The Wall Street Journal delineates the oncoming disaster for the music industry: Sales of Music, Long in Decline, Plunge Sharply.
Here are the important quotes:
• “compact-disc sales for the first three months of this year plunged 20% from a year earlier…”
• “CDs…still account for more than 85% of music sold…”
• “About 800 music stores, including Tower’s 89 locations, closed in 2006 alone.”
• “This year has already seen the two lowest-selling No. 1 albums since Nielsen SoundScan, which tracks music sales, was launched in 1991.” (Daughtry: 65,000 and Dreamgirls: 60,000)
• “As recently as 2005, there were many weeks when such tallies wouldn’t have been enough to crack the top 30 sellers.”
• “Digital sales of individual songs this year have risen 54% from a year earlier to 173.4 million… But that’s nowhere near enough to offset the 20% decline from a year ago in CD sales to 81.5 million units. Overall, sales of all music — digital and physical — are down 10% this year. And even including sales of ringtones, subscription services and other ‘ancillary’ goods, sales are still down 9%…”
• “Perhaps the biggest factor in the latest chapter of the music industry’s struggle is the shakeout among music retailers. As recently as a decade ago, specialty stores like Tower Records were must-shop destinations for fans looking for both big hits and older catalog titles. But retailers like Wal-Mart Stores Inc. and Best Buy Co. took away the hits business by undercutting the chains on price. Today such megaretailers represent about 65% of the retail market, up from 20% a decade ago…”
• “Best Buy has been quietly reducing the floor space it dedicates to music…”
Doomed! Doomed, I tell you!
So are we gonna be the generation who gets to witness the day the music dies? Or merely the music industry? And aside from the Big Five being casualties, does their death inadvertently take down indies as well?
Doom and gloom, indeed. The vultures, they be circlin’ overhead.
worst case scenario-for a career bands will have to play live and recorded music will be for serious artists doing it for the love of music or as promo for live spots?
On the topic of live music overtaking recorded music, I have a friend who is heavy into new jam bands, and I’ve learned a lot about this scene from him. Recorded CDs are virtually irrelevant to the whole genre; fans talk about and trade show exclusively. They rate and compare shows, argue about which was best, which had the best grooves, which got the fans moving the most. They NEVER talk about studio records; it’s as if they don’t exist. And this is for an entire genre of fans and artists. It’s very interesting and completely contrary to the standard rock music model, which has relied on studio recordings and supplemented these with occasional tours. Perhaps the new jam bands are paving the way for a broader swath of the industry.
What if the prize inside the box was really what you were paying for and the cereal was just to entice you into getting the doohickey?
That’s where it seems we’re heading with the music business.
This is what you get when motherfucking major labels ignore indie record stores and bed the big box. It became very clear during the holidays (the last time I visited Best Buy) that they were decreasing the square footage of pre-recorded music. So you mean to tell me that no one in the majors thought about the possibility that having too many eggs in one basking (and undermining the value of music in the process) may be a bad thing?
I’m not saying that this is the main reason for the decline in music sales, but it points to the clear fact that the beancounters running the big five are in over their heads.
Forgive me for not understanding how the majors can’t create a business model that allows a profit to be made on acts that can only sell 100,000 units.
As Lefsetz (correctly) points out: “People are more excited about music than ever, they’re consuming more music than ever, but those who used to be in control of the business…their stranglehold has been broken.”
so jake, who is in charge of the business? the people? apple? no one?
and, as the industry continues to change, who is poised to seize control?
i suspect, for the foreseeable feature, it will continue to divest from majors into the hands of the “indies” and also into technology companies that control various aspects of the digital medium.
What do I know (about partying or anything else)?
Right or wrong, the majors are going to eventually make a play to be the only source to get the music they control. I think the recent news of the complete out-of-print Warner Bros. catalog going online, to be obtained exclusively through them, is a step in that direction.
Of course, 15 minutes after that Warners catalog goes online with all of its DRM copy protection, it will be available for free as mp3s from p2p sources.
Hells yeah.