Let’s see the matching piracy graph…
You say that like it’d be some giant revelation. We all know. It’s been almost 15 years.
“You say that like it’d be some giant revelation”
Because it is — to a lot of people.
No, it’s not. Any remotely intelligent person understands piracy hurt recorded music sales. Some people just don’t give a shit.
“Any remotely intelligent person understands piracy hurt recorded music sales”
Well, piracy is just not an issue to most people. And frankly, why would it be? They’re not aware that people can’t afford to produce music for them anymore because of piracy.
A lot of them don’t even know they’re using criminal sites. In their world, it’s legal if it has ads from major brands all over the place.
That’s why education is so important. And a corresponding piracy graph would be a start.
Well, yea, you basically just used a lot more words to restate the other sentence in my post.
You’re saying people are aware that piracy hurts — and that they don’t care.
I agree that people don’t care about piracy. But that’s because they don’t understand the math:
Piracy –> less sales –> less money –> less new music.
Ok, after we add in the piracy graph, let’s add in a graph on number of album releases by year. See if that final part of your equation is actually correct.
SPOILER: It won’t be. Maybe release growth has tapered off in the last couple years, but I don’t even think you would bet against a substantial growth in the number of albums released from 1998 to 2010 or so.
yup.. .this is a sad graphic
And all we get for streaming is cannibalizing (less record sales):
“As more and more consumers transition from purchasing music to streaming tunes, it’s natural to see album sales shrink”
So here’s what we need to know:
Exactly how much do you lose when you make a song available for free on Spotify?
Let’s be on the safe side and assume that only 1 out of 15 Spotify streamers would buy the track if wasn’t available for free.
And let’s say your song is streamed 1 million times. Spotify pays you $7,000, while you lost about 66,000 sales.
iTunes would have paid you $46,200 for those 66,000 sales. Instead you get $7,000 from Spotify.
Result: You lose $39,200.
1 out of 15 is WAY to low a ratio. Based on Beyonce’s sales of her not-on-Spotify record compared to just her (fairly arbitrary, yes) Facbeook numbers, sales in general is 1 in 65+. And that’s for Beyonce. Imagine what it is for artists who don’t have insanely rabid fans.
“1 out of 15 is WAY to low a ratio”
You’d still lose a lot of money if it were 1/30 — which it isn’t (and no, you can’t use FB numbers like that).
But now for something more important:
I still think we — Paul included — should take a very close look at VIDescape. It literally improves from week to week (latest: 16:9 thumbnails and better text), and it claims to pay better than any other service. Why not check if that’s true? I think I saw somewhere that they pay 50%, which would be less than the current YouTube version so I’m still a bit puzzled.
Then again — VIDescape does not force you to upload your entire catalog, it allows you to make exclusive iTunes releases, it seems more open than YouTube, it has roots in the music industry, and you can embed the videos in tweets and Facebook pages, which means that the traffic you usually get from these services won’t take a hit if you switch from YouTube to Videscape.
It’s not ready yet, but I really think this could be the one a year from now.
You underestimate the power of access. Over the last few years on Spotify, I’ve probably listened to over 100 albums I absolutely, 100% NEVER would have bought. And the amount of singles I’ve listened to that I never would have bought is probably 5 times that.
Quantity wise, yes, someone like me listens to more than the average person. But 1, the avg Spotify user is probably closer to me than not. And 2, regardless of quantity, the fundamental concept is the same for anyone. If the music is there and you’re hearing about it in culture, you might give it a listen, as I do. So it’s entirely possible enormous chunks of Spotify plays are curiosity.
I’ve heard many remotely intelligent people argue that piracy either does not hurt the artist, or actually helps them as “promotion”. So I think the case needs to be shown again and again how this is untrue.
Saying it helps promotion doesn’t mean they think it doesn’t hurt sales. Mainly because those can be two different aspects of things. For example, I would, and have, argue strongly that piracy helped the indie music scene immensely. But I’d never argue piracy didn’t hurt major artists or indies after they hit their particular critical mass.
“I would, and have, argue strongly that piracy helped the indie music scene”
Statements like that make me think you don’t know any indie acts at all.
Piracy hurts new acts at least as much as it hurts established artists: New bands simply never get a break because of illegal ‘sharing’ unless they make it big on YouTube, and piracy is directly responsible for the fact that the industry only has half the money to spend on talent development compared to 1999. Piracy hurts all the way around and it doesn’t help anybody.
Interesting to see that streaming failed and we still have to rely on record sales.
Not exactly what people said back in the day when streaming was new…
The scary part: How could so many people be so wrong?
“The scary part: How could so many people be so wrong?”
Except it could be argued that the really scary part is that all the majors gave away all the blue, red, yellow and purple sales in the graph — in exchange for a cut of the almost invisible streaming revenues when they signed Google’s infamous contract.
