 or $50,000 or even $100,000 recordings will be outmoded, and even $25,000 is more money than most starting bands can come up with themselves.

Hurting 2, Monday, 26 March 2007 01:58 (thirteen years ago) link

Even hiring an independent promotions company is pretty expensive.

Hurting 2, Monday, 26 March 2007 02:05 (thirteen years ago) link

?

Oh right, albums without singles. Right.

The album is not dead.

Let's sellotape the other thread to this one!

Mark G, Monday, 26 March 2007 15:25 (thirteen years ago) link

Fans of pop and R&B and hip hop and dance music like albums too!

is this really true though? the basic fact of declining sales seems to contradict it on the face. when i was a kid i was buying almost nothing but 45s, k-tel style comps, the occasional big "event" pop album, and then cassingles. i can't imagine it's much different these days, with just less revenue being turned over to the labels.

strongohulkington, Monday, 26 March 2007 15:25 (thirteen years ago) link

Well that's only if you misread "declining sales" as "declining interest in music" when it's really just downloading. And considering how much people hear talk about album leaks, I find it hard to believe that noone's downloading and listening to entire albums just because they're not buying CDs.

Alex in Baltimore, Monday, 26 March 2007 15:27 (thirteen years ago) link

Anyway I think it's obvious that after a couple decades of the industry thriving off of albums that are basically singles + filler, the sky was bound to fall once there was an easy way for people to pick and choose which songs they want and not worry about the rest (iTunes, NOW! comps). But that doesn't mean that the number of music fans who want to hear full albums (which, frankly, was probably always a minority) has actually diminished.

Alex in Baltimore, Monday, 26 March 2007 15:30 (thirteen years ago) link

the ONLY thing i miss about the "old days" is being able to buy singles in stores. i would never buy one on-line. i don't really care about the rest of it.

scott seward, Monday, 26 March 2007 15:38 (thirteen years ago) link

One thing I don't miss is having to ask for singles in record shops from the days when they kept them behind the counter.

Marcello Carlin, Monday, 26 March 2007 15:43 (thirteen years ago) link

I do!

"Miss, have you got the Danielle Dax single?"
"Urr, is it by Elton John?"

Mark G, Monday, 26 March 2007 15:47 (thirteen years ago) link

did they have them by number in the u.k.? we used to ask for #6 and #10, going by the top 40 sheet at the counter.

scott seward, Monday, 26 March 2007 15:48 (thirteen years ago) link

er, you know, a long time ago.

scott seward, Monday, 26 March 2007 15:48 (thirteen years ago) link

..or when I tried to buy a Pete Shelley single (Homosapien, I think) and nearly got palmed off with "Love me love my dog" which had just been re-released for some unfathomable reason!

Mark G, Monday, 26 March 2007 15:49 (thirteen years ago) link

xpost yes they did!

Mark G, Monday, 26 March 2007 15:49 (thirteen years ago) link

i still insist that getting rid of cd singles, or at least making them harder to find, was the beginning of the end for the big boys. what's the alternative? duh, just download it.

scott seward, Monday, 26 March 2007 15:52 (thirteen years ago) link

Does anybody here read the "Lefsetz letter"? Bob Lefsetz is I think a former music biz lawyer. He sends out e-mails and gets other bizzers to respond. At times his 'rockist' love of 'authentic artists' and his dislike of of pop and rap can be annoying, but sometimes he has a point. Here's an excerpt below the link:

The Lefsetz Letter-First in Music Analysis

"Hit tracks turned out to be a costly business. No one believes in the act, there’s no longevity, you’re constantly reinventing the wheel. But, if you have an act that can generate capital for years, you can make much more money at a far reduced cost over a long period of time.

The majors don’t have this time, but the new indie acts do. They create MySpace pages, they allow live taping and trading and they go on the road. They’re building an enterprise based on them, not on a specific song.

