The album bundles 10 or more tracks; the single is a one-off. Which means ‘cherry-picking,’ and far smaller per-consumer purchase bundles.
And, a very basic reason why the recording industry (and broader industry) is in such deep trouble. Blame Napster, blame the MP3, blame the internet, blame whomever you’d like, but here’s what the last ten years have looked like.
The following comparison is between paid a-la-carte singles – purchased on places like the iTunes Store, and every album format put together (CD, LP, and digital album download). The data comes from the RIAA – first for units, then revenue on those units.
I. Units, 2001-2011 (US)
II. Revenue, 2001-2011 (US)
Is this saying that downloads of singles generated revenue of ~$175M in 2011? That seems light. If there were ~1.3B paid singles downloaded last year (looking at your first graph), that’s $0.135 per track.
The math for album revenue doesn’t seem right either. Approx. $1.25 per album?
Mark,
No, it is not saying that. Figures are in millions, so the 2011 figure is actually $1.492 billion. So on sales of approx. 1.3 bln tracks, that is a bit more than $1 per track.
/paul
oh lord… did anyone notice the sharp decline in album sales PRIOR to the ala carte single… maybe this has more to do with it…
http://digitalmusicnews.com/stories/100211broadband
That’s a really good observation. Worth noting for sure.
right. the lurking ‘elephant in this graph’ is illegal file-swapping, which of course is fueled by fatter pipes.
Should be noted that CDs are still more than digital singles + albums combined.
This article at Paste Magazine and this article from the Guardian seem to imply that digital downloads have overtaken CD sales in the US, at least.
Add to this the beautiful ringtone rip-off that accelerated the fall of the single perceived value… Shit happens…
Julien
iTunes killed the album star
Lazy and greedy A&R’s killed the industry, or nearly killed it. Singles were a cheap and quick turnaround while they kicked back money on everything else from studio bookings to indy radio promoters, down to art work.
The kickbacking A&R’s are to blame for many things, but these are “learned habits’ afterall no?
nonesense. this is about piracy, pure and simple. this is fantastic commentary by yet ANOTHER pissed off artist…
http://zackhemsey.blogspot.com/2012/03/real-issue-of-online-piracy-and-illegal.html
Piracy is in the DNA of this business.
When music companies covertly sold oodles of cutouts at bargain prices to avoid paying royalties that was piracy.
When assistant engineers sold copies of masters to bootleggers that was piracy.
When promo people sold bunches of promo copies instead of using them to properly “promote” the artist that was piracy.
When labels use fraudulent accounting methods to hide sales of product that was piracy.
When a&r people signed artists for cocaine and sexual favors (or because they knew the manager or lawyer) over artistic merit that was a form of piracy as they stole opportunity from one act and gave to another.
When a&r people took meetings with artists and writers so that they could steal ideas and give to pet writer/producers that was piracy.
When label negotiators claimed that an unrepresented artist should sign “this standard contract” and you don’t really need a lawyer, that was piracy.
When labels pressed more copies than they had a reasonable expectation of selling so that they could keep the pressing and distribution apparatus humming that was piracy.
The difference in the digital era is that the spoils are more diffuse. Instead of a few pirates, creeps, theives and con artists getting rich off the spoils consumers are getting to hear the music they like.
See Weird Al Yankovic story on this website or see Eminem digital accounting lawsuit as examples of systemic piracy.
Read Tommy James’ autobio. Read Hit Men. Read the history of independent radio promo. Do some homework.
I fail to see the relevance of your post as a response. It’s the age old apples and oranges comparison where someone blames the old schoool record companies for the consumer’s right to steal music. I read “Hit Men.” That doesn’t have any import to this issue. Do your own fucking homework.
@BS: It might be cognitive dissonance on your part.
But it might also be that you fail to recognize the relevance because the stench from your filthy mouth clouds your vision. Stealing is stealing whether by execs in the biz or consumers on the outside. The hypocrisy of thieves complaining about stealng is classic and I am not surprised that you do not get it.
That is why your business is dead. Because the likes of you do not get it. Assuming of course that you are in the business. Or were…
AGREED.
For the record, music executives always knew you could not sustain a record label selling singles at $0.99 retail. That is why when they were being sold they were at least $2.49 retail.