They started reading Tech blogs
You’re absolutely right about that.
What’s a bigger group of people. The 40M or so who stream on Spotify, or the amount of people that barely ever or NEVER bought music in their lives.
How has streaming failed? Are record sales going back up again?
Your problem is you’ve made formats out to be a competition. Fuck everything that’s not a CD sale!
“How has streaming failed?”
Um, because it’s been around since forever — Spotify was launched in 2008 — and it’s still invisible in the graph on this page?
These are Recording Industry Association of AMERICA statistics. Spotify didn’t launch in AMERICA until July, 2011.
You don’t care about the facts or the truth, you’re just one walking, talking smear/spin campaign.
Fact is that streaming failed on all accounts, jw.
You can see it the graph, you can see it in the fact that Spotify still loses money 24/7 after all these years.
It just didn’t work. Let it go…
Streaming as a business model is less than 10 years old. How can you say it’s failed?
You gotta be joking…
This is what I see when I look at that graph.
Even if you take out SoundExchange (Pandora launched in 2005), streaming (premium+ad supported) is growing faster than iTunes as a source of revenue.
So if you really wanna say that the chart proves that Spotify is a failed format, you got some ‘splaining to do.
Here’s the image.
@jw, email me I’ll teach you the secret backdoor way into the club of comment section image posters.
The problem is that you are both/all of you are WRONG ! Streaming has not “failed”, but at the same time it has not succeeded in replacing anything…It is simply a new “medium” that will continue on and eventually find it’s rightful place in the market place……Stop look at everything as “THE ANSWER” or “THE SOLUTION”… There are a lot of “problems”, however the biggest is the amount of total misinformation constantly being spread by the industry……I remember when everyone said “forget cassettes”….and “cassettes are dead”, DAT is the answer…..Can you even find one of those fucking machines anywhere today????..LOL !
Streaming is a new avenue to market and sell product…..and as it develops, so will the industry’s ability to understand and use it effectively ! There is a learning curve to everything and it is all a “process” !
Paul, your comment system is TERRIBLE. The worst I’ve ever experienced. Ate the image I posted, then I post a URL to the image & it doesn’t show up.
You really need to get that shit under control.
Look at Scandinavia where streaming has been around the longest before you deem it dead. In my country Denmark streaming accounts for over 60% of recorded music sales.
But… 60% of what? Remember the top-line is sinking overall (see above).
Stop bitching and breathe! You have no idea the avalanche of bad s*&t we get hit with in our comments section, including lots of spam (which typically has SEO-baiting links that then mess us up with Google, so we really have to quarantine links and check them manually).
But you’re also right, there’s a lot we need to do to improve our comments system.
I can appreciate that, but there are much bigger editorial sites that seem to function just fine. Your method of policing the comments is better suited to much less trafficked websites, it seems like you’re using the wrong approach or an outdated technology.
I understand (and appreciate) the need for anonymity, but I would suggest that offering the choice for some sort of optional verified commenting account with less restrictions would streamline site use for a lot of the more active users, & make the discussions much more lively. It would also prevent others from posting as “jw” or “JW,” which happens from time to time.
Going through the trouble of creating a graph, & then not being able to post the graph, makes me less likely to go through the trouble in the future.
Right, because people still consume music other ways. I don’t understand why so many people on this site feel the need to pit consumption formats against each other. Some people still buy music. Awesome! Some other people stream music, many instead of stealing it. Awesome! Some people buy vinyl. Awesome!
Also, by Spotify’s own best numbers, i.e. inflated ones, a literal fraction of the amount of users still generate pretty close to the amount of plays as YouTube. And it pays better, too. (Spare me from your YT schtick, it’s beside the point, and your previews you love so much are just another rev stream, not a competition). I’d say that’s pretty impressive. 40M people play almost as much music as a billion. Imagine if that was 100M, or 200M. Why don’t you want to monetize 200M people?
“Imagine if that was 100M”
There you go again… Imagine all the people / Living life in peace.
Meanwhile in the real world: Streaming failed. No worky. Look at the numbers.
As for YouTube: Yes, I was in love with the thing and now it’s over, period.
Um…how is me saying a concept that’s already been proven with video and halfway there with audio dreaming, but you convincing a culture that is moving to streaming/cloud storage in almost every facet of life, to go back to a physical or digital ownership medium not dreaming?
Also, what numbers are you using?
There you go again… Imagine all the people / Living life in peace.
You fail to realize that so far streaming for the most part has actually succeeded!
Because streaming was designed to better service customers and giving them convenience at a price point they would convert on.
It has failed in replacing download and physical medium revenues, but if that was ever bellied around as its purpose it was nothing more then marketing and propaganda to keep musos at bay.
