Reality - Chart of Day-to-day Music Sales
This chart is from the article - http://www.businessinsider.com/chart-of-the-day-music-industry-sale...
It's interesting to me how each medium rose then fell after the introduction of a new medium, always outperforming the previous form of distribution with long declines as new medium became popular. Not so with digital online sales. And none have dropped off as rapidly as CDs and digital sales.
I would propose there needs to be some new form of distriution medium that both protects the copyright owner and is affordable and convenient enough that music consumers can't live without.
With as many creative individuals in our industry, some one should surely be able to figure this out.
Replies to This Discussion
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Permalink Reply by iV on -
from where i sit, i don't think this is simply a question of the distribution medium, but of distribution itself. when labels controlled access to the content, it was much easier to control price and supply. digital has changed all that. manufacturing the product is cheaper than ever and anyone with internet access can distribute the product directly. that ease of production and distribution - now open to practically anyone who wants to create - has created a seemingly infinite number of choices for consumers. and as we have moved away from "ownership" and more towards "access," i think there becomes less reason to purchase music. so we see a steep falloff with the digital revolution because: product is cheaper, product is more accessible and access available to content on demand without purchase.
the commoditization of music doesn't mean that the copyright isn't worth something. it just means that it isn't worth as much because, quite simply, the content itself isn't worth much in the market. ultimately, that means a business built around selling music is difficult to sustain. labels will continue to fail, publishers will continue to move into the space abdicated by labels (i.e. signing acts and creating masters) and dyi acts will continue to find ways to monetize their passion while giving the music away.
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Permalink Reply by Drew Sanford on -
The only answer I've seen that comes anywhere close to working is subscription services. Currently, the only available in the US that I'm aware of is Qriocity, which is apparently owned by Sony, making look like a choice that might leave you wanting a larger catalog eventually.
The idea is you pay a subscription fee to be able to stream what you want when you want. You don't own anything, but you have access to EVERYTHING. I would start to gripe about the quality of the audio streams, but ultimately, it won't matter because kids think their iPods sound good, and the people that use this site likely represent a large portion of the number of people who would take a CD out, and put it in a CD player on a large home stereo (do they still call them Hi-Fi's?) sit down and listen to it.
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Permalink Reply by iV on
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rdio, mog, rhapsody, napster and music unlimited (from qriocity) are all subscription services. spotify, looks like it's making progress to enter into the u.s. market. so subscription services are on the rise, and with them access to a staggering amount of material.
a few years ago, i had my doubts that subscription services would survive against cheaper costs for downloads. but i had assumed that consumers would want to "own" their music rather than "rent" it. but since then, i've seen that the market is willing to embrace subscription services and that since technology now enables you to connect to your service from multiple devices and in multiple locations. and i also think there is a cultural shift taking place. ownership is no longer necessary for access.
and while not exactly a subscription service, pandora is an interesting study in this tension between technological innovation and copyright revenue. in 2007, pandora was almost shut down under the weight of a copyright royalty board increase in song royalty rates. after a battle with the board, a different rate structure was negotiated that allowed pandora to survive and now, four years later, pandora is growing and about to go public.
to my previous point, it seems that copyright rates will ultimately need to be revisited. it's not a question of the importance of copyright. but it is a question of the worth of the copyright. i can't see anyway around the fact that revenue from music sales and royalties will continue to decline. the old music business paradigm is simply unsustainable. the innovators will be the ones who will survive the transitions.
i think that's the value of these discussions. bret made the statement, "With as many creative individuals in our industry, some one should surely be able to figure this out." i agree - though i think we're gonna need some help from the creative individuals outside our industry. the social media experts, the consumer psychologists, the tech geeks and coders - all have some insights to offer us as we seek to create music business 3.0
Drew Sanford said:
The only answer I've seen that comes anywhere close to working is subscription services. Currently, the only available in the US that I'm aware of is Qriocity, which is apparently owned by Sony, making look like a choice that might leave you wanting a larger catalog eventually.
