Yet Another Look at CD Sales

citizenkeller writes "Dan Bricklin, of VisiCalc fame, has published a very interesting essay on "CD sales, downloading, and burning". In his own words: 'Given the slight dip in CD sales despite so many reasons for there to be a much larger drop, it seems that the effect of downloading, burning, and sharing is one of the few bright lights helping the music industry with their most loyal customers. Perhaps the real reason for some of the drop in sales was the shutdown of Napster and other crackdowns by the music industry.'"

Comments

It's the music, stupid

[RailGunner]

Ripping off a Dick Morris quote, but the reason CD sales have fallen is the lack of innovation in the music. Can a casual listener really tell the difference between the Backdoor Boys and N'STYNC? Or between Britney Spears and the clones of her? The difference between Drowning Pool and Disturbed? The real problem is that there's no true variety in new music these days. Current rock bands sound like other rock bands, current pop bands sound like all the other pop bands, the music is just cookie-cutter, corporate crap.

As proof of this, let's look at the top 20 selling albums of all time as an example:
1. Eagles: Greatest Hits
2. Michael Jackson: Thriller
3. Pink Floyd: The Wall
4. Led Zeppelin IV
5. Billy Joel: Greatest Hits
6. AC/DC: Back in Black
7.Shania Twain: Come on Over
8.Beatles: White Album
9.Fleetwood Mac: Rumours
10.The Bodyguard Motion Picture Soundtrack
11.Boston: Boston
12.Alanis Morissette: Jagged Little Pill
13.Garth Brooks: No Fences
14.Hootie and the Blowfish: Cracked Rear View
15.Eagles: Hotel California
16.Beatles: Beatles
17.Bruce Springsteen: Born in the USA
18.Pink Floyd: Dark Side of the Moon
19.Guns N Roses: Appetite For Destruction
20.Elton John: Greatest Hits

The list is a little rock-heavy, but look at the difference bewteen the bands. There's a huge variety of musical styles here. In other words, the exact opposite of what's being sold now. Listening to the same carbon copy crap is boring, and the opposite of entertaining. Until the RIAA and the record companies start releasing albums from artists who are willing to experiment musically, then sales will not increase.

Personally, the last CD's I purchased were Ozzy Osbourne: Live at Budokan (and the remaster / reissues he's released this year), and Black Sabbath's Past Lives. I doubt I buy any more CD's this year.

Re:Video games have a larger percieved value.

[DonkeyJimmy]

Video games are big business, and may eclipse movies (if they haven't already).

video game industry in 2001: $9.4 billion

Movie rental in 2001: $8.42 billion

Box Office in 2001: $8.35 billion

So even though the video game industry isn't quite up to speed with the entire movie industry, it's bigger then rentals or theatures on it's own. Not bad.

Re:The record labels are stupid.

[ebonkyre]

>If the record labels weren't stupid, they would have offered Napster, Morpheus, and the like payola to make artists on their labels appear in searches first.

They do. KaZaA returns paid results on a number of searches (look for gold icons instead of white). While some of it is porn-site samplers, there is also a good bit of new-artist music as well, including some from mid-sized labels like Maverick Records (Madonna's label).

This is a just one of many examples of the industry's desire to have their cake, and eat it (and yours) too. Witness: Sony Music threatening all-out cyberwar against MP3-traders, while Sony Electronics is busy selling portable MP3 players; RIAA demanding that Congress give them carte blanche to hack suspected pirates computers as vigilante justice and calling their customers thieves, while simultaneously being whiny-babies about their own servers being knocked offline by vigilante "hacktivists" and trying to engineer ever-more-heinous means to deny payment to the artists they allege to be protecting.

mp3.com was bought out

[MenTaLguY]

MP3 got bought out by the recording giants (Vivendi Universal) some time ago (this is why they're now plugging artists like eminem on the front page). Then they changed the mp3.com contract so it screwed the artists.

Most of my favorite mp3.com artists stopped posting new material after the contract change.

So, no, mp3.com is not an indy option. Sorry.

DVD Killed the CD Star

[tupps]

There was an interview in one of the local papers with one of the big discount retailers of CD's here in Australia (JB-HiFi). They were asking the sales manager about the drop in CD sales (aprox 80% of previous years) and he squarely pointed the finger at DVD sales. He said they have seen a drop in CD sales but DVD have exploded. Previously they only sold a couple of Videos (eg a small percentage of CD sales) but DVDs are growing in leaps and bounds. They have even taken over the shop next door to one of there city stores to cater for the selection of DVDs and it is always full. The sales manager beleive that DVD's were taking up a fair proportion of the CD budget that people spent on entertainment, and believed that downloading and coping of songs has nothing or very little to do with it.

Re:It's a vicious cycle, too

[Lux Interior]

You and the other replies are almost right, but not quite. The reason you only hear about 'this month's big names' is because, to get a record to sound good enough for radio to play it, costs at least $100K and I have seen it rise to as much as $500,000 (HALF A MILLION) for an album that ended up shipping 15000 units. Most labels can't afford this and therefore can't saturate the national media.

Next point. The costs are not vicious to record an album. $100,000 is not too bad. What kills you is the half a million it takes to work a record at rock radio (yes, $500,000-- some of which goes to listener giveaways, etc etc etc but most of which lines various pockets in the Clear Channel hierarchy and in the independent promotion worlds (independent promoters are the people who make the phone calls that you don't have time to, or can get people on the phone that you can't. They cost.)). If you want a hit, you pay. If you can't afford it, you don't, and try to get exposure through non-comm radio, touring, and word-of-mouth.

What also kills you is the $4 to $15 in advertising costs PER UNIT-- PER UNIT-- that it can take to get sufficient visibility to break a band. This includes print advertising, price & positioning at retailers, co-op advertising (where you split the cost with a retailer), etc. It costs $20-30,000 to get a full page ad in the New York Times sunday magazine. Rolling Stone STARTS at $50,000 for a little ad. Even the smaller magazines like CMJ, Mother Jones, Magnet, cost something, usually between $1000 and $10000 per ad.

It's these costs that add up. As mentioned, costs run away. I've seen an album come out, ship 30,000 units, and then 20,000 of those come back 90 days later as returns, all the while supported by $30 per unit-- PER UNIT--- in advertising. To a point, this is a cost labels are willing to absorb because eventually, on the 2nd or 3rd or 4th album, all these costs will amortize when an album breaks, but this is an example of costs getting horribly out of control. Which can happen easily, and does happen often. This is where labels lose money.

One final note. Artists retain labels to do the work they can't-- get marketing, provide tour support, front the money for recording, secure visas for international travel, set up press junkets, get radio play. The label uses their money to do this with. Therefore, it's only natural that the label make their money back before the artist gets their cut (with the exception of certain things like sync licenses which go straight to the artist- a good thing). It's why labels exist-- to expose themselves to risk in the expectation of furthering an artist's career. I am in it to make great music famous, and so are a heap of other people. Just because a label pays its "union dues" to the RIAA does not make them evil. It makes them just like an auto worker who is in the UAW or a teacher in the NEA. Buy independent, forget the majors, and remember, music is everything.