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At Atlantic Records, Digital Sales Surpass CDs
The NYTimes reports that Atlantic is the first major label to report getting a majority of its revenue from digital sales, not CDs. Analysts say that Atlantic is out in front — the industry as a whole isn't expected to hit the 50% mark until 2011. By 2013, music industry revenues will be 37% down from their 1999 levels (when Napster arrived on the scene), according to Forrester. "'It's not at all clear that digital economics can make up for the drop in physical,' said John Rose, a former executive at EMI ... Instead, the music industry is now hoping to find growth from a variety of other revenue streams it has not always had access to, like concert ticket sales and merchandise from artist tours. ... In virtually all... corners of the media world, executives are fighting to hold onto as much of their old business as possible while transitioning to digital — a difficult process that NBC Universal's chief executive ... has described as 'trading analog dollars for digital pennies.'"
I haven't seen a single new piece of vinyl (or CD, for that matter) listed on dancerecords.com since July.
This happened very suddenly, and it's a bit startling for those of us who have invested in actual vinyl turntables...
CAn'T CompreHend SARcaSm?
"'It's not at all clear that digital economics can make up for the drop in physical,'
Jeez, you don't have to physically make anything anymore and you don't actually have to ship anything anymore. All you have to do is put up a web site and let people send you money...lots of money.
But you're not sure if this incredible change in your cost-of-goods-sold structure is going to make up for your astonishing incompetence as an marketing executive?
I don't know, guy, maybe you ought to be exploring career opportunities in fast-food-service industry. And let some unemployed electronics tech have a shot at your present so-called job.
I couldn't do any worse than you are.
Or just replace "fairer" with "fairer for us" - fairer doesn't really mean much in business anyways. It's not that they think the artists owe them more money. It's that they want to find a way to get more money out of the whole system. Honestly, if they weren't doing that, they probably wouldn't be doing their jobs. Sure, it's easy to look at the industry and say it's outdated, say they don't provide value anymore, and should die. But is it reasonable to expect them to just roll over and die? I know if it were me, I wouldn't. If I needed to make a certain amount of money to consider the venture "successful", and the total pie got smaller, then my option is to try and get a larger piece of the pie. The counter to them actually getting that larger piece isn't to have them ask for less...it's for the other people providing value to the business to say no.
Sure, they're probably going about it the wrong way. I have to say, I think they're eventually going to fail. But that doesn't mean we should expect them to just give up. And we certainly shouldn't be surprised, or even appalled, when we hear about them attempting to stay alive.
because in the scale of record companies CDs are nearly free anyway. They're paid for as soon as they ship by record stores... then the stores have to worry about stock. The number of releases has cut way more than 37% as they only cater to the very large stores like Walmart and Best Buy... independent record stores that sold new bands went away long before napster came on the scene.
âoeThe real question,â Mr. Rose said, âoeis how does the record industry change its rights structure so it captures a fairer percent of the value it creates in funding, marketing and managing the launch of artists?â
Arguably, when the record industry lost their stranglehold on the various ways that the public could be introduced to new acts, their marketing and launch management value creation was significantly reduced. Furthermore, competing in the much larger pool of availble unlimited digital stock, one would naturally expect prices to compete downward.
Also, the number of ways in which the record industry payout structure has been unfairly skewed towards the record labels is well documented. One would expect this to gradually tip downwards back to a more reasonable medium.
In the grand scheme of things, a decent recording can be made at a 10,000 dollar studio, pressed at one of any number of professional CD producers, and distributed by any number of available distributers. Add in a 1,000 dollar HD video camera for youtube promotion, and you have a comparable music system powered by the creator's time. That's a highly efficient alternative that didn't exist ten years ago.
Assuming our cultural music needs are being met, a 25% drop in overall spending on music could easily be because we have become 25% more efficient.
The ______ Agenda
Possibly, pre-successful musicians need an honest union
A friend of mine once made the mistake of joining a musicians' union. Never did him any good, and now, he can't perform at all without first paying dues to said union. Even before the economy collapsed, he could not get enough money to be worth performing.
Don't try to out wierd me, three-eyes. I get stranger things than you, free with my breakfast cereal. --Zaphod Beeblebr
Speaking of revenue, the statement "By 2013, music industry revenues
will be 37% down from their 1999 levels" means jack shit because it says nothing about profit. Of course revenue will drop significantly if you don't have to make, package, distribute and find retail shelf space for millions of individual physical items around the globe.
Personal anecdote of physical vs electronic: During the 90's I was the technical lead on a large project with 8000 remote mobile users, and when I say remote I mean Australia wide coverage - GSM, DATATAC, sattelite phones, radio link exchanges, and the like. To upgrade the software for all 8000 users by CD was costing ~$2M/yr (mainly in down time for the user to get the CD and install the upgrade). It took 4 programmers including myself ten minutes of thought and 6 months of work to build an automated upgrade system that did not require any action by (or delay to) the user.
The board of directors were so impressed with the $$$ signs that they wrote a long and flattering letter of appreciation to each of us, but they were a telco at the "bleeding edge", I imagine a record label would have taken us to the basement car park and shot us.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
A physical CD plus case and booklet is under a dollar to press in quantity, so the physical disc isn't actually a huge part of the price tag anyway.
I so wish they'd get more into the Long Tail. Imagine record companies reissing their back catalogues as FLAC or Apple Lossless. They could sell them for a couple of bucks under the CD price and market it to record nerds who want obscurities it's infeasible to distribute physically.
It's like they still don't understand they're not competing with paid downloads, they're competing with free.
http://rocknerd.co.uk