And the songs these acts tend to write… They’re not three and a half minute ditties. They’re akin to that underground FM music of the sixties, completely counter to the system, new and different.

The big time purveyors still believe that there’s one mainstream, that everybody adheres to, that everybody is interested in the antics of Jay-Z and Britney. And there are those who pay attention. But a great segment of the public has tuned completely out. They want something more real. And they turn to the Internet to get it.

They comb Websites, they participate in newsgroups, they go anywhere and everywhere, instantly all over the world, to find like-minded people who will turn them on to stuff that appeals to them. And when they find it, they support it. They’re not about ripping off the bands they embrace, they’re about buying all their merch and turning their friends on to them.

We definitely have two worlds. Flummoxed by the new game, the old powers refuse to participate in it and rail against it. Decry file-trading all you want, but so many of the new acts give their music away for free, stealing isn’t an issue for them. And, interestingly, their fans ultimately buy the CD as a badge of honor, to support the act!

Will superstars emerge from the Net world?

Interesting question, but not the point. The point is the changing percentages. The major sector is declining, and the indie sphere is growing. And the indies don’t want to play in the majors’ world. They can do it via their own systems. Oh, maybe a new enterprise will emerge that groups and markets these indie acts, but it won’t look like a traditional label, and the deals won’t be the same. Terms will be straightforward and honest. Accounting will be transparent.

Some might say the lunatics have taken over the asylum.

I say thank god. It’s time a new generation dominates, one with different values, one that is not beholden to the blow ‘em up on TV paradigm embraced by those running the major labels today. These new players are about the music, and the culture. Elements way off the radar of those making quarterly reports.

Give people something to believe in and they’ll give you all their money. Hell, isn’t that what religion is about? Think about your act as a religion. Gain adherents. They’ll spread the word. And guard your core principles very closely. The more honest and trustworthy you are, the more people will flock to you. And the slower the build, the longer the career."

curmudgeon, Monday, 26 March 2007 15:53 (thirteen years ago) link

in order to buy the Geto Boys album in Knoxville you had to ask for it at the counter. that was sort of fun, actually.

Tracer Hand, Monday, 26 March 2007 15:53 (thirteen years ago) link

Not as much fun as asking for "God Save The Queen" by the Pistols at the counter of Smiths or Boots in Jubilee Week!

Marcello Carlin, Monday, 26 March 2007 15:56 (thirteen years ago) link

I think the UK/US differences are quite interesting in this discussion.

As far as I know, physical recorded music sales have held up pretty well in the UK, certaionly in comparison with America. Is this still the case, does anyone know?

And if it is, why? The most obvious difference is that the UK is one market, with national radio getting far better ratings than local commercial radio, for example. This would seem to imply that marketing is easier here, both through a band being able to cover the whole country in a handful of dates and in the conventional sense.

That in turn suggests that marketing is key. I'd have thought the really big acts will still make big bucks, but much of it through tie-ins and commercial deals. I would have thought that lower down the chain, lots of people won't make a living, but will perhaps benefit from an improved low-key infrastructure, including the kind of promo/bookings/management companies that Hurting was talking about. As overall profits fall, the audience, however, may become both more concentrated (with the marketing budgets being focussed on fewer acts with better chances of success) and more distributed (with the smaller labels not having as much to spend). It remains to be seen whether you would actually have a meaningful pop, as in mass, culture below that top level. Or would advertising-driven websites/publications have a vested interest in doing the hyping/buszz-generation etc. on their own, without pres guys from labels, in order to drive their own revenues, thus employing "sifters" to work through all these low-key DIY or just above that level acts and push them. In that case (which is in some ways the current situation anyway), you would have a situaiton with r 'gatekeepers' as strong as or even strongethan the labels currently are.

I'm waffling. And thinking aloud.

Single track sales are still pitiful in the UK, even once downloads are included.

