2014 was another bad year for music sales

New numbers from Nielsen show that digital album sales in the U.S. declined by 9 percent in 2014, to 106.5 million, down from 117.6 in 2013. Including CDs, album sales even fell 11 percent. Digital song sales are also down 11 percent..

Read more here

All-time low for album sales

For the first time since Nielsen SoundScan began keeping track in 1991, album sales failed to reach the four-million-sold mark this week, totaling just 3.97 million.

Digital album sales are down 11.7 percent for the year, and à la carte downloads are down another 12.8 percent according to Billboard. Illegal downloading has no doubt eroded much of those digital sales, but it’s the emergence of legal streaming sites like Spotify and Pandora that has also chipped away at overall sales.

Read more in Rolling Stone

Can streaming slow the music industry’s long decline?

A report on March 18th by IFPI, a record-industry group (finds) music labels’ worldwide revenues fell by 4% last year to $15 billion, a reversal of 2012’s slight rise. But much of the fall was due to Japanese consumers finally giving up on CDs, as much as the rest of the world had already done. A closer look shows that streaming services are starting to bring the business back into profit in countries that have suffered steady declines, such as Italy.

Streaming now has around 28m paying subscribers, and several times as many who use free versions. Last year subscription-based versions like Spotify had combined revenues of more than $1 billion, up more than 50% from 2012. That figure does not include online-radio firms, which last year had revenues of $590m in America alone, a rise of 28% from the year before. In America, the largest music market, 21% of the industry’s 2013 revenues came from streaming, whose growth more than offset declines in CD sales.

Even so, only 4-5% of music consumers in America and Britain have so far signed up for subscription streaming, says Mark Mulligan of MIDiA Consulting.

Read more at the Economist

Better times for the music industry

Streaming is still a small part of the music business globally, but will bolster it in the years ahead. Like a popular rocker who burns out, only to try to stage a comeback a decade later, the sickly music industry will probably never regain its previous vigour. But even modest growth is welcome news for the industry... It will become more common for bands and managers to use data about where fans are listening to them in order to decide where to tour.

Read more at The Economist

On YouTube, Video Makes the Radio Star

Since YouTube’s inception in 2005, the site’s been known primarily as a bottomless Big Gulp brimming with webcam confessionals, cute-mammal footage, and assorted other Web junk. Over time it’s also become a musical kingmaker—a place where fledgling and unfamiliar talent can break through to massive audiences.

A decade ago the record industry’s gears clicked along more or less as they always had: Labels signed up promising acts discovered by A&R scouts, paid those acts advances against future music sales, and hawked that music through a sprawling network of radio programmers and retailers. Today, with album sales continuing to plummet—in 2004, 666.7 million albums were sold; by 2012 that number was down more than 50 percent, to 316 million—labels and artists depend more than ever on touring and merchandise for revenue. Songs are ads meant to help sell tickets and T-shirts, and YouTube is beginning to rival radio when it comes to breaking those tracks.

Read more here

Pandora Hits 200 Million Users

Pandora has announced hitting the 200 million user mark in the U.S. The online radio service streams 200 million songs before 10 a.m. every day.

Read more here.

Music sales post small rise in 2012, first since '99

The music business broke a 12-year losing streak in 2012, posting a small but symbolic 0.3 percent rise in trade revenues to $16.5 billion, figures from the International Federation of the Phonographic Industry (IFPI) showed on Tuesday. The slight increase will come as a relief to record label bosses who have watched the value of sales plummet from a peak of $28.6 billion in 1999, as illegal downloads and a reluctance to embrace the digital age hit revenues hard.

Read more from Reuters

Digital album sales surge as CDs slowly fade away

In 2012, for the first time in history, digital stores became the primary outlet for buying albums, eclipsing mass merchants that had been the leading sales sector for the previous five years. CDs have been allotted less shelf space at chains, speeding digital's rise. Read more here

Radio still dominates music discovery

Radio remains by far the main way US consumers discover music, despite the likes of YouTube and other rival options, according to research by Nielsen. Its Nielsen Music 360 Report of 3,000 online consumer surveys found 48% of those questioned discover music most often through radio stations, compared to 10% from friends and relatives and 7% from YouTube. However, when it comes to listening to music YouTube rules among teenagers with 64% saying they use it to hear music compared to 56% listening to music on the radio, 53% through iTunes and 50% to music on CD.

