the week the music (biz ) died

The Album, a Commodity in Disfavor



By JEFF LEEDS
Published: March 26, 2007

LOS ANGELES, March 25 — Now that the three young women in Candy Hill, a glossy rap and R&B trio, have signed a record contract, they are hoping for stardom. On the schedule: shooting a music video and visiting radio stations to talk up their music.



But the women do not have a CD to promote. Universal/Republic Records, their label, signed Candy Hill to record two songs, not a complete album.

“If we get two songs out, we get a shot,” said Vatana Shaw, 20, who formed the trio four years ago, “Only true fans are buying full albums. Most people don’t really do that anymore.”

To the regret of music labels everywhere, she is right: fans are buying fewer and fewer full albums. In the shift from CDs to digital music, buyers can now pick the individual songs they like without having to pay upward of $10 for an album.

Last year, digital singles outsold plastic CD’s for the first time. So far this year, sales of digital songs have risen 54 percent, to roughly 189 million units, according to data from Nielsen SoundScan. Digital album sales are rising at a slightly faster pace, but buyers of digital music are purchasing singles over albums by a margin of 19 to 1.

Because of this shift in listener preferences — a trend reflected everywhere from blogs posting select MP3s to reviews of singles in Rolling Stone — record labels are coming to grips with the loss of the album as their main product and chief moneymaker.

In response, labels are re-examining everything from their marketing practices to their contracts. One result is that offers are cropping up for artists like Candy Hill to record only ring tones or a clutch of singles, according to talent managers and lawyers.

At the same time, the industry is straining to shore up the album as long as possible, in part by prodding listeners who buy one song to purchase the rest of a collection. Apple, in consultation with several labels, has been planning to offer iTunes users credit for songs they have already purchased if they then choose to buy the associated album in a certain period of time, according to people involved in the negotiations. (Under Apple’s current practice, customers who buy a song and then the related album effectively pay for the song twice).

But some analysts say they doubt that such promotions can reverse the trend.

“I think the album is going to die,” said Aram Sinnreich, managing partner at Radar Research, a media consulting firm based in Los Angeles. “Consumers are listening to play lists,” or mixes of single songs from an assortment of different artists. “Consumers who have had iPods since they were in the single digits are going to increasingly gravitate toward artists who embrace that.”

All this comes as the industry’s long sales slide has been accelerating. Sales of albums, in either disc or digital form, have dropped more than 16 percent so far this year, a slide that executives attribute to an unusually weak release schedule and shrinking retail floor space for music. Even though sales of individual songs — sold principally through iTunes — are rising, it has not been nearly enough to compensate.

Many music executives dispute the idea that the album will disappear. In particular, they say, fans of jazz, classical, opera and certain rock (bands like Radiohead and Tool) will demand album-length listening experiences for many years to come. But for other genres — including some strains of pop music, rap, R&B and much of country — where sales success is seen as closely tied to radio air play of singles, the album may be entering its twilight.

“For some genres and some artists, having an album-centric plan will be a thing of the past,” said Jeff Kempler, chief operating officer of EMI’s Capitol Music Group. While the traditional album provides value to fans, he said, “perpetuating a business model that fixates on a particular packaged product configuration is inimical to what the Internet enables, and it’s inimical to what many consumers have clearly voted for.”

Another solution being debated in the industry would transform record labels into de facto fan clubs. Companies including the Warner Music Group and the EMI Group have been considering a system in which fans would pay a fee, perhaps monthly, to “subscribe” to their favorite artists and receive a series of recordings, videos and other products spaced over time.

Executives maintain that they must establish more lasting connections with fans who may well lose interest if forced to wait two years or more before their favorite artist releases new music.

A decade ago, the music industry had all but stopped selling music in individual units. But now, four years after Apple introduced its iTunes service — selling singles for 99 cents apiece and full albums typically for $9.99 — individual songs account for roughly two-thirds of all music sales volume in the United States. And that does not count purchases of music in other, bite-size forms like ring tones, which have sold more than 54 million units so far this year, according to Nielsen data.

One of the biggest reasons for the shift, analysts say, is that consumers — empowered to cherry-pick — are forgoing album purchases after years of paying for complete CD’s with too few songs they like. There are still cases where full albums succeed — the Red Hot Chili Peppers’ double-CD “Stadium Arcadium,” with a weighty 28 tracks, has sold almost two million copies. But the overall pie is shrinking.

