iTunes Sales Ban Does Increase CD Sales

Guinnessy writes "According to the New York Times, some music labels have deliberately stopped selling some new singles on online stories such as iTunes or Rhapsody while promoting songs on the radio, so that listeners will rush out to buy the CD album instead. The album appears in itunes at a later date. Not everyone seems to think this is a good idea. From the article: 'The labels are shooting themselves in the foot,' says Rhapsody's Tim Quirk. However, Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It!"was downloaded approximately 5.3 million times in the same release period."

Comments

Interesting quote...

[addbo]

"If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."

This is a weird analogy... if I buy a single song... that's not like buying the upper right hand corner of a Picasso (though with some of Picasso's work I might enjoy it more). It's just like buying a single painting... you select the one you prefer and purchase it. You don't need to buy the whole body of work that an artist produces to appreciate the artist... a song I would equate to a single painting... meanwhile an album is just multiple paintings by the same artist.

At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for? How much does it cost to produce and distribute these CD's to each of the retail chains? How many of those CD's that are produced are in fact sold? So how many just sit on the shelves forever? Or... if you don't produce enough to meet demand... how much money have you lost opportunity costs?

Digital just seems so much more efficient... and this robbing peter to pay paul is silly... yes if you only sell a track in a single medium... of course the volume will rise for that medium... but in the end are you making more money or less? (Say you sold 300,000 tracks on iTunes... cost/benefit?)

Digital uptake is just ramping... if they start doing silly things like this to make it harder for consumers to get their content... either they'll go back to piracy... or it'll stop the whole legal digital distribution before it's even had a chance to become mainstream.

Re:Interesting quote...

[e4g4]

Excellent point. I do think, however, that Mr. Brummel's analogy is apt - in some circumstances. Take, for example, Sgt. Peppers Lonely Heart's Club Band (by the Beatles). As an album, it was quite popular (don't have any specific numbers), and yet, not a single song on the album hit the Billboard Chart #1 spot. The reason for that, IMO, is that the album was a complete work - the individual pieces did not make much sense. The same can be said for Dark Side of the Moon (whether or not you play it over the Wizard of Oz).

The problem, however, is that this is not how pop albums are put together. Basically, they take what they consider to be the best songs on the album, and put them within the first five tracks of the cd, and then fill in the blanks with songs that very few people listen to so that they can justify charging full price for the cd. In this case, it makes perfect sense that iTunes drives CD/album sales down (regardless of the worthless statistical data in the article) because there's no reason to buy the cd, which threatens the record company's business model.

Really, my point is that the record industry has no one but itself to blame. If you produce something that people don't actually want to buy, and then package it with something they do want to buy, and then force them to pay extra for the crap they don't want, do you really think that when offered the opportunity not to pay for the crap, they wouldn't take it? I mean, doesn't it piss you off that that winter weather package on your car comes with a racing stripe and chrome rims?

Re:Liars, Damned Liars and Statisticians

[Karzz1]

They did that deliberately to get numbers like that that they hoped would be misinterpreted.

"They did that deliberately to get numbers like that so that they can use these misinterpreted numbers in their propaganda machine."

There, fixed that for ya :)

Not a good idea to follow the movie industry

[ursabear]

Stick with me on this for a minute:

If my family wants to see Harry Potter [insert episode here] at the movie theater, we'll go see it so we can have a blast sitting in the dark listening to the overly-amped up sound and get a fun thrill from the big screen.

However, if the DVD were available at the same time, we'd still go to the theater to do the family thing, then buy the DVD if we liked it.

Means this: we go to the theaters to see the things in which we are interested - irrespective of DVD availability. We then wait with anticipation for the DVD for a release (and generally buy it on the day it is released) if we really liked the film. What I'm trying to say is, if we like it enough to patronize the film, we'll see it several times.

Enter the music industry: The industry is trying to figure out how to stay in business, and along the way, they're forgetting something critical: the fans. If the fans like it, the ones who pay for music will buy it (and some of us will buy the CD if we want to support the musician(s)). Those that don't buy music probably won't buy the downloads or the CDs.

Key point: If the artist makes the fans happy, they'll buy whatever makes the fan happy (CD or individual download). Preventing one of the means of purchasing is not helping the artist or the label. Truthfully, (this is a personal opinion, folks) if I really like a given artist, I'll buy the CD - even if there are some tunes to which I won't listen - so I can patronize the artist. If I like one tune of a given artist - but the artist doesn't generally float my boat, then I'll download the one tune and not buy the CD.

Cutting off means of distribution is not a smart business tactic.

pop music value meals

[fermion]

I see this kind of like the fast food value meals. A customer can either buy an individual item, or for more, but less than the seperate items, the customer. The fast food stores implement these schemes to, among other things, increase the average order price. This then begs the question of why fast food stores don't implement a value meal only policy? Sure, some customers would be lost, but the price of a hamburger probably barely covers costs.

This attempt by the labels to push albums is nothing new. The last time we saw, which was only several years ago, was when they were trying to stop the sales of singles. The singles were cutting into sales of albums, and the theory was that if singles were not available, then the consumer would be more likely to buy an album.

I think the more likely aspect is the key. Wiithout singles, one might be more likley to record a song from the radio or just copy it from a freind. Even then there were albums that are so bad no one wanted anything but the same album. Not even the b-side was worht anything. With singles it was more likely all parties would be compensted for the product the consumer wants, and if we dig our heads of the artistic bigotry, when one is talking about selling a million albums, we are fundementally talking about providing a product that the student wants.

So, when singles were pulled, it was a statement that the labels would tolerate more copying in the hope they would end up with increased overall profits, even if the formula used to calculate royalties meant the perfomers and other parties recieved less. I wonder if this algebra will work out in the current climate of rampant unlicensed distribution of any hit track, not to mention much more sophiticated distribution channels for used albums. Frankly there have been way too many times lately when I have gone to iTunes hopeing to legally acquire a track, only to find it unavailable or only as an album. If it is an older album, I can get it used for much less than iTunes. If it is a new album, I soon will be able to get it used. Does this help the company bottom line?

Back to the original question. If the fast food joint only offered value meals, then a person with only a burger would cause a great deal of havok at the unfairness of the situation, disrupting bussiness. And such a person would have a point. The burger is seperate, you could sell it seperately, but you choose not to. It is simply not worth the effort, despite the clear benifits.