YouTube is still my number one source for music discovery and listening, and I use Vevo as well.
Try putting a different hat on and looking at it from the music listeners perspective once and awhile.
“It [streaming] has failed in replacing download and physical medium revenues”
Exactly. I tell you, we’ll be BFF the day you realize what it is you’re saying. We even share this extremely annoying formatting obsession.
“Try putting a different hat on and looking at it from the music listeners perspective once and awhile”
I do. Not once in while, but every single day. And music listeners lost everything because, as you put it, “streaming failed in replacing download and physical medium revenues.”
It’s very simple: Professional music production is financed by download and physical medium revenues and guess what happens when that goes away: Katy Perry all over the place. Everybody’s bored to death, but we have to play it safe. Nobody can afford it any other way.
…and fuck, now I did the italic screw-up, too.
You’re getting on my nerves.
And plenty of people share it legally as well.
Im really trying to avoid the stupid piracy debates these days, however, you know what i never see in any of these discussions????
If you said numbers and reports regarding JAPAN’s piracy efforts you would be correct!
JAPAN cracked down years ago, guess what? Yeah sales and profits/revenues did not go up.
Geez i wonder why no one ever mentions that…
This is never mentioned because I don’t think it’s true. (http://www.billboard.com/biz/articles/news/global/1568815/why-japans-music-industry-is-booming-for-now)
The big problem with the U.S. was & still is digital downloads. The digital download is an antiquated concept. Having a song on a local drive versus streaming it from the cloud is actually inconsequential, because in either case, it’s the same experience… you click on it, & it plays. So the digital downloads model is tied to a short period of time where bandwidth didn’t allow for streaming, so roughly 1999 through the mid aughts. We’re a decade past that, but the industry is still clinging to the download model. They were sold a bill of goods with digital downloads. A lot of transactions went from ~$12 down to ~$1 when they became allowed to cherry pick, & they didn’t sell 12x as many singles to make up for the contraction. So the industry shrank as consumers switch from bundled purchased to a la carte digital downloads. And Steve Jobs was laughing all the way to the bank, because all of the money was in selling iPods, & later iPhones. Steve Jobs basically launched the iPhone on the back of the music industry; there’s no way it could’ve been done without the success of the iPod, which came at the expense of the music industry.
The fear that led to a la carte sales was that, “well, if we don’t do it, folks will just pirate stuff instead.” But Napster didn’t sell people on the a la carte model, it sold them on the all you can eat model. If they had launched $10/mo for unlimited Napster access (or some sort of tiered pricing system), & then transitioned that into streaming when it made sense bandwidth-wise, it would’ve been a smashing success, & they might could even charge more than $10/mo for the premium tier. And the consumers who were transitioning to a la carte were the ones who would’ve otherwise bought CDs.
That’s why these Scandinavian countries are all doing so well, because they never really embraced the digital download concept, there was more of a transition from all-you-can-download (illegal) to all-you-can-stream (legal).
What the U.S. industry needs is a return to bundling, & streaming is essentially bundling all music for a monthly fee (artist payments will work themselves out at scale). The per-song transaction is a cancer to the industry.
That Billboard article is really, really good ! Almost all the points are 100% spot on, especially about how Japanese artists are good at bundling collectors items to their CD so fans will spend a lot of money to get more that “just” the music. And it as been going on for years and years.
The only part I will disagree with is point 4: piracy does exist. There are Japanese P2P softwares and I know many, many musicians that use pirated software too. The fact that a lot of teenagers use phones only to access internet is quite true though…
“JAPAN cracked down years ago, guess what? Yeah sales and profits/revenues did not go up”
Because they didn’t stop streaming, and they didn’t stop piracy.
I’m not saying tough penalties is the only solution, btw. I’m not even sure it is a solution. I’m pretty sure it makes much more sense to follow the money and look at the ISPs.
It would be interesting to see a different format plotted against that chart: the video game
Agreed, streaming has not failed.
Streaming as a complete replacement for downloads and CD’s has failed, but im not certain that was the real plan anyways.
“streaming has not failed”
Sure, it did — just look at the numbers.
If you want to make a living from recorded music, you have to sell records. It’s not an opinion, it’s a fact, and the proof is the chart.
You must be looking at a different chart than I am.
That’s entirely possible — I’m looking at the chart on this page, you’re probably looking at the one in your dreams.
This is straight from that chart. From my perspective, streaming is outpacing digital downloads. There’s every indication that streaming will continue to grow.
Here’s another interesting comparison…
This shows that streaming revenue is more than offsetting the drop off in digital sales.
And these don’t include SoundExchange. Pandora’s contributions are roughly equal to premium streaming, at least over the last 3 years.