In some ways, the current climate recalls the 1950s and to some extent, the 60s, when many popular acts sold more singles than albums. It took greatly influential works like The Beatles’ “Sgt. Pepper’s Lonely Hearts Club Band” and the Beach Boys’ “Pet Sounds” to turn the album into pop music’s medium of choice.

But the music industry’s cost structure is far higher than it was when Bob Dylan picked up an electric guitar. Today’s costs — from television ads and music videos to hefty executive salaries — are still built on blockbuster albums.

Hence the emergence of scaled-back deals with acts like Candy Hill. Labels have signed new performers to singles deals before, typically to release what they viewed as ephemeral or novelty hits. Now, executives at Universal say, such arrangements will become more common for even quality acts because the single itself is the end product.

With Candy Hill, Universal paid a relatively small advance — described as being in “five figures” — to cover recording expenses. Ms. Shaw, who formed the group with Casha Darjean and Ociris Gomez, said the members had kept their day jobs working at an insurance company and doing other vocal work to be able to pay the rent at the house where they live together.

If one of their songs turns into a big hit, they hope to release a full album, and to tap other income sources, like touring and merchandise sales.

But turning a song into a hit does not appear to be getting any easier.

Ron Shapiro, an artist manager and former president of Atlantic Records, asked, “What are the Las Vegas odds of constantly having a ‘Bad Day?’ ” — referring to a tune by the singer Daniel Powter that sold more than two million copies after it was used on “American Idol.”

While music labels labor to build careers for artists that are suited for albums, he added, “You have to create an almost hysterical pace to find hits to sell as digital downloads and ring tones that everybody’s going to want. It’s scary.”

if music ceases to be "owned" and stored in little plastic coffins i will be very happy; i don't have the collector mentality, though, and others may be sadder about this.

But for other genres — including some strains of pop music, rap, R&B and much of country — where sales success is seen as closely tied to radio air play of singles, the album may be entering its twilight.

After digging into old country for the past couple months, I realized just how singles-oriented the genre was up until the outlaw movement (which was influenced by rock). I mean, even those classic Haggard records from the mid to late 60s feel like a hit single surrounded by a smattering of odd recordings (someof which are awesome and some are forgettable). I suspect R&B/soul went through a similar transformation during that same time. So maybe internet could help create an "new" industry that's not totally unlike what the music industry was before 60s rock music made the LP the heavyweight.

if music ceases to be "owned" and stored in little plastic coffins i will be very happy

How dare you speak that way about my computer.

if music ceases to be "owned" and stored in little plastic coffins i will be very happy

Even by your standards that's a particularly stupid and crass comment.

you're acting as if recordings have some inevitable destiny to remain commodities, or that if they aren't, people will stop making music.

i think it's far more likely that certain types of fans will no longer love music if they are no longer able to purchase it as an object. which i'm not denigrating, i can see why it would be so.

I don't understand that at all.

for myself i think the only long-term financial arrangement for musicians, labels and fans that has any chance of working at all is a yearly fee paid to an international ASCAP-style body that divvies up money amongst the different bands and labels etc. and then everybody can download as much as they like, from wherever they like. it would be complicated, tracking that stuff, but no less than ASCAP is already.

and if you didn't pay the fee - BAM with the detector van

I don't see why people who don't download should be obliged to pay any fee - and in order for this to work it would have to be applied across the board or not at all.

What about the 'digital divide' and poor folks without high-speed internet?

In addition the income from the fees would, if historical precedent is anything to go by, be far more likely to be divvied up amongst the ASCAP-type body rather than artists and labels, and even if it were the labels would get most of it and the artists relatively little, as per the current state of the publishing industry where the author is routinely treated as the least essential cog in the mechanism.

or - if you'd rather let the market lead the way, every speaker/tannoy sold in any device - i.e. telephones, headphones, stereo speakers etc - anything capable of producing audible soundwaves suitable for music - would carry an automatic $5 (or whatever) surcharge, which would then be divvied up likewise to compensate artists and their commercial partners for producing and distributing the music.

record companies can still make money on physical product but since that product has remained essentially unchanged since the days of edison - and can be duplicated by processes which cost nothing - they need to get more radical with it. create multitrack albums whose sound mixes listeners can alter at whim. (etc?)

marcello those are good points

The thought of "compensating" Mick Jagger or Paul McCartney makes me puke and chortle.