Read more here

A musical merger could create a new model, or a dozy mammoth

Some are now wondering whether Universal Music Group was wise to gamble quite so much money on EMI’s recorded-music division, which it bought from Citigroup for £1.2 billion ($1.9 billion) in an auction in November last year.

Sales of recorded music have fallen by half in the past decade, from about $13 billion in 2002 to $6.5 billion last year. Downloaded music is much cheaper than the old compact discs. Indeed, thanks to widespread piracy, it is often free.

Digital sales are rising, but are still only a fraction of what CDs used to generate. Subscription services such as Spotify may appeal more to tech-savvy music aficionados than to casual buyers who might once have picked up a CD on the way home from work. Efforts to bundle music with mobile-phone or pay-TV subscriptions have failed to catch on.

Read more here

New Google Play combines apps, music and books

Google on Tuesday unified its digital entertainment offerings into a single cloud-based destination called Google Play. Android Market, Google Music and the Google eBookstore are part of this new online emporium. At play.google.com, you can store all the music, movies, books and apps you've previously bought through what had been separate Google stores, or visit the site to fetch new content. Google Play is available on the Web and on Android smartphones and tablets. Inside Google Play, you can store up to 20,000 music tracks or purchase new songs from a catalog now north of 8 million tracks. Google Play also has more than 450,000 Android apps and games available for download, and more than 4 million eBooks, which Google claims is the largest e-book collection anywhere. You can also rent thousands of movies. Read more here

Cassette tapes see new life after mp3s

The editors of the Concise Oxford English Dictionary decided to remove the term "cassette tape" from its pages this summer to help make room for 400 new words including "cyberbullying" and "retweet."

It's starting to look like that move may have been premature. A growing number of indie bands are turning to the format to get their music out more quickly and inexpensively, according to Rob Mason, the owner of Old Flame Records.

Regardless of format, music consumption is at an all-time high, says David Bakula, the senior vice president of analytics entertainment for Nielsen. But even as sales of vinyl records continue to grow -- they've increased 37% from last year, he said -- it's uncertain whether cassette nostalgia will reach those same heights.

Read more here

Spotting the pirates

Since 2000, when the file-sharing service Napster first became popular, digital piracy has dogged the media industry. As broadband speeds have increased, pirates have gone from downloading single songs to grabbing artists’ entire catalogues. Yet piracy has not exactly swept the world. It is endemic in some countries but a niche activity in others. Media piracy is more common in the developing world than in the rich world. The most piratical countries are places like China, Nigeria and Russia, where virtually all media that is not downloaded illegally is sold in the form of knock-off CDs and DVDs.

Read more at The Economist

Cassettes Return for an Encore

It looked like the end of the reel for cassettes. The last car to ship with a tape deck was the 2010 Lexus SC 430. Sony stopped making the Walkman last October. This can mean only one thing: Cassettes are about to be cool again.

Read more at Wired

The recorded-music business learns to love its enemy

Theirs is still a deeply troubled business. Since 2000, when online file-sharing took off, global recorded-music sales have fallen from $26.9 billion a year to $15.9 billion, according to the IFPI, a trade group. Apple has helped to smash profitable albums into less profitable singles.

Digital outlets such as iTunes are not growing nearly fast enough to offset the decline in CD sales. Indeed, in many countries they are stuck in a niche. In Japan, 73% of spending on recorded music in 2010 was on CDs, DVDs and vinyl. Fewer than one-fifth of Britons bought digital music last year.

Apple’s iCloud is not just a storage locker for music. It will search devices for tracks purchased from the iTunes store, and automatically give customers the rights to download the music to any Apple device. Yet music companies do not expect Apple or any other technological behemoth to save them. Few believe recorded music is about to rebound.

Read more at The Economist

6 Predictions For the Music Industry in 2011

The music industry had a wild ride in 2010. Companies came and went, layoffs hit every sector. This year, 2011, should be no different.

1. A Major Label Shakeup
Despite all the talk about the major label system collapsing at any moment, it doesn't seem likely. However, 2011 may finally see a restructuring of assets and brands.

2. Indie Label Opportunity Grows
All music companies will be focused on streamlining their efforts in 2011.

3. Streaming Services Reach Critical Mass
In 2011, someone will become the Apple of streaming -- perhaps Apple itself.

4. Free Continues Moving Upwards
The majors and superstars have relaxed their policies on free (especially when paired with data capture) and that trend will continue. This will happen in parallel with efforts to find techniques to convert free to paying -- a critical element to make this model work.

