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Legal US Music Downloads Beat CD Single Sales
Kelly McNeill writes "I've received a lot of feedback from osViews readers (my site) asking about the music download survey that we've been conducting over the past few weeks, saying that osViews readership must be skewed in one particular direction to get the results we did. The primary reason given is not necessarily the fact that iTunes has significantly surpassed its competitors, but that the results show legal digital downloads surpassing even CD sales. I must admit that even I thought this a was a bit peculiar, but now, according to a BBC World news report, it seems the survey is correct. Digital downloads have surpassed even physical CD sales!" Update: 11/04 23:35 GMT by S : The BBC story refers to CD single sales, so Mr.McNeill maybe not be quite as right as he thinks, sadly.
every content provider is looking to incorporate more and more DRM as the quality, cost, and ease of creation of copies improves.
the music industry doesn't care about people copying songs off the radio. it didn't even really get its panties in a bunch when CD-Rs first hit the market. or when mp3s hit the ftp servers. It went ballistic when anyone could download a single application and instantly find a never ending stream of perceptibility loss-less perfect digital copies.
likewise with the MPAA and DVD encryption, likewise with the new Cable Set-top standard.
They want to cut out MythTV, Tivo, splitters, H-cards, and cable descramblers. It's becoming too easy to get at the current data, so they want a change.
with the analog system working (fairly) well as is, why else would they create a new 'standard' for the digital system? It certainly isn't in the interest of the consumer.
Why doesn't Sony support the Blu-Ray with its stock rewritable feature?
Why did Disney/Circuit City/et al try to push (the bad) Divx onto the market in the first place?
It isn't because consumers are clamoring for less control or cheaper movies.
The time is coming when content producers are going to have to realize that their profits will no longer come from format-updates (repurchasing 8-tracks as CDs, VHS classics as DVDs, etc), and will -not- come from service-style access to data. Classic TV advertising may even have to give way to pure product-placement campaigns.
Cable will realize that a move to pay-per-channel is the way to support content without advertising in our new time-shifted digital reality. Some people -will- pay $1/mo for TLC. Home Depot will still pay for product placements in Trading Spaces. Maybe the Super-station will go away - but the cable companies, and popular channels, need not.
the film industry has already shown that the theatre experience is not losing out to cheap cam copies. they've learned that feature-rich dvds or dirt-cheap dvds are preferred to the customer over hacked-together recompressed copies on filesharing networks.
The record companies will need to realize that to win with digital music requires providing the best quality, with the least hassle. They will need to realize that they must beat file-sharing on features. People will give up hunting around for a good (not mislabeled)256kbps rip of Britney's newest song - if they know they can just hit iTunes or its ilk and cough up $1.
Fair Use needs to win out. These purported 'losses' from file-sharing need to be revealed to be grossly overestimated fabrications. (A PSA from a supposed union set painter claiming that file sharing is killing the movie industry, and threatening his job - airing during it's highest grossing year of all time is particularly tactless)
DRM is the tool of the content dinosaur. If they concentrated on actual content piracy rings - where big money is being made off black-market copies, and abandoned their fruitless DRM research - their profits could be higher than ever.
But such is not the reaction of anti-competitive cabals. Being forced to -compete- is not what they do. Suing, threatening, bullying, bribing - these are the blunt instruments they wield instead of the precise tools of innovation, imagination and competition.
So in the meantime - expect every advance to carry DRM in the fine print.
propz to GNAA
What's the surprise? People with any kind of feel for the pulse of technology have known for a long time that once digital sales of music finally started to not totally suck, they'd catch on.
I guess album art is really dead? That's too bad as it is an artform in of itself.
...Well no SHIT sherlock!
Of course the number of units sold online is going to surpass the number of physical units sold. You have a higher availability of product, lower cost, and a greater transport for them that the consumer loves.