What about the 'digital divide' and poor folks without high-speed internet?

They are clearly bad, evil and wrong, and God is punishing them for their sins.

Don't forget - you would also have to compensate Momus.

Meanwhile, thanks to new releases by Arcade Fire, Air, Amy Winehouse, Modest Mouse, LCD Soundsystem, etc. the (independent) store where I work is having one of its best months ever. This year's new release schedule has been perfect for our customer base. Granted, 2006 was a shitty year no matter how you look at it, and there's been a dramatic change in sales since I started there in 2004. But things are actually looking up for us, for now at least.

"If "newer generations" consider music "less and less important" then we might as well pull the plug on the human race now and have done with it"

Unfortunately, thats exactly my impression: I can be completely wrong and surely it is based on Italy, a country where rock and pop music never had a particular cultural importance and sales have always been kind of poor.

"What's really different is this sort of pragmatic attitude toward the way music is consumed, like for him hearing a song on the radio or as the soundtrack to a music video or TV commercial all = the same thing"

Actually, I think this is totally true. Still I don't find particularly appealing this undiffentiated approach to music.

The LCD Soundsystem and Air albums have flopped badly in the UK - peak chart positions of 28 and 49 respectively.

Pop has eaten itself.

I really don't think any of these articles about "the death of the album" are making a convincing argument. Singles have always driven music sales at a mainstream level, and maybe singles will become more important, but there are 2 important factors here: I think most artists are still going to want to create whole albums, and fans of those artists are still going to want to hear whole albums from them. And this goes more or less across genre lines, not just artsy rock bands like Radiohead and Tool. Fans of pop and R&B and hip hop and dance music like albums too! Even if artists move to some weird cycle like releasing a new song every month or two, people are still gonna start compiling those songs as full-length CDs, whether the labels do it or fans make them on their own.

The radio/TV commercial soundtrack thing though has been in situ for at least 20 years, ever since the Levi's campaign. Look at how Jackie Wilson posthumously got a Christmas number one in 1986 which was essentially sold as a kiddie novelty song with wacky puppet video.

Hasn't the Telecommunication Act of 1986 that allowed Clear Channel to monopolize much of commercial radio in America hurt the sales of music? Despite i-pods and satellite and web radio, lots of folks still stick on commerical radio in their cars and elsewhere. Arcade Fire were on Saturday Night Live but how many commercial radio stations were/are they on? For them to sell numbers like that Modest Mouse album with "Float On," they'll need to reach the masses who still listen to commerical radio.

Or, commercial radio may have to be forced to bend to the will of the increasing demographic (if there be one) and alter their approach accordingly. No organisation, however anxious its shareholders, can survive on "Your Song" forever.

I think pandering to perceived demographics is part of the problem.

Singles have always driven music sales at a mainstream level

They have? So why there so few gold singles in the eighties? It wasn't until the introduction of the cassette single and RIAA lowered its standard for gold singles that we started to see serious single sales.

"Or, commercial radio may have to be forced to bend to the will of the increasing demographic (if there be one) and alter their approach accordingly. No organisation, however anxious its shareholders, can survive on "Your Song" forever"

Hopefully!

In Britain, the last real boom year for singles (as in 45) sales was 1984, where seven singles passed the million mark. From 1985 there's a marked tailing off, which may at least in part explain the altered emphasis in the singles chart thereafter from actual sales to reflections of record company promotional activity.

Singles have always driven music sales at a mainstream level

They have? So why there so few gold singles in the eighties? It wasn't until the introduction of the cassette single and RIAA lowered its standard for gold singles that we started to see serious single sales.

Sorry, I should've been more clear there. What I meant was that album sales, at least for big multi-platinum sellers, are generally driven by big hit singles that you hear on the radio and see on MTV. Famous artists are known for their singles, not for their albums. Albums aren't sold as albums, they're sold as CDs that feature this single and that single and so on.

The business will always trade in the chance of selling a million singles for the certainty of selling 10,000

Kid A, Barry Manilow's Great Songs Of The Fifties, Rod Stewart's American Songbook &c &c &c to thread.

?

Oh right, albums without singles. Right.

The album is not dead.

Let's sellotape the other thread to this one!

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.

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.

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.

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.

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.

I do!

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

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.

er, you know, a long time ago.

..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!

xpost yes they did!

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.

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."

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.

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

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.

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