5. The Essential Toolkit Solidifies
Digital marketers have an almost endless supply of new technology and techniques to try. In 2011 we will see this continue as it becomes more clear which technologies and techniques provide real value.

6. The Net Neutrality Debate Continues
The positions and arguments haven't changed much, but the Net neutrality discussion (particularly at the government level) has accelerated.

In many ways 2011 won't look much different than 2010. The music industry is still suffering from steep declines. The key words moving forward are innovation and experimentation; most people have accepted the fact that we cannot force consumers to behave as they did in the past.

Read more here.

Lowest-Selling Debut Album of All-time

This week, Cake has the No. 1 album on the Billboard chart. (BuzzFeed says it) made it there with the lowest-selling debut album of all-time: “Showroom Of Compassion” sold just 44,000 copies in its first week. In March of 2000, 'N Sync set the record for the biggest-selling debut of all time with “No Strings Attached,” which moved 2.4 million copies.

A Social Music Chart

Entrepreneur Eric Garland thinks he has a better music chart. His secret? Tweets, status updates, and web chatter. BigChampagne, based in Beverly Hills, tracks sales, downloads, and listening activity on just about every music-distribution platform, from iTunes to FM radio to MySpace. (And, yes, it still tracks illegal file sharing too.). BigChampagne then analyzes and sells the data to record labels, talent agents, and radio stations that are looking to find under-the-radar acts.

In late July, BigChampagne unveiled its latest creation, the Ultimate Chart, which supplements widely available data on sales on Amazon (AMZN) and iTunes with metrics that measure a song's buzz: YouTube (GOOG) and MySpace hits, Twitter and Facebook mentions, Clear Channel radio spins, and Rhapsody and Last.fm streams.

Read more here.

Making Money in the Music Business

For the past ten years sales of recorded music have declined so steeply as to become a cautionary tale about the disruptive power of the internet. The rise of illegal file-sharing and the end of the digital “replacement cycle”, in which people bought CDs to replace tapes and records, caused spending to collapse. In Japan, the world’s biggest CD sales market, the number of discs sold fell by 6% in 2008 and 24% in 2009.

Yet the music business is surprisingly healthy, and becoming more so. The longest, loudest boom is in live music. Between 1999 and 2009 concert-ticket sales in America tripled in value, from $1.5 billion to $4.6 billion (see chart 1). It is not that more people are going to concerts. Rather, they are paying more to get in. Fans complain bitterly about the rising price of live music.

Music’s best business customer is television. “Watch an evening’s worth of TV and count how many times you hear music in the background,” says Jeremy Lascelles, chief executive of Chrysalis.

In a sense, the recorded-music market is not so much dying as greying. America’s bestselling album since 2000 is “1”, a collection of Beatles hits from the 1960s. Some music executives fret that the stadium-filling acts will not be replaced.

Read more in The Economist.

Sound Quality Steps Back

The last decade has brought an explosion in dazzling technological advances - except in music. In many ways, the quality of what people hear has taken a step back. To many expert ears, compressed music files produce a crackly, tinnier and thinner sound than music on CDs and certainly on vinyl. And to compete with other songs, tracks are engineered to be much louder as well. In one way, the music business has been the victim of its own technological success: the ease of loading songs onto a computer or an iPod has meant that a generation of fans has happily traded fidelity for portability and convenience.

For decades, starting around the 1950s, high-end stereos were a status symbol. But from 2000 to 2009, Americans reduced their overall spending on home stereo components by more than a third, to roughly $960 million, according to the Consumer Electronics Association, a trade group. Spending on portable digital devices during that same period increased more than fiftyfold, to $5.4 billion.

People used to sit and listen to music but the increased portability has altered the way people experience recorded music. It is no longer consumed as an event that you pay attention to. Instead, music is often carried from place to place, played in the background while the consumer does something else — exercising, commuting or cooking dinner.

The songs themselves are usually saved on the digital devices in a compressed format, eliminating some of the sounds and range contained on a CD while allowing more songs to be saved on the device and reducing download times. Last year, the iTunes Store upgraded the standard quality for a song to 256 kilobits per second from 128 kilobits per second, preserving more details and eliminating the worst crackles.

Audio engineers are often enlisted to increase the overall volume of a recording. To achieve an overall louder sound, engineers raise the softer volumes toward peak levels. On a quality stereo system, Mr. Merrill said, the reduced volume range can leave a track sounding distorted. Modern recording has gone overboard on the volume.

Read more at the New York Times.