The idea is you pay a subscription fee to be able to stream what you want when you want. You don't own anything, but you have access to EVERYTHING. I would start to gripe about the quality of the audio streams, but ultimately, it won't matter because kids think their iPods sound good, and the people that use this site likely represent a large portion of the number of people who would take a CD out, and put it in a CD player on a large home stereo (do they still call them Hi-Fi's?) sit down and listen to it.
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Permalink Reply by Bret Teegarden on -
I totally understand your point Steve but how do you suppose the access model is sustainable when Lady Gaga only sees a few hundred dollars of income off of over a million streams on Spotify?
iV said:rdio, mog, rhapsody, napster and music unlimited (from qriocity) are all subscription services. spotify, looks like it's making progress to enter into the u.s. market. so subscription services are on the rise, and with them access to a staggering amount of material.
a few years ago, i had my doubts that subscription services would survive against cheaper costs for downloads. but i had assumed that consumers would want to "own" their music rather than "rent" it. but since then, i've seen that the market is willing to embrace subscription services and that since technology now enables you to connect to your service from multiple devices and in multiple locations. and i also think there is a cultural shift taking place. ownership is no longer necessary for access.
and while not exactly a subscription service, pandora is an interesting study in this tension between technological innovation and copyright revenue. in 2007, pandora was almost shut down under the weight of a copyright royalty board increase in song royalty rates. after a battle with the board, a different rate structure was negotiated that allowed pandora to survive and now, four years later, pandora is growing and about to go public.
to my previous point, it seems that copyright rates will ultimately need to be revisited. it's not a question of the importance of copyright. but it is a question of the worth of the copyright. i can't see anyway around the fact that revenue from music sales and royalties will continue to decline. the old music business paradigm is simply unsustainable. the innovators will be the ones who will survive the transitions.
i think that's the value of these discussions. bret made the statement, "With as many creative individuals in our industry, some one should surely be able to figure this out." i agree - though i think we're gonna need some help from the creative individuals outside our industry. the social media experts, the consumer psychologists, the tech geeks and coders - all have some insights to offer us as we seek to create music business 3.0
Drew Sanford said:
The only answer I've seen that comes anywhere close to working is subscription services. Currently, the only available in the US that I'm aware of is Qriocity, which is apparently owned by Sony, making look like a choice that might leave you wanting a larger catalog eventually.
The idea is you pay a subscription fee to be able to stream what you want when you want. You don't own anything, but you have access to EVERYTHING. I would start to gripe about the quality of the audio streams, but ultimately, it won't matter because kids think their iPods sound good, and the people that use this site likely represent a large portion of the number of people who would take a CD out, and put it in a CD player on a large home stereo (do they still call them Hi-Fi's?) sit down and listen to it.
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Permalink Reply by iV on
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the access model isn't built on selling music, but on selling access. and if you build subscribers, you can monetize the service in other ways. the subscription services aren't so concerned with how much money lady gaga makes - as long as it doesn't cut so much into their revenue that they simply can't function as a business (e.g. pandora)
i think where you're going with the question might be better phrased "how is lady gaga sustainable when [she] only sees a few hundred dollars of income off over a million streams on spotify?"
again, here in lies the rub: for better or for worse, music has been commoditized. while it still has huge "emotional currency" in our culture, it's value in real dollars has been diminished. i can argue the good and bad of that fact, but the fact still remains.
i'm not privy to her books, but i'd guess that music sales are probably a loss leader for lady gaga compared to touring, licensing, brand extensions, etc. today's sustainable acts are realizing that they won't make a living selling their music. at least not in the sense that we think about traditional music sales. content creators need to find another way to monetize their creations. while i think we need to become even more innovative and forward thinking about copyright, i think the real answers are outside that box.
