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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.
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.
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!
"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."
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.