So explain to me EXACTLY how you extrapolate that streaming is failed format from this data, rather than simply a young format.
The CD was failing long before streaming came along, if that’s your argument.
If there’s a failed format among the data, it’s obviously the digital download, because it had a decade to take hold & it’s already peaked. A la carte digital downloads have been cannibalizing everything.
This is a bad argument….It would be like pointing to increased TV/cable subscription sales and saying “You see, people don’t want to go the movies any more, they would rather stay home and watch everything on their TV/cable….So the movie theater business must be “dead” ” ! ! ! ! (O.K….it’s not a perfect match…but do you get the message?) !
Again I find it fascinating when people make poignant comments and won’t attach their names to them…..I agree with Anonymous above, but don’t know if your the same “anonymous” below…it seems as if there are more than one of you ! …..
To answer you question “….How could so many be wrong”…..The answer is “EASY”…..Most of the music business is run like “crowed control” or “herding”……The lemmings love to repeat unsubstantiated crap because they feel the need to say something that sounds relevant ! ….I would love to see this graph go back to 1960! I would bet you might see a “pattern”….!
Spoiler alert: Watch for a “major” to create a distribution arm that rivals CBS’s and WEA’s during the 90’s…Streaming is not working in regard to building the record business (new acts and developing sales), physical product along with other forms will ultimately be the governing practices, as soon as something musically “pivotal” (like the Beatles/British Invasion) occurs and musical apathy is replaced by something the masses really want…..When people hear something that they really like…..The BUY IT!
Regarding “Piracy” – I think of the “war on record piracy, as I do the War On Drugs….If people really wanted to stop it…they would……Which is mirrored on the internet, as all the major providers know who these sites are and would close them down by literally in many cases “flipping a switch”…But they don’t ! …..Morris Levy and Ahmet and others in the early days had the remedy to solve it….and it worked
Do you really think developing acts would be better off if there was no streaming? Who would buy their music, and/or where would they hear it? Certainly not radio. I don’t think there is musical apathy. I think music is as popular as ever. One reason why piracy even took off. You don’t bother stealing something you’re not interested in. And the indie scene grew because piracy gave everyone access, for better or worse.
I’ve said this a billion times on here, but the streaming to would-be-buys is nowhere near a 1-1 ratio. At this point, doing the math, maybe 10% of the fans buying music is more money than 100% streaming. Which yes, is bad, but look at the long-term. Would you rather have 100 fans or 1000? This is the dilemma with streaming and too many people make it this black and white issue.
Yes, I would like to see that as well.
How much of the decline is attributed to piracy?
How much to other factors, like unbundling of tracks from the album, competition from other media like video games, etc?
I’m still holding out hope for ringtones!
That’s funny, but you might be surprised at the residual value of ringtones. I think I remember looking it up maybe two years ago and being shocked. It was I still think in the hundreds of millions.
Just looked it up. 2013 ringtone/ringback revenues in the US alone were nearly $100 million ($97.6 million). Enough for a few scrappy players to make some scratch maybe?
Ugh…Soulja Boy. Wasn’t he the top ringtone for a year or something?
I’m sure I have spent over $50,000 on music over my life so far, as a collector, for gifts, and as a DJ. I have never spent one cent on a ringtone. Those are simply annoying irritants to everyone around.
It looks like RIAA is preparing to depart from planet Earth. All those depressing reports showing the end of RECORDING income sound like some kind of grand finale activity before closing the doors!
At least they should change the name to say LIAA. (The Lost Industry Association of America)
I wish they would answer the emails or return the phone calls from folks who what to help them.
RIAAs only mistake was that they stopped suing the thieves.
Show me another industry that stops suing shoplifters because — wait for it — the shoplifters complain!
I’ve never been able to figure out why they stopped. What were they thinking? What was the rationale? Did they ever state a reason publicly?
I’m guessing PR.
jurisdiction is another one. messy laws is another one. the cost of enforcement is another one.
at least that’s what i would guess anyways, i know nothing, simple man, uneducated being…
Nah, GGG is right.
They just wanted to be popular among convicted criminals, for reasons that will remain unknown forever, and we all know how that turned out.
All they need is sue Shazam, Google, Sounhound, Gracenote and few other music and lyric ID services.
It is not late and exactly those few entities are responsible for music being spilled and mixed with manure.
They are far for even current fair use doctrine, the actively search music data base, collect all new tunes, store the data, process someone’s PRIVATE data, without any PERMISSION and divulge the information to freeloading music loving WACKOS! There he’s to be attorney willing an able to twist interpretation of “fair use”
In digital era name of the tune means the uncontrolled ownership and it means that Shazam or Google is participating in common crime call THEFT.
The other option is to get new “fair use statue”.