Jamie T Smith, Monday, 26 March 2007 16:03 (thirteen years ago) link

in philly, there was a record store where you had to ask for the skrewdriver records behind the counter.

scott seward, Monday, 26 March 2007 16:09 (thirteen years ago) link

curmudgeon: i'll take a look at his site, but just based on what you posted i am not impressed with this lefsetz guy. especially this:

They comb Websites, they participate in newsgroups, they go anywhere and everywhere, instantly all over the world, to find like-minded people who will turn them on to stuff that appeals to them. And when they find it, they support it. They’re not about ripping off the bands they embrace, they’re about buying all their merch and turning their friends on to them.

i mean, based on my own habits and those i can guess at from ilm, i comb websites participate in newsgroups go anywhere etc etc... and then rip off that shit just like i did the britney and jay-z albums

i think he's right about people learning to turn a good profit on a small scale, but the romanticism i just don't think is there. (i know you posted that with a caveat but, you know, just sayin)

gff, Monday, 26 March 2007 16:10 (thirteen years ago) link

Er, sorry about the spelling in that last post!

Jamie T Smith, Monday, 26 March 2007 16:11 (thirteen years ago) link

Sometimes that Leftsetz guy is fun to read just because what he says is unintentionally funny (some of his baby boomer nostalgia) , and other times it's fun to see the responses he get to his ocasional diatribes(Both the Clap Your Hands Say manager and the Arcade Fire's manager have e-mailed him )....

curmudgeon, Monday, 26 March 2007 16:21 (thirteen years ago) link

emailed him to complain?? you'd think he'd all down with clap your hands and the arcade fire

gff, Monday, 26 March 2007 16:25 (thirteen years ago) link

Yea, his criticisms of the way they market themselves were not consistent with the point of view he espoused in that excerpt above. Weird.

curmudgeon, Monday, 26 March 2007 16:38 (thirteen years ago) link

It seems like everything that blames the recording industry for putting out bad music, not listening to consumers, not "developing artists," and all that means little next to the fact that you can get almost all music now for free. Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business? Maybe there has been, I don't know. But downloading a torrent is roughly the same number of clicks as downloading an album from iTunes or ordering it from Amazon, so it seems like a no-brainer which choice consumers will make.

Mark Rich@rdson, Monday, 26 March 2007 18:56 (thirteen years ago) link

To answer my own question -- yes, there is an example where people pay voluntarily and it's called shareware. And I could definitely see the music industry going to a new two-tiered system whereby big artists team with corporations to sponsor their albums and insert advertising into their songs (Levis sponsors a pop album, etc.) while indie artists go to a shareware system of donations. I bet some of them would do OK, especially if they had a close interaction and trust w/ their fanbase.

Mark Rich@rdson, Monday, 26 March 2007 19:15 (thirteen years ago) link

"Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business?"

I don't think people buy off iTunes because they like the way the industry runs their business. They do it, I would guess, because (a) it's the legal way to get music or (b) because they want to help the artist make a living, or (c) because they don't know how to find and download torrents.

But as to your question of an example: people leave tips at restaurants even though they don't have to, to be served. People order food in restaurants and only pay after they've eaten it.

Euler, Monday, 26 March 2007 19:16 (thirteen years ago) link

Thing is, the indies seem to do okay by building up just the kind of artist identification/loyalty you're talking about. They don't make great heaps of money, but fans tend to be dedicated and willing to spend substantial sums on music (albums, shows, merch) and keep up that spending over years and even decades. So they don't currently need to "go to a shareware system". Any more than they already have, I mean...

It seems to be the majors who are having a hard time making the old model work in the manner to which they've grown accustomed.

Pye Poudre, Monday, 26 March 2007 19:20 (thirteen years ago) link

The weird thing about the Leftsetz bit is that Jay-Z is actually a good example of someone who did the "slow build" kind of career he's talking about and built a lasting brand, fan loyalty, etc. that will continue to make him and his eventual estate money for a very long time.