Bret Teegarden said:
I totally understand your point Steve but how do you suppose the access model is sustainable when Lady Gaga only sees a few hundred dollars of income off of over a million streams on Spotify?
iV said:rdio, mog, rhapsody, napster and music unlimited (from qriocity) are all subscription services. spotify, looks like it's making progress to enter into the u.s. market. so subscription services are on the rise, and with them access to a staggering amount of material.
a few years ago, i had my doubts that subscription services would survive against cheaper costs for downloads. but i had assumed that consumers would want to "own" their music rather than "rent" it. but since then, i've seen that the market is willing to embrace subscription services and that since technology now enables you to connect to your service from multiple devices and in multiple locations. and i also think there is a cultural shift taking place. ownership is no longer necessary for access.
and while not exactly a subscription service, pandora is an interesting study in this tension between technological innovation and copyright revenue. in 2007, pandora was almost shut down under the weight of a copyright royalty board increase in song royalty rates. after a battle with the board, a different rate structure was negotiated that allowed pandora to survive and now, four years later, pandora is growing and about to go public.
to my previous point, it seems that copyright rates will ultimately need to be revisited. it's not a question of the importance of copyright. but it is a question of the worth of the copyright. i can't see anyway around the fact that revenue from music sales and royalties will continue to decline. the old music business paradigm is simply unsustainable. the innovators will be the ones who will survive the transitions.
i think that's the value of these discussions. bret made the statement, "With as many creative individuals in our industry, some one should surely be able to figure this out." i agree - though i think we're gonna need some help from the creative individuals outside our industry. the social media experts, the consumer psychologists, the tech geeks and coders - all have some insights to offer us as we seek to create music business 3.0
Drew Sanford said:
The only answer I've seen that comes anywhere close to working is subscription services. Currently, the only available in the US that I'm aware of is Qriocity, which is apparently owned by Sony, making look like a choice that might leave you wanting a larger catalog eventually.
The idea is you pay a subscription fee to be able to stream what you want when you want. You don't own anything, but you have access to EVERYTHING. I would start to gripe about the quality of the audio streams, but ultimately, it won't matter because kids think their iPods sound good, and the people that use this site likely represent a large portion of the number of people who would take a CD out, and put it in a CD player on a large home stereo (do they still call them Hi-Fi's?) sit down and listen to it.
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Permalink Reply by iV on
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...and in reality, it's much worse:
check out the revised data based on the chart bret posted
when you adjust the chart for inflation, the stats reveal:
*the music industry is down 64% from its peak in 1999
*10 years ago the average american spent almost 3 times as much on recorded music products as they do today.
...and the kicker in light of my recent post about subscription services: while services like pandora are on the rise, subscriptions have actually dropped in the last two years. so the jury is still out on what the future holds with subscription services - and i think some of that depends on what happens with mobile devices in the future.
regardless of how you slice it the reality is clear: there has been a foundational shift in the music business. the resulting chaos has changed it forever.
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Permalink Reply by Bret Teegarden on
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So Steve, who do you think has been or is being hit the hardest? The corporate, artist, songwriter or technical community? Or is it across the board? Has this fundemental shift conditioned the public into devaluing our various crafts? While other media related industries are seeing changes, I don't see them giving away product or providing unfettered access to their creative properties that don't at least have some kind of monetized return. If and when the do, it is after the inital commercial release .I could be wrong or a little too close to the problem, but most everyone I know are very concerded how long it will be before they have to find other lines of work. It doesn't seem enough people are concerned with finding inovative ways to make music valuable.
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Permalink Reply by Drew Sanford on
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It's interesting you bring up needing "input from the geeks and coders", suggest a change in paradigme and mention ownership not being important, and I think that's key. It will certainly break someone's heart (mine?) - but I spent 12 years in IT doing everything to large scale system administration, to security projects so disjointed it scary. You know what the only way to stop piracy is? Stop selling records, tapes, CD's AND digital downloads. Streaming access only, and you'll need monster encryption on the stream to keep "capturing" the stream (saving it to a client hard drive) from being feasible.