Agreed. That should resume. I am all for an approach like that of Japan (is it true?) of jail time for thieves, although I believe fines are more effective, would be used to compensate music creators and rights holders for lost income, and would prevent even more jail crowding.
The PR disaster came from the excessive amounts of the fines and the perception of “selective enforcement”. That latter selective enforcement is effectively almost no enforcement, since the chances of getting caught were so low.
Red and purple bars can double in 12 months if we switch to Discovery Moment Monetization converting Radio and streaming to discovery based music stores. By 2020 red and purple would be two times roller than 1999 CD BLUE.
For one, you seem to have no clue whats going.
For two, you fail to realize its just another service industry, people want convenience and people want options.
For three, if yall wanna get on the Clausewitz methods, you really gotta step up your games to seriously much higher levels.
If you have no idea what i mean when i say Clausewitz methods, then don’t worry bout it.
For four, lets see now, naw i wont even go there. Good luck on that, i certainly wouldnt want to see that happen.
Thanks for interest in my not so English note.
…”people want convenience and people want options” NEVER, EVER if it means giving away your property.
There would be no farmers or food to sustain our civilization!
Current methods of music distribution are just giveaway. The nature of digital music and digital environment
makes you an owner the minute you know the name of the tune. Therefore we need legal revisions criminalizing Shazam”s or Google’s music or lyric ID current modes. They are just trespassing someone’s
private property, sort thru it and give it away to strangers with “little price tag” $1.29 @ iTunes or GooglePlay.
Walmart also has price tags but their sales associates do not have name Shazam or Gracenote and they do not cary goods in virtual shopping cart to your car on the parking lot.
Last, my business solution for music can be implemented only by the top of the top. Trigger can be pulled at the most by ten folks for this moonshot to become $100B music industry. Larry Page to be #1 on this list.Tim Cook or Jeff Bezos have a chance too then we need multiple shooters out 10 to kill current status quo!
I read your blog entry, where you actually put enough information for me to figure out what you’re talking about.
You are a crazy person who has decided that no one should ever hear a song twice without paying to own it.
I am incredibly glad that your mad scientist style idea will never happen, because I wouldn’t want any part of it.
Welcome to pure communism.
I hope, it will materialize for you in music business, sorry music commune!
I understand you love Shazam and their service. Again, just to be fair, if you want to listen to a tune again at any place or at any time you SHOULD PAY!
Must we go through this again?
This information does *not* represent the music industry. It represents the *record* industry.
It’s not the same.
Right, we forgot t-shirts — the only way to finance touring and tracking.
Yea! Fuck other ways of bringing in money! Fuck tshirts your fans want! Fuck posters your fans want! Fuck sync deals people want to give you money for! Fuck every penny if it doesn’t come from a mechanical royalty!
Well, let me moderate that a bit: Merchandise is not a problem. In fact, it can be perfectly good fun for everybody. It has always been around, and it’ll never go away.
It’s just not related to the industry; it won’t save the industry, and it shouldn’t be discussed when we’re looking for the next business model.
If merchandise had any value in itself, all the tech companies would make money from it. But it doesn’t, so they don’t.
Music comes first. Stars come first. Without them, there’s no merchandise. Merchandise is extra.
It’s not extra unless you treat it that way. People are selling themselves as artists now. At least, the ones that are smart and will have career longevity are. You (I think it’s you, but maybe it’s another anon) are anti-major label now, right? Although when starting out unless you have an angel investor, it can be tough, but nowadays there are no barriers of entry left except fans. You can do everything yourself for cheap or free. So why does it matter where the money comes from? You’re monetizing yourself, the artist, for your career, as an artist. If you make your money selling merch or selling records or making YT videos, what does it matter? You have a career.
“So why does it matter where the money comes from?”
Because the most talented artists can be turned into t-shirt sellers in no time, and it’s just such a pity. There’s only so much time, and it takes forever to learn what you need to know. It makes me sick to watch people waste that time on wet merchandise dreams.
Merchandise may be relevant when you have/are a brand. It’s just not a link in the chain, not a solution to any problem. It’s the icing, not the cake.
You still need to create good music that people love for them to even give a shit about you. There is no difference if you make $50K selling records or selling tshirts. Nobody buys a tshirt from a band they don’t like or because they were pitched well. And I have never seen someone spend any more time selling tshirts than a Facebook post, which half the time is done by management anyway. You really overestimate how much time/effort bands put into hocking their non-musical stuff.
fuck i had a lotta fun designing t-shirts man, getting a shirt press, learning to silk screen, building a little dark room under the stairs, man all that was tons of fun…
Not sure if you’re being sarcastic or not, but yea, you can make cool tshirts. Find some artist to design a cool one. Not sure why people think selling tshirts means like bootleg tie-dye parking lot shirts. Not to mention, people WANT tshirts. People LIKE wearing band tshirts. They are in demand so why complain about them?