Of course, I am above saying I told you so to people, so I will avoid that in this case towards the RIAA. However, I would like to rub their noses in it, literally, so if someone could work that out, that'd be great.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
they're not talking about all cd sales, just cd singles vs online singles. DUH! hardly anybody buys cd singles anymore. it says nothing about people buying full cds vs online albums.
For the lazy, non-RTFA'ers, this is only compared to CD singles, not CD sales in general. So not that surprizing seeing as how small a market that is and how expensive singles are.
Convenience is really the key for online music stores. Browsing from your home at all hours of day and night, previewing a track - something you may not be able to do where you buy music - the ability to "impulse buy" a song you just heard or remembered, and the instant gratification of having it available only a few moments after you make your decision (unless you are on a slow connection) are big factors. The "what other people purchased" up-sell can be a way to broaden your music library as well.
As the BBC article mentions, it's not a truly fair comparison because it's all tracks sold online vs. only singles. I purchased a number of my tracks as part of an album, and I don't often buy CD singles, either (never, actually). So, it would be nice if we could compare full album sales instead of the unbalance "tracks vs. singles".
Still, it is nice to see online music doing well - IMHO, anyway. DRM, as always, will remain a key issue here.
That what was all this school was for... to teach us how to solve our own problems. -- janeowit
Of course, these reports will be meaningless to the music execs. Instead of acknowledging that the albums with only or two decent songs are on the way out, they'll continue to blame piracy for the decline of CD sales. I recently signed on with iTunes (for Windows) and I'm enjoying it. iTunes has (what I consider to be) reasonable use policies. I'm not about to give up my perfectly working MP3 player so I was wanting a service that will allow me to make MP3s using reasonable steps. Already, I've purchased more music that I have the past couple of years. And get this... they're all songs that I like; none of the filler crap.
Eventually, they'll "get it" and realize that their business model is changing and you'll see more services like iTunes.
I'd buy if it was in .ogg format, but it's not. The problem with these download services is that they're using proprietary formats... like AAC for Apple's, and MS' will definitely use WMA. We should AT LEAST have the option of MP3 if we can't have ogg.
Happy New Year, it's 1984!
You cant scratch an Mp3
wud
It depends on the disc as to whether it's a waste of money or not. Some artists release otherwise-unreleased songs only onto a CD single. You can get a lot of great & obscure music this way, if you're a big fan of a particular artist.
And sometimes those remixes can be way better than the original. It all depends.
A saw an article a while ago that noted sales of online porn (mostly through adult websites) surpassed that of porn sold through traditional venues (e.g. adult video & books sellers). And that was a few years ago. The porn industry adapted to the new technology seemlessly, while making more money than ever.
Regardless of your opinions of the porn industry (which often does things as shady as the RIAA), at least they know an opportunity when they see it. The RIAA refuses to get a new business model, unless you consider suing your customers into a submission a business model.
... would have made if this service was out in 1999.
Granted, legal digital music has been successful, but how many people out there still hate the RIAA?
To all of those who have called music downloaders thieves, all I can say is I told you so. People are basically honest, and they're willing to pay for good service.
"Derp de derp."
Oh they got the note... and they're still collecting money for every song that Apple sells.
We can laugh at them for not jumping on the bandwagon sooner, but they're getting the last laugh, and still getting paid.
My sig is blank, I typed this by hand.
So that's it:
1. Find what the customers want
2. sell it to them
3. Profit!!!
At last, the end of the 1.2.3. jokes. We found the missing part!!!!
Write boring code, not shiny code!
Actually, most artists are giving you their work for free. All that money you pay goes to the distributors; none of it reaches the artists.
/. for more than a month or so should have seen the data by now.
Recording industry contracts pretty much guarantee that the artist gets nothing (and in fact usually ends up in debt) until at least 1.5 million CDs are sold. For new groups, the crossover point is often much higher, and is hardly ever reached.
But this is hardly news in this forum. Anyone reading
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
"but they're getting the last laugh, and still getting paid."
