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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.
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.
... 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."
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."
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."
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.