Guy not being sarcastic at all.
Its just another creative outlet, lost of fun if you let it be. Overall its just an extension of the brand and best of all, its walking advertising that people actually pay you to wear around.
That’s why i dont really ever buy any clothes that have someone elses brand or logo on it, cause i mean, i should be being paid to wear it, especially with my show.
We got some of the best shirts around, we just dont have the fans to buy them, well we used to have the coolest shirts around, not making them anymore which is a shame, but never the less…
if you mean me??? as in JM, then no that was not me… not assuming you mean me or even know who i am, but just in case my anon posting is getting cluttered and confused with other people i thought i would say so.
if you want to know my real intentions and beliefs, just hit me with an email bro…
if you thinkin me bro, as in ya know, me, then no, that was not me.
i linked an email if you wanted to know what my true intentions and beliefs are, but it didnt seem to post or at least hasnt yet…
there needs to be a delete or edit mode here, now i look like a dick, cause i forgot to back slash before the other strong…
it was supposed to be me and not all the way bold… cant be bold all the time but sometimes you gotta be bold but not always bold when you’re being bold sometimes italic when bold but its not bold its italic but then sometimes when you bold you are bold otherwise sometimes its not, if you know what i mean…
“there needs to be a delete or edit mode here”
I think there is — if you log in with your facebook. Highly recommended, btw: Two Anonymous’es obsessed with formatting = unbearable.
Naw dog, i ain’t playing that social game… Well i’m on that twitter, but mostly just to testify and run my show, fuck trying to get followers, im busy leading myself not trying to lead a bunch of people around, not being paid for that…
Record industry revenues for most of American history: zero.
I’m pretty sure this doesn’t include the huge upfront licensing fees the majors are now getting for their catalogues from the streaming services. Which is its own issue, obviously, since the artists don’t see any of it.
It also doesn’t include live revenue. The Music Industry Blog site recently estimated global music revenue was down only 3% over the 2000-2013 period. Most of the offset in collapsing recording revenue came from rising ticket sales, with a small bump in merch. Again, I get that it’s not an ideal solution for many acts that don’t want to tour constantly.
While piracy must have had an impact on sales it’s just one amongst many contributory factors to the decline in consumer spending on recorded music over the peak/decline period at the turn of the millennia. While inflation-adjsuted disposable income (as a % of total after-tax pay) has remained relatively stable (expect for the 1%) over this period, other consumer sectors arose to bite into the available entertainment income.
Other physical media platforms seemed to fare a lot better despite a more modest start:
DVD peaked at $20 billion in 2006
Gaming peaked at $17.1 billion in 2010
They clearly stole some of the attention away from recorded music in terms of consumer priorities and the value proposition.
This graph is telling us that 15 years people are consumindo less music? No! This graph is only showing The consumption of medias over the time.
The music production And industry has changed a lot over The years, And nowadays indepent bands And artists are producing there albuns at home And their public can download it for free in internet legally, its an ópticos of The artist.
I dont Think The number of albuns released And lanched is lower than in The past, i Think it has only changed its model.
Musical piracy has always been around. Not new. Half my tape collection in the 80s was made from copying onto blank tapes. Furthermore – there has always been great music, since long before the industry had a medium to sell it on. If the entire music industry collapsed and there was not a single distribution channel to buy from, you’d just go down to the local coffee shop and buy a record from the amazing DJ/Musician there.
The money went in the pockets of US and North European oligarchs and neonazis:
Well, at least it’s Northern European Nazis and not Illinois Nazis, I HATE Illinois Nazis!
Lots of interesting comments
Quote “Interesting to see that streaming failed and we still have to rely on record sales ”
We must be looking at two different graphs..
interesting that you say “record”
I look at 1981, a period when “piracy” only happened with a cassette tape,
and then I look at 2011, where we know piracy is rampant (if there was a chart on piracy it would dwarf the other formats)
and i have to think streaming is a good thing.
cause besides some weird draconian laws to prevent piracy completely, or changing how music artists make money
the only other thing the industry can do to stop the hemorrhaging is to change the format..
and that new format is streaming (I personally believe a type of all in one video/picture/audio format would have also worked but thats another story)
will it ever amount to the revenue of CD’s? I dont think ANY format will be able to do that again
Quote “The digital download is an antiquated concept. Having a song on a local drive versus streaming ”
There is no such thing as 100% connected internet, most streaming formats have a “cache” option which in essence is no different then a download.. the big difference is the ownership.. paid downloads you “owned the song until you deleted it, with streaming they can pull that song and change format at a whim”
its how people “own” songs thats antiquated, we are now in the leasing business..