Meanwhile, I actually see the danger of the opposite trend in the indie world - a fast-moving, loyalty-free world where the availability of such a wide variety of music and the sheer number of new albums coming out every year leads people to be mercurial and dismissive and rarely stay with artists for the long haul.

Hurting 2, Monday, 26 March 2007 19:21 (thirteen years ago) link

Could be. Dunno. At present, indie kids still seem pretty serious about their favorite artists and about spending money on music in general. Then again, I don't really have my ear to the ground WRT trends in the business...

Pye Poudre, Monday, 26 March 2007 19:25 (thirteen years ago) link

Meanwhile, I actually see the danger of the opposite trend in the indie world - a fast-moving, loyalty-free world where the availability of such a wide variety of music and the sheer number of new albums coming out every year leads people to be mercurial and dismissive and rarely stay with artists for the long haul.

Hurting OTM

Alex in Baltimore, Monday, 26 March 2007 19:32 (thirteen years ago) link

But downloading a torrent is roughly the same number of clicks as downloading an album from iTunes or ordering it from Amazon, so it seems like a no-brainer which choice consumers will make.

i wonder how many people out there are like me. it was worth it to join emusic for a number of reasons (nb not street teaming for emusic here but fuck it i think it's great). the first was just the overall lower hassle of getting shit from one place, with uniform and high quality, FAST, (usually) correct tags -- as opposed to illegal d/ling which is a crapshoot as far as availability, reliability, and speed. plus i was excited by being able to SHOP again, i really missed that experience. browsing thru every month is a lot of fun. somewhere in there was a niggling moral concern with wanting to see someone get paid for what they did, too.

so it's not a 'no-brainer' really! i added it up and decided paying a little was a good thing. i still rip shit off all the time, still, so, it's not either-or anyway.

gff, Monday, 26 March 2007 19:32 (thirteen years ago) link

the point being that if a legal service can offer something that beats the negatives of the illegal experience and price it right, there you go, success.

gff, Monday, 26 March 2007 19:36 (thirteen years ago) link

This doesn't get mentioned too often, but how do you think the separation between the computer and the stereo plays into this. Of course, tons of people are fusing the two, or only use computers. But there's still enough of a divide for folks to have only music they listen to on their computers and music they listen to on their stereos. By they way, what are the recent trends in the sale of stereo components?

QuantumNoise, Monday, 26 March 2007 19:42 (thirteen years ago) link

Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business?

drinking water (i'm not sure that people liking the way the industry runs its business is the reason for this. rather, people just like the product, whether its taste, or marketing, or packaging, or whatever, and they see the price as reasonable)

fact checking cuz, Monday, 26 March 2007 19:43 (thirteen years ago) link

sorry, that middle sentence doesn't read well.

QuantumNoise, Monday, 26 March 2007 19:43 (thirteen years ago) link

"Has there every been an example of a product that could be had for free but people decided to pay anyway because they liked the way the industry ran their business?"
http://www.sooaf.com/quebec/bouteilles/aquafina.JPG

forksclovetofu, Monday, 26 March 2007 19:43 (thirteen years ago) link

whoops, just beat to it by fact checkin' cuz.

forksclovetofu, Monday, 26 March 2007 19:44 (thirteen years ago) link

Quantum's question totally OTM. Gear purchasing = canary in the coal mine.

Pye Poudre, Monday, 26 March 2007 19:45 (thirteen years ago) link

This doesn't get mentioned too often, but how do you think the separation between the computer and the stereo plays into this.

This is still a slight issue for me, as I haven't invested in really good computer-to-stereo equipment (I have a crappy headphone jack adaptor), and I'm still nervous about the permanence of my computer-based music (external hard drive could fail, etc.)

If it wasn't for emusic, I'd probably just keep buying physical recordings, but the economics and convenience of emusic have made it irresistable.

Hurting 2, Monday, 26 March 2007 19:46 (thirteen years ago) link

I totally agree. I only own a laptop, and I use one of those headphone-RC cable jacks into the aux.