Complete nonsense.
I’ll admit there was an industry need to sell MORE than just singles when the labels had to operate pressing plants, distribution networks, large order processing systems and staffs, including returns.
And all of that has dwindled to a minscule part of the business. For the industry to bitch and moan about not making money when a massive amount of overhead has been removed is laughable.
Maybe people just wanted to buy singles in the first place.
I blame Apple.
Scary ‘music is in the shit graph’ time.
The demographic that buys “Albums” is moving to retirement on fixed incomes. They don’t have the dispoable cash to buy another remix of Dark Side of the Moon.
This article on Ultimate Guitar last year made the same conclusions based on US music revenue up to 2009:
http://www.ultimate-guitar.com/news/industry_news/how_legal_downloads_are_killing_music_revenue.html
And impacts touring too…
Finally.
Some perspective on the role of “piracy” as the alleged primary cause of music industry demise. Not true.
Note to musicians: We love your work, but not all of it. that doesnt make us bad fans….
Singles did not kill this business, creeps did.
The only thing killed by the current marketplace is the system of middlemen sucking dollars out of what should have been a viable relationship between artists and music lovers. There are thousands of micro-labels worldwide pressing just enough copies of CD/LPs to meet demand and selling unlimited numbers of digital downloads with no manufacturing costs. These labels make enough profit to support a few music-loving employees who are often artists themselves and pay a fair share to the artists on the label. They often also record for each others labels. These “businesses of love” know their customers and give them what they want. They do not press more copies than the market demands because they do not own pressing plants and do not have to fill unneeded distribution pipelines. They don’t have to overpay executives who add much less value than their salaries should require. There is not enough money in this new equation to support sharks and thieves and con artists so the creeps stay away. It is a breath of fresh air and a wonderful change from the past.
If the current marketplace correction chases the sharks and theives and con artists into other businesses it will be a very good thing for makers of music and the people who love their work. If all parties to a deal can achieve a big score then all power to them. But the days of one side cashing in while the other side, usually the artists and the interns, getting screwed should be over. And if, in the mistaken belief that you are going to get rich, you sign an old media deals with those creeps then you deserve what you get, or what you don’t get.
The entrepreneurs who made the now dying music business knew what a pyramid scheme it was and got out years ago. Money managers used other people’s money to buy stocks in these companies and took incredible fees out of the eco system just as the artist managers/agents/lawyers and other gross participants got paid before their artists did. Today vulture capitalists cum technoplogists are squeezing the blood out of the stone as the artists are STILL not getting paid.
Singles did not kill this business, creeps did. And good riddance.
no one in the music business wanted to sell every song as a single indefinitely and for only $0.99. but since when itunes launched in 2003 they were available for free and w/o DRM, was the answer to not license itunes and insist on selling albums?
ubiquitious piracy killed the album and along with it much of the recorded music revenue. i honestly feel that if the labels agressivley got out in front and offered in 2000 a tiered model of 8 songs or 1 album for 10 bucks/month with higher prices getting lower per track fees, they might have headed it off. but come on, there was no choice but to make singles readily available. no one shoudl think there was a better option by the time 2003 rolled around.
I believe there are advantages and disadvantages with the sales of singles for both artists and labels. Being a label owner, I’m well aware of the risks of selling just singles as opposed to the entire albums, however, also being an artist it provides a strategic marketing method to give fans the choice to pick and choose what songs they want to buy. More often than not, fans are disappointed when buying albums because they weren’t as good of an album as they thought and feel as if they wasted money. Now in the perspective of labels, it can be a complete success or a major disaster financially, depending on…well..if it’s worth buying or not. Truthfully though, I feel the MAJOR cause of decline in album sales is the content and concepts the albums carry these days…there’s not much originality only repitition, and quite frankly when you hear something over and over it gets old really quick to the point of complete loss of interest.
If you’re in the business of music, you ought to make yourself an expert on the ways music can be distributed. There’s just no two ways about it… the ineptitude of those in charge, missing the transition to digital & providing no comparable alternative to illegal file sharing is what put the industry out of step with consumers & began the decline. Why no one thought to offer Shawn Fanning seven figures to explain what was happening to the people who needed to know is beyond me. It would’ve been a “steal.” Ten years later Doug Morris was still complaining, “But we aren’t technologists!” Well no shit, Sherlock… but neither were the masses downloading songs. You don’t need a degree from MIT to understand Napster.