Quote “It would be interesting to see a different format plotted against that chart: the video game ”
now THAT would be interesting.. and I personally think it would show a possible “next format” after streaming..
the “App album”
Quote “This information does *not* represent the music industry. It represents the *record* industry. ”
Quote “It would be interesting to see a different format plotted against that chart: the video game ”
now THAT would be interesting.. and I personally think it would show a possible “next format” after streaming..
the “App album”
I don’t think there will be a format after streaming, if you can even call it a format. Streaming basically means “the internet.” Websites are essentially streaming information. The internet is the stream. The format, in Spotify’s case, is OGG. The next format after that may be FLAC, but that’s inconsequential to the user… they never interact with the actual file, only the interface. Format is over & done with, now it’s just a matter of what software you prefer.
But the rest of your comment touches on a really important point. While the music industry has made every attempt to tie itself to the technological dark ages, companies like Microsoft & Sony & Steam & Apple & Google have been going full steam ahead, & for their efforts, they’ve all significantly grown their share of the entertainment dollar.
Consider this… Sony ruled portable music with the Walkman. They were edged out by Apple, so they moved their focus towards video games & home theater. Now iPod sales are tanking, & Apple seems to be moving its focus to iOS apps. Who is making a dedicated music device now? iPod Nano is basically a workout accessory, & iPod Touch is the iPhone for kids. Zune failed. If you really want an idea of consumer demand, you have to look at hardware. And hardware paints a picture of music as a sideshow… there are no dedicated music devices outside of niche players like the Pono.
In the ’90s, you didn’t have smart phones. You didn’t have apps. You didn’t have XBox Live or the Playstation Store. You didn’t have the Steam store. You didn’t have Amazon or iTunes or a host of other services that offer entertainment at the click of a mouse & are making a killing. You didn’t have WhatsApp or Instagram or Twitter. And the most arrogant thing anyone could possibly say is, “these companies wouldn’t be making a killing if music piracy wasn’t possible!” That’s just wrong, & completely out of touch. But that seems to be the industry’s stance. If anything, piracy gives us a misleading sense of demand for music. I think the idea that “there’s obviously more demand for music than ever!” is actually false, because other industries have crept into the entertainment sector & made room for themselves, the economy is still in a recession for the 99% of us & you simply can’t grow the attention pie outside of population growth, which isn’t enough to offset the changes.
Music is no longer top shelf entertainment. You no longer stand in line for music. Which is part of why streaming makes so much sense, because you don’t have to think about it. You use it more just because it’s there, when you wouldn’t make the effort to go out & by the music, or even pull up iTunes & buy it. That’s just where music is at right now.
And music isn’t alone, this is the case across all “old media.” And while piracy plays a small part, the big picture is media fragmentation, & the internet’s tendency to push people towards self and social, rather than towards commercial products.
My def. of a “format” is probably a tad different then yours.. VS a ‘codec’ which is the platform of ‘how’ the music is transmitted..
This is just my ‘view’ of it.. nothing scientific or factual
Streaming is about to cross $2 billion in the USA this year
2012 Streaming Revenue: $1.0328 billion USD (up 59%) source RIAA
2013 Streaming Revenue: $1.439 billion USD (up 39.3%) source RIAA
2014 Streaming Revenue projection: $2 billion
What seems odd to me is that this is billed as the “music industry” – as if live concerts, publishing, sponsorships, and videos are not really important. This is a graph about the sale of recordings and the mediums that were popular over the past 40 years. All good and important. But it is not the ‘music industry’ it is the sale of recorded music. If you take an even longer view and look at the roughly 75 million recordings that were sold in 1928 and then compare them with the roughly 5 million that were sold in 1932 you get another perspective on the cycles in the sale of recorded music. But to get a view of the ‘music industry’ in that period you have to include the introduction of network radio (the internet revolution of the day – you bought the radio and the music was free) plus the rise of the concert business thanks to loudspeaker systems (primitive as they were) — you get the first big “festival” in New York in the 30s — then you look at the development of festivals from Newport Jazz in the 50s to the present and you are actually starting to look at the “music industry.” From there you have to add in publishing. The current snapshot of streaming only relates to recorded music (the sale of masters — or the theft of masters — or the streaming of masters) and this is a total subset of the ‘music industry.’ So my suggestion is that we (DMN) all stop confusing the issue. SoundScan and the RIAA only track a limited part of our industry…as of 2012 (according to Forbes) the concert business revenue was greater than the revenue from sale of recordings – and that trend is continuing. There were only 13 “albums” that sold 1-million copies or more in 2013. Sorry if I sound repetitive but I’ve just grown really tired of recorded music as the center of the business – it’s not and has not been for two years. It’s going to take some time before we see how this all breaks out –and it will keep changing.
