The End of Ownership: Material Gives Way to the Ephemeral

Here we are living through social distancing. Living through a period when we interact with people, primarily, unless those people are part of a small group we are confident of, via Zoom or Teams or from behind a mask, ideally six or more feet away. Masks and sweatpants have become increasingly important to people, the former because of the need to go out and the latter because somehow the “office” is something that is only evident from the waist up.

And when we have to encounter surfaces, there is a frantic look around for some means by which the object is sanitized or our hands are. Or both.

If we need stuff—like, say, food—then it isn’t a matter of just going down the street to the local bodega or hopping in the car and buzzing over to the supermarket. It is something that is carefully planned and executed. And while time has dulled the edge of the potential virus, there is still some hesitation regarding whether the objects should be brought in to the kitchen right away or whether those cans, boxes and bags should be permitted to settle for a period of time.

The material has become suspect.

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But it wasn’t COVID-19 that had the effect on the music industry in the U.S. that is unfolding. It seems that people have decided that when it comes to music, most are not particularly interested in any sort of ownership. The transient is sufficient. And when the numbers for 2020 are calculated, odds are that what occurred in 2019 will be nothing if not magnified.

In a report from the Recording Industry Association of America for overall economics of 2019, the trade group found “Total revenues from streaming music grew 19.9% to $8.8 billion in 2019, accounting for 79.5% of all recorded music revenues.”

And more telling: “The streaming market alone in 2019 was larger than the entire U.S. recorded market just 2 years ago in 2017.”

The biggest chunk of the monies in 2019 streaming were for subscription services, accounting for $6.8 billion. That in itself is 61% of total recorded music revenues.

While the growth in streaming services—increasing revenue by 25% compared to 2018 numbers—was certainly significant, there was a real but somewhat subtle decline in “digital and customized radio services” (e.g., SiriusXM and internet radio), down 4% compared to 2018. If one thing goes up 25% and the other down 4%, it is clear that the dynamic is in place: gravity is going to keep that decline going. SiriusXM isn’t flogging its app for any other reason than its acknowledged need to have more commitment than the three-month trials that many new cars come with.

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What is perhaps most interesting in all of this is what is happening vis-à-vis ownership vs. listenership, with the latter being the salient characteristic of streaming.

According to the RIAA, “Total revenues from digitally downloaded music were down 18% to $856 million, marking the first time since 2006 that revenues from downloaded tracks and albums fell below $1 billion.”

To provide context to 2006: that was the year of such cuts as “Crazy” by Gnarls Barkley and “Dani California” by the Red Hot Chili Peppers. And on February 22, not long into the year, the billionth song was downloaded on iTunes, “Speed of Sound” by Coldplay. Seems like even a longer time ago, doesn’t it?

Consider: in 2015 download revenues (consisting of albums, tracks and, yes, ringtones and such) were $2.3 billion. And it was a stair-step down to the $856 million of 2019.

Then there are the objects themselves that contain music: discs. The good news is that the sales of physical media were down just 0.6% in 2019. Yet at a total of $1.15 billion, discs account for just 4.5% of total revenues.

And were it not for the renewed fascination with vinyl, things would have been much bleaker for that category, as vinyl sales were up 19%, accounting for $504 million, while CD revenues were down 12%, to $615 million.

Think about that for a moment: physical media, $1.15 billion; owned music downloaded, $856 million; streaming, $8.8 billion.

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One of the things that always puzzled me was the comedy album. You listen to the disc a couple times and after that there is no surprise. And a surprise is a key part of a joke. So what is the likelihood that there will be a fourth or fifth replay?

Music, on the other hand, is different inasmuch as each time you listen to a piece your conditions are different so that you are likely to “hear” it a different way, even though you may have it so embedded in your synapses that were there to be even the most minuscule change (e.g., imagine that someone snuck in and replaced your disc with another one that was exactly the same except for a few notes difference) you’d know it was off. You could play a music disc 100 times and each time would bring variance.

And then there is the act of physical ownership, the decision that this one needs to be owned, needs to become part of a collection, needs to be something that is seen.

This isn’t an issue of spending money, because the RIAA numbers show that recorded music revenues were up 13% in 2019, to $11.1 billion.

No, people are spending a lot for music. They evidently just don’t want to have it.

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U.S. Recorded Music Revenues by Format, 1973 to 2019

4 thoughts on “The End of Ownership: Material Gives Way to the Ephemeral”

  1. You make a lot of interesting points (as always, Mr. Mac). For me, I understand the all-too-potentially-temporary status of content that’s on streaming services. Let’s say I’m a fan of Pete Wurst and the Shitty Beetles. At the indie level, Pete self-releases four albums worth of material over five years, and amasses a following of a couple thousand die-hard fans. Then, after a near-fatal recreational ingestion of brown acid and methamphetamines, Pete has a come-to-Jesus moment, becomes an earnest convert to Pastafarianism and declares that his band’s existing back catalog is “sinful” and “immoral” in his eyes. He orders all of the band’s music removed for sale and streaming, and in a calculated PR stunt for the cameras, destroys all of the band’s remaining unsold CDs. Case closed, Pete does his best to erase his previous band from the history books in order to pursue a virtuous carb-heavy Pastafarian lifestyle in the wilds of Yukon Territory.

    But what about people who still are fans of the music? If they didn’t get a chance to buy those CDs or download those tracks while they could, they could have a really tough time obtaining it (which admittedly is Pete Wurst’s goal). That isn’t fair to fans of shitty-beetle music.

    To that point, I try the best I can to get physical media for as much of the music that I like as possible. I don’t want the caprices of Pastafarianism getting in the way of my appreciation for shitty music!!!!

    1. Even if Pete Wurst didn’t have a sudden conversion there is a good chance that his label will go out of business, leaving the ownership of his recordings in dubious legal territory. Or Pete’s label gets purchased by a big label who sees no financial incentive to put his meager recordings up on streaming services. This happens all the time. And not just to super obscure recordings.

      Here is a small list of things I’ve noticed are not available on streaming services:

      Da Lench Mob – Guerillas in tha Mist (East West, 1992)
      Curtis Knight with Jimi Hendrix – Flashing (Capitol, 1968)
      Forest for the Trees – self-titled (Dreamworks, 1997)
      Jerry Jeff Walker – self-titled (Decca, 1972)
      Funkadelic – Hardcore Jollies (Warner Bros, 1976)
      Funkadelic – One Nation Under a Groove (Warner Bros, 1978)
      Funkadelic – Uncle Jam Wants You (Warner Bros, 1979)
      Mos Def – The Ecstatic (Downtown, 2009)
      Olivia Newton-John – “I Honestly Love You” (EMI, 1974)
      Doctor & the Medics – “Burn” (IRS, 1986)
      The Cure – “Killing an Arab” (Fiction/Elektra, 1979)

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