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.'"

Comments

Tough shit.

[mrbcs]

Cry me a farking river! If these industry assholes would have got on the bus in 97, they may have a viable option now.
They're so narrow-minded that they can look through a keyhole with both eyes at the same time.
The industry should have been the first out the gate with mp3's, giving the customers what they wanted and not what the record industry wanted to sell them.
It's almost poetic justice, the record companies have screwed the artists for years and now they seem to be getting their comeuppance.
I care for these assholes about the same that I care for that dinosaur car industry. Change or die!

Re:Tough shit.

[penginkun]

How many CD's did you buy in the late 90's that was complete crap besides the one song they played on the radio 3-times an hour?

So there were NO good acts or albums from the late 90s? Seriously? None?

I'm SO sick of this argument. The late 90s were a bonanza of awesome music. If you were wasting your time with top 40 pap that's your problem, and not really the fault of the record companies. The same is true today: there is an unending stream of incredible music being released by talented musicians and if you can't find it you've got nobody to blame but the person you see in the mirror every morning.

Re:Tough shit.

[AmberBlackCat]

I think it would help the CD sales if they'd stop shipping CD's that won't play in a computer.

Re:Tough shit.

[philipgar]

Your last statement is only partially true. The number of releases record labels make in a year has reduced, and they have started catering more to the very large stores. However, this was the case quite a bit before Napster came onto the scene, and the mp3 revolutionized the music industry. The large stores had started swallowing up the small. It is false to say that the small independent record stores are gone. There are still quite a few of them that flourish. The people who love music and are willing to pay for it often choose to go to the small independent stores, and always will. The store is far more about the personal interaction, and the recommendations that can be made there. What has hurt the small stores the most isn't the Walmart's and Best Buys who have small selections, low prices, and high volume, but the Amazon's of the world who have practically unlimited selection, and the benefits of scale that come with being so large that they can get lower prices. Many music fans have started shopping online for CDs they used to buy at the small independent stores.

The large record companies shot for the gold in the late 90s by focusing on the big hit of the day kind of thing. Under such a market, they create demand for music, and sell CDs (albeit to a limited number of artists). However, when you concentrate on the masses and the hit of the minute, you lose out on loyalty. The loyal fan base that goes to the small independent CD stores didn't want to switch to buying CDs at Walmart, and they didn't care about the flavor of the month. They bought lots of CDs by bands that aren't particularly profitable to the labels (but tended to bring in a steady stream of income). The group that they won over with low prices at Walmart, and mass consumed discs has little loyalty, and why should they. They could care less where they get their music from, and napster is as good a place as any, but the price was right. Besides, who cares if the back street boys didn't make a few extra bucks, the bands they were pirating from had more money than they needed anyhow.

At the same time this happened, many more of the smaller bands that struggled before said screw it to the major labels, and found that if they play to their niche they can end up okay. They'll never strike it big, but they can keep doing what they're doing. It used to be that no established artist would be on an independent label unless they decided to create their own. Today we have many many examples of well known artists with loyal fan bases going onto smaller labels that better support their needs. These places are still going strong, and still will. What the labels are crying foul on is the fact that they can no longer create millions of potential fans who will go out and pay $10-$15 (assuming walmart prices) for the mass produced crap that they're selling. That said, I imagine their revenue stream for the millions of ringtones they sell to people is earning them a nice chunk of money . . . Until people find an easy way to do that themselves that is.

Phil

CDs are digital!

[Anonymous Coward]

Ummm... how are we thinking that CDs aren't digital?

The Labels Want More Money...

[gavanm]

There is an interesting paragraph in the article....

The real question, Mr. Rose said, is 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?

To paraphrase - we think the artists owe us more money

Re:True in the DJ world, too.

[v1]

you think that's bad? just try getting ahold of blank punchcards sometime!

Re:Can someone help me figure out the ethics of th

[Renegade Iconoclast]

It isn't right to steal, it's true. However, our rights to the public commons have been stolen by Disney and Congress. Irving Berlin's estate still gets royalties for Blue Skies, for crissakes. Therefore, perhaps a bit of civil disobedience is in order. It depends on your calculations.

Atlantic Records are bad guys

[NewYorkCountryLawyer]

Atlantic Records is one of the most common plaintiffs in the RIAA cases. (Here are some in which it is the first named plaintiff: Atlantic v. Andersen(Portland, OR) Atlantic v. Anderson (Houston, TX) Atlantic v. Boggs (Corpus Christi, Texas) Atlantic v. Boyer (Tampa, FL) Atlantic v. Brennan (New Haven, CT) Atlantic v. Dangler (Rochester, NY) Atlantic v. DeMassi (Houston, TX) Atlantic v. Does 1-14 (Portland, ME) Atlantic v. Does 1-25(New York, NY) Atlantic v. Howell (Phoenix, AZ)(pro se) Atlantic v. Huggins(Brooklyn, NY) Atlantic v. Lenentine (Portland, ME) Atlantic v. Myers (Jackson, MS) Atlantic v. Njuguna (Charleston, SC) Atlantic v. Raleigh (Missouri) Atlantic v. Serrano (San Diego, CA) Atlantic v. Shutovsky (New York, NY) Atlantic v. Zuleta (Atlanta, GA)...) As far as I'm concerned they should rot in hell.

Re:Revenue is meaningless.

[TapeCutter]

On the bright side, I have yet another anecdote about the preview button.