Professor, that’s one of the many reasons I love you so much LOL. Tightly said my friend.
As a 30+ yr media and music industry professional myself, with teenage grandchildren, here’s an observation. Today, kids use spotify etc (free) as we used terrestrial radio 1970-2010. They use YouTube (free) as we used television. Phablets will soon replace tablets and smartphones … until the next new technology comes along.
Not a single one of my grandchildren, or their friends, OWN a single piece of product that contains music or video content – that’s something their parents and grandparents do. They own tablets, smartphones, laptops, and other modern communication technologies, as we did when we were teenagers.
I’m not saying ALL kids are this way, but only those I know personally.
Increasingly, the Internet is the skyway by which “radio” and “tv” are transmitted, as airwaves was the means by which radio and television have been transmitted. Soon, there will be no airwaves used for transmission – only the Internet, the skyway, the cloud.
Recordings will still be made. Will they be made and sold using the same tools? No. The conveyance technologies will continue to change. The marketplace will change. We don’t go to the physical store anymore. Today Walmart delivers. Everything changes – all the time – it’s the constant variable.
What the graph shows is changes in technology and how the marketplace has embraced those changing technologies. It shows the stranglehold / the ownership of the means of delivery has changed.
Streaming is here folks. Complain all you want. All you’re going to get is agita. Adapt or die, right? Learn to play the game, as the rules change underfoot. Some who do will win, some who do will lose. BUT all who DON’T … well … you get the drift.
Oh, and PS, how many of us are actually engaged in the process of change? Hmmm.
Music as a commodity has been de valued by the computer, and the creative bar lowered to infantile by sampling. Music creation is NOT for everyone.
The music industry has taken a huge downfall,,,which means that unless your touring a lot, or get your songs in a movies or commercials, it tough to make any real money! I wish the internet can develop a way to gain control the internet and allow artists/bands to reap decent money and make a living being an artist/band and without all the red tape! It can be done…but many have to get on board to make it happen! More regulation needs to be put in place to make it happen!
I just don’t get how anyone who looks at this graph can deny that technology, in one form or another, is shrinking the recorded music industry as a whole.
releasing only on an album might be a smart play…. Digital format IS the problem… Do easy to steal, too easy to convert to format… Piracy was not a problem when piracy was recording songs off an album on to your tape cassette.
Do you understand that ANY format can easily be converted to digital ? I converted all my vinyls to digital so I can import them in my iPod. No issue.
Converting to digital from vinyl, especially for a large collection, is too labor-intensive for most, and believe it or not, beyond the technical knowledge of many.
You need only 1 guy putting the album on a torrent and it’s game over. Not a problem at all…
If there was any way to filter out 80s-90s-00s CD sales of people who bought music they already bought, that might help explain that the sales boom of boomers buying 3rd copies of stuff – well, it’s dead, Jim.
The CD was the introduction of a universal, good-sounding, robust and CONVENIENT format.
iTunes was allowed to offer DRM and 128K AAC. Derp.
Enforce the laws against piracy. If other forms of illegality can be screened from the Internet, then so can piracy.
The tides of fortune for music creators could change dramatically with fair, reasonable, consistent enforcement against piracy. Human behavior is malleable; what was once considered socially acceptable can very quickly become anathema, whether the issue is slavery, racism, smoking in public establishments, or stealing – sorry, “sharing” – a musician’s livelihood while claiming to be a “fan”.
Just like Japan did, to see sales drop right after ?
As if piracy was the problem…
People spend less on music than they used to, that much is true. But is less money spent overall in the entertainment industry? No! The focus of spending has merely shifted to other media. People spend more for movies, games, tech, etc than they used to and that is bound to take a bite out of music sales.
If a CD with a soundtrack costs more than a Blu-Ray of the movie that soundtrack is from, you create a recipe for people realizing your product is overpriced and they turn away. And why buy music nowadays when you can rent it?
I had another thought on this last night..
One of the things that changed in the “formats”
(P.S.: when I say formats you can also say ‘medium’ I’m just lumping all streaming together and calling it a format like a record or a cassette.. kinda like AM/FM is two different parts of the ‘Radio Format’)
Everyone keeps on saying that
“music has been devalued”
like that means something..
I’m not arguing that it hasn’t been devalued, I’m just saying the cause is not simple, and that it could be argued that if music can be devalued, it can also be overvalued at one point..
AKA like a housing or tech stock bubble..
when was this overvaluation?
during the CD period..
Because of the promise of permanent ownership..
with cassettes and LP’s that was never promised.. You knew with those formats that any music you bought would at some point wear out.. it had an inherent max amount of spins..
CD’s changed that..
just a weird thought I had..
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