QuantumNoise, Monday, 26 March 2007 19:48 (thirteen years ago) link

Thought of that, but that's not why people byt bottled water.

Rockist Scientist, Monday, 26 March 2007 19:58 (thirteen years ago) link

buy. sorry, busy.

Rockist Scientist, Monday, 26 March 2007 19:58 (thirteen years ago) link

Srsly if I were in the hardware business, I'd create a specially-designed and marketed hard drive just for music, or maybe for music and video - one that's designed to last a long time and rarely fails and also maybe looks cool and has some built-in features beyond just being storage. Sort of a bigger, more permanent iPod.

Hurting 2, Monday, 26 March 2007 19:59 (thirteen years ago) link

A jukebox lockbox, if you will.

Hurting 2, Monday, 26 March 2007 20:02 (thirteen years ago) link

I don't feel like I'm getting "user value" or whatever if I don't have a CD with a sleeve. Call me old fashioned. Also, I have a fucking great big hi-fi on a rack and stands with expensive cables and it sounds better than any computer I ever heard.

Scik Mouthy, Monday, 26 March 2007 20:41 (thirteen years ago) link

While there's a few good points here, the whole basis for this discussion is completely pointless.

Overall Music Sales: 2004 - 817,000,000, 2005 - 1,003,000,000, 2006 - 1,198,000,000

That's a 19.4 % increase from 2005, and 46.6% from 2004. And that's just according to Nielson Soundscan, which I don't think does a great job in covering all the boutique stores and sites.

So how about we tell the RIAA and all the other chickn' littles to shut the fuck up and get on with it?

First step is to provide deep catalog titles in high bandwidth formats. Music Giants is getting the idea. However, the prices are just stupid. While it's taking the right step in offering uncompressed downloads, I'm still not getting printed album art and a disc, which still happens to be very reliable, convenient backup storage. There are also no manufacturing and distribution costs. So rather than $14 to $20, shouldn't they be priced at around $5? Wake me up when they are.

Fastnbulbous, Monday, 26 March 2007 20:47 (thirteen years ago) link

if you read what you'd just linked to, you'd see nothing that really contradicts this thread's point (which specifically covers first quarter 2007 sales). that statistic converges album and single sales -- album sales are down, so net gross is plummeting. though it's definitely a good point that overall sales are up.

OVERALL MUSIC SALES (01/02/06 - 12/31/06)
(ALBUMS, SINGLES, MUSIC VIDEO, DIGITAL TRACKS - IN MILLIONS)
UNITS SOLD 2006 2005 % Chg.
1,198 1,003 19.4%

TOTAL ALBUM SALES (01/02/06 - 12/31/06)
(INCLUDES CD, CS, LP, DIGITAL ALBUMS - IN MILLIONS)
UNITS SOLD 2006 2005 % Chg.
588.2 618.9 -4.9%

Milton Parker, Monday, 26 March 2007 20:57 (thirteen years ago) link

Thought of that, but that's not why people byt bottled water.

i don't think it matters why people buy bottled water. i think it only matters that they do, even though they don't have to.

fact checking cuz, Monday, 26 March 2007 22:27 (thirteen years ago) link

Total units moved does not give you a financial picture. Even a 20% increase comprised mainly of digital single songs does not offset a mere 5% drop in album sales. And that's just one year.

Hurting 2, Monday, 26 March 2007 22:45 (thirteen years ago) link

People buy bottled water for:
1) oft-imaginary safety reasons
2) ease of portability
3) impulse needs
4) ease of access

Sound familar?

forksclovetofu, Monday, 26 March 2007 22:57 (thirteen years ago) link

and 5) good packaging and marketing.

which is exactly what a certain four multinational distribution companies have always said they're especially good at.

fact checking cuz, Monday, 26 March 2007 23:33 (thirteen years ago) link


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