Anyone care to discuss the implications of no more "record stores", itunes, disc pressing, disc sales, etc? Anyone want to tell me I'm wrong?
iV said:rdio, mog, rhapsody, napster and music unlimited (from qriocity) are all subscription services. spotify, looks like it's making progress to enter into the u.s. market. so subscription services are on the rise, and with them access to a staggering amount of material.
a few years ago, i had my doubts that subscription services would survive against cheaper costs for downloads. but i had assumed that consumers would want to "own" their music rather than "rent" it. but since then, i've seen that the market is willing to embrace subscription services and that since technology now enables you to connect to your service from multiple devices and in multiple locations. and i also think there is a cultural shift taking place. ownership is no longer necessary for access.
and while not exactly a subscription service, pandora is an interesting study in this tension between technological innovation and copyright revenue. in 2007, pandora was almost shut down under the weight of a copyright royalty board increase in song royalty rates. after a battle with the board, a different rate structure was negotiated that allowed pandora to survive and now, four years later, pandora is growing and about to go public.
to my previous point, it seems that copyright rates will ultimately need to be revisited. it's not a question of the importance of copyright. but it is a question of the worth of the copyright. i can't see anyway around the fact that revenue from music sales and royalties will continue to decline. the old music business paradigm is simply unsustainable. the innovators will be the ones who will survive the transitions.
i think that's the value of these discussions. bret made the statement, "With as many creative individuals in our industry, some one should surely be able to figure this out." i agree - though i think we're gonna need some help from the creative individuals outside our industry. the social media experts, the consumer psychologists, the tech geeks and coders - all have some insights to offer us as we seek to create music business 3.0
Drew Sanford said:
The only answer I've seen that comes anywhere close to working is subscription services. Currently, the only available in the US that I'm aware of is Qriocity, which is apparently owned by Sony, making look like a choice that might leave you wanting a larger catalog eventually.
The idea is you pay a subscription fee to be able to stream what you want when you want. You don't own anything, but you have access to EVERYTHING. I would start to gripe about the quality of the audio streams, but ultimately, it won't matter because kids think their iPods sound good, and the people that use this site likely represent a large portion of the number of people who would take a CD out, and put it in a CD player on a large home stereo (do they still call them Hi-Fi's?) sit down and listen to it.
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Permalink Reply by iV on
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digital delivery isn't only affecting the music industry. just ask borders bookstores. or blockbuster video. within our own industry, everything has been so interconnected that every sector has been touched. i have friends who are no longer in the business. labels have downsized or closed, publishers have been unable to keep doors open, writers haven't been able to get cuts, studios have lost business to bedroom setups...the list goes on. we've not hit bottom yet, i'm afraid. and there will continue to be casualties until new systems emerge. but i don't think it will ever be what it was. and as with the death of anything, there is certainly grief that comes with the loss.
the question of making music valuable is a two edged sword. on the one hand, we know that it's valuable for our soul. on the other hand, the market has determined that the price tag for the recorded product is somewhere between .99 and zero. that's not enough fuel to keep the engine running in the gas guzzling music business model of yesterday. i'm not sure if we can find innovative ways of making the music more valuable. there are much smarter, more forward thinking folks out there than me - and i'm fascinated as i watch them wrestle with the issues - and even more fascinated as see some of the ways the dots are being reconnected. the transition will be difficult for those of us who are caught midstream in the evolution.
the good news is, we will find innovative ways to support creation. tools that allow us to create more cost effectively. programs that allow for fan based support and participation in the creative process. technology that allows for more connectivity and enhancement of fan experience. business models that encourage patronage. a shift from macro-corporate industry to micro-corporate infrastructure. we'll find new ways to make it work and our expectations will be adjusted along the way.
and for awhile, it's gonna hurt like hell.