No they're not. Part of what sparked this is that the quality of music has gone down. They were making money by selling albums at a premium with only 2-3 songs the listener actually wants to have. That translates to roughly $5 a song. Now it's what, $1 a song? To put it another way, people will spend $10 instead of spending $45.
Over time, it might turn into better revenue, as more and more artists will have less and less pressure to create a whole album. But in the short term, the RIAA risks a huge chunk of their margins.
"Derp de derp."
You know, it's not like iTunes is doings its thing without going through the RIAA. iTunes offers the service it does because the RIAA allows it. The RIAA is not fighting paid digital downloads. On the contrary, with all the new services springing up, it would seem that they're supporting it.
Oh, I forgot. They're one of those groups Slashdot doesn't like. Any excuse to bash them, however illogical, right?
~ Aero
The question I'm wondering is: how many 45 rpm singles were being sold at the height of their popularity, into what population?
We are guessing that 7.7M + 4M/month is way low compared to the peak, which I might guess was 10-15 million/month for a smaller population.
-dB
"It if was easy to do, we'd find someone cheaper than you to do it."
The music industry is finally catching on. They need to give people rights, not restrictions. That is what works. Why should I pay $16 for an album I can't play on my work computer. What is the point of that. I can download whatever I want for free and play it on my work computer or at home and then burn them to disk....hmmmmm, this isn't rocket science. $.99 is worth the convenience for a song I really want, but the price must come down if they expect me to buy songs to hear them once and throw them in the trash. I will pay $.25 for mediocrity. But they will have to pay me listen to some of their crap.
I bought a CD single last week. It was 3.99. It contained a remix of the song, the album version of the song. A remix of another song on the album. And a previously unreleased cover song. So, I get 4 songs for $4. Sounds like the iTMS. :)
Jack Valenti and Orrin Hatch will be first up against the wall when the revolution comes.
If you only buy songs one at a time, and each song must stand on its own, unless they bundle them somehow, you will only rarely buy full albums. Why buy 22 songs when you only want 3 from that album. You will more likely have a folder with an artists name on it, and organize songs that way.
I didn't even need to click. I've been doing the math to figure how big a deal this iTunes thing is (not big, at least not yet).
Here are the numbers. The U.S. record industry sold $12.6 billion worldwide in various formats (almost all CDs) in 2002. This is off a bit from the peak $14.6 billion in 1999. It's important to keep in mind that, even at those levels, we're talking about nine weeks revenue for IBM.
Assuming the Windows side of iTunes Music Store continues to sell at the initial rate of 1 million songs/$1 million revenue in the first 3.5 days, that's only about $104 million per year. The Mac side sold $13 million in tunes in the first six months, so we'll put that side at $26 million per year.
That's $130 million per year for all iTMS. Even if the store doubles its sales, and then the other stores collectively match its sales, you'd be talking about total online sales of $520 million per year, still a drop in the bucket.
The growth will need to get exponential before there is any comparison with offline music sales. I'm not saying it won't happen, but that's what we're talking about, and that's how I instantly new the hed on the posting was wrong.
It is good that people are now paying for the music they download, but a lot of people don't understand that the artists get very little of this money. Generally a band will only get 10% - $1 for the entire album downloaded, whereas the record company gets $9 for each album downloaded.
:)
In the CD world, 10% ($2) was a good deal for the band because the record companies had to pay for manufacturing, cases, booklets, shipping and publicity, which is quite costly. But now they don't have to do anything - it is pure profit for the record companies, so they should be passing on a higher percentage of the profit to the bands.
Until They change how much the bands get payed for digital downloads I will stick to buying CDs. Plus I like getting booklets
Saying your OS is the best because more people use it is like saying MacDonalds make the best food
"The BBC story refers to CD single sales, so Mr.McNeill maybe not be quite as right as he thinks, sadly."
Who cares which is outselling the other, as long as the consumer has the option to buy either.
Vote for Pedro