I realize that everyone’s trying to put food on the table & everyone needs to vent every once in a while, but this revisioning ought to stop at some point if these graphs are ever going to change. It’s like blaming an iceberg for the sinking of the Titanic. As if that communist iceberg stood it’s ground because it wanted all the booty contained therein for it’s iceberg self. We should all go see the film in 3d & reflect on what actually happened back at the turn of the century, & how we can learn lessons for going forward. You’ve just gotta keep your fucking eyes peeled, that’s all.
Did anyone stop to consider that the music business itself has “killed” music sales by its grossly inferior outpouring of what passes for music these days? Not to mention the record execs themselves who are only interested in what they can market – ie. who looks good and can be shoved down the throats of tweens with tone deaf ears.
“Songs” these days have fewer words than a Dr. Seuss book and absolutely no melody – slap together a bass beat and about 12 words and they call it a song. It’s no wonder music sales are tanking.
Like I haven’t been saying this for 10 years. It’s the 1950s all over again.
Record companies killed the record business pre-Internet by limiting the supply of singles thus forcing consumers to buy albums containing crap filler tracks in order to obtain the one or two tracks they heard on radio.
Absolutely!
good read
Is this right?
This is simple math, before digital, you had to buy all the songs on an album. Now that singles are available, people tend to buy the songs they like, on average 1 to 3. If theres 10 songs on a CD, and you only want 2 of them, they just lost 80% of revenue.
If I was Spotify, I would refuse to pay most of my catalogue artists and only “sign” the ones I thought would generate subscribers for me. The truth is that 80% of spotify streams come from around 100 artists. So in a real business world only the actual subscription motivators should be paid. That would be a great !”#$filter and bing us back to the days where being heard was something you needed to deserve.
I would love to know where you got those numbers from. I don’t know anyone who would pay for access to the catalog of 100 artists.
The reason file sharing took off, the reason that iPods flew off the shelf, is that consumers wanted more, more, more. And the reason that Spotify works (or will eventually work) is that it offers (more or less) all of the songs that piracy offers & values them according to how much they get played. It practically renders piracy obsolete.
Any model or idea that includes the phrase “back to the days where…” is WRONG WRONG WRONG.
Those numbers applied to napster as well BTW. they also apply to Bittorrents. They come from the horses mouth. I am surprised that any industry insider does not already know this. The top 100 artists naturally change over time, but nevertheless thats the state of affairs. They also apply to movie torrents and movie theaters. Any record store owner (mainstream) will tell you the same thing. its pretty clear to me that there is too much noise out there for anything decent and new to get heard. Filters through peers are not working well. We do not need endless amounts of music. we need to be able to find the quality not the quantity.
Albums only exist as a format because of the size constraints of the LP. People are just going back to the days of the 45. Phil Spector hated albums because they were mostly filler. So blame the music industry for wrapping a couple of decent songs with an hour’s worth of filler and charging $15+ to call it an album. The format can still sell if the whole product is good enough.
Actually, I would hope this would encourage artists to provide more variety to their albums. It used to be that a Beetles record would have Rock, a French Cabaret song, a show tune and a country song on the same album. Led Zeppelin could have a ballad (with recorders, yet) and a song accompanied only by mandolins with their signature power rock.
These days of corporate rock have talented bands producing albums withs 72 minutes of music with very little variety. I would love to hear Nickelback or Train’s take on a show tune. Rihanna singing a country tune? I’d love to hear it.
The Beatles, with the exception of a few concept albums, mostly released singles which were later compiled on albums.
What everyone here is failing to see is that there is an opportunity forming here. The demise of one model inherently gives birth to another. Rather than bitching and moaning about what has happened and who is to blame, I’d like to read about what is next. Look at Kid Rock: Sells his entire album for $3.99 on Amazon bc he doesn’t want to be told what he can and can’t do by apple. Sells out arenas. Has an enormously loyal fan base and doesn’t play by the rules the labels or Apple are trying to force. I think he’s worth paying attention to! What would all of you do if you controlled the future of the distribution of music? What’s the SOLUTION? We already know the problem!