Bret Teegarden said:
So Steve, who do you think has been or is being hit the hardest? The corporate, artist, songwriter or technical community? Or is it across the board? Has this fundemental shift conditioned the public into devaluing our various crafts? While other media related industries are seeing changes, I don't see them giving away product or providing unfettered access to their creative properties that don't at least have some kind of monetized return. If and when the do, it is after the inital commercial release .I could be wrong or a little too close to the problem, but most everyone I know are very concerded how long it will be before they have to find other lines of work. It doesn't seem enough people are concerned with finding inovative ways to make music valuable.
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Permalink Reply by iV on
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it's an interesting thought. if ownership was completely removed from the equation what the end result would be? and if access were only available through regulated pay portals where that would leave us?
Drew Sanford said:It's interesting you bring up needing "input from the geeks and coders", suggest a change in paradigme and mention ownership not being important, and I think that's key. It will certainly break someone's heart (mine?) - but I spent 12 years in IT doing everything to large scale system administration, to security projects so disjointed it scary. You know what the only way to stop piracy is? Stop selling records, tapes, CD's AND digital downloads. Streaming access only, and you'll need monster encryption on the stream to keep "capturing" the stream (saving it to a client hard drive) from being feasible.
Anyone care to discuss the implications of no more "record stores", itunes, disc pressing, disc sales, etc? Anyone want to tell me I'm wrong?
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Permalink Reply by Drew Sanford on
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From a personal standpoint I love owning music. If I'm honest though, that's because in the past that was the only way to listen to what you WANTED to listen to, instead of what they wanted to feed you on the radio. Currently the reason I love owning music is because of quality. And even though MP3's are right there next to horrible, I still use an iPod hooked up to my car stereo rather than hauling my CD's around with me - after all, the iPod getting stolen would cost less to replace than 20 or 30 CD's. But what about people who don't even notice the quality (or lack thereof) of an MP3? Clearly, it doesn't mean anything to them. They buy stuff online from itunes, they download pirated copies, all it is to them is a means of accessing the music in a form they can take it with them.
What happens if we take away ownership? Well, the iPod either has to grow cellular data capabilities or go away. Society is becoming more connected. On several occasions I've driven my daily commute listening to Pandora streaming on my phone rather than the radio OR my iPod. So what happens if we do away with ownership? Variety. For instance, lets assume I start paying a subscription to a service that gives me access to EVERYTHING at, somehow, a miraculous CD quality audio stream. What's the first think I'd listen to? I can tell you. It'd be the new (ok, it's what, 2 years old now?) Beatles Remasters Mono box set. I don't own it. It simply isn't in my music buying budget. Oh, it would be if I was just rolling in the cash, but who is, these days? Still, I'd love to listen to it downstairs on the "big radio".
In effect, I don't think anyone looses anything but quality if we take away ownership. The subscription services pay the artists - it's digital broadcast. If more people subscribe, then there's more money in the subscription plays for everyone. And there's a good change people listen to things they wouldn't normally have gone out and bought, because hey, it's only costing them the time right, they're paying the subscription anyway.
I dread the notion, unfortunately, from a business standpoint, I have yet to discover a downside.
iV said:it's an interesting thought. if ownership was completely removed from the equation what the end result would be? and if access were only available through regulated pay portals where that would leave us?
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Permalink Reply by Mike Dunbar on -
Looking at this graph, it seems the current slide accelerated with the current economic slide, both starting around 2008. I would like to see a similar graph in sales of other non-essential items and services. (not dissing art, but in tough times it's food, water, clothing and shelter that are essential.) Also, the big cd growth taking off in the 90's seemed to be happening around the time the Berlin Wall fell. When Communism fell, new markets expanded. They also expanded to and through 2001, around the time the dot com bubble broke and 9/11. I'll bet history itself has had an effect on western art in general. As it's been said, I believe subscription services will become the future model. When it becomes cheaper and/or easier to subscribe than it is to steal, profit will begin returning to music.
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