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The Music Industry's Crisis Writ Large
The NY Times has an opinion piece that makes starkly clear the financial decline of the music industry. It's accompanied by an infographic that cleverly renders the drop-off. The latest culprit accelerating the undoing of the music business is free, legal online music streaming. "Since music sales peaked in 1999, the value of those sales, after adjusting for inflation, has dropped by more than half. At that rate, the industry could be decimated before Madonna's 60th birthday. ... 13- to 17-year-olds acquired 19 percent less music in 2008 than they did in 2007. CD sales among these teenagers were down 26 percent and digital purchases were down 13 percent. ... [T]he percentage of 14- to 18-year-olds who regularly share files dropped by nearly a third from December 2007 to January 2009. On the other hand, two-thirds of those teens now listen to streaming music 'regularly' and nearly a third listen to it every day."
The words 'music' and 'industry' were never meant to go together. Music should come from the heart, not the wallet. This idea that you can become wealthy by being a musician is a new one and we've suffered for it.
http://twitter.com/OLDTELEGRAM
Industry with a track record of charging insane prices for crappy products, ripping off artists who they claim to represent, and developing a business model of suing their own customers in gross abuse of the legal process is experiencing financial difficulties. We'll be providing blow-by-blow coverage.
512 MB RAM, 20 GB disk, 200 GB transfer, five datacenters. $19.95/month.
An article about an industry that is dying, published by an industry that is dying. Both are being killed by the same new technology.
Somehow the fact that you refer to pirated music as "warez" makes me somewhat skeptical that you have ever actually done so. Warez is the term for cracked software, not music.
That aside, streaming music services are at least as bad as the ITMS and similar services for the music industry. Back prior to all that hogwash you were pretty limited in your ability to buy music in single track increments. Sure you could get a single, but you couldn't buy 8 out of 11 songs, and if you wanted a song which wasn't as popular you were stuck with buying the album.
These days, that's not how it's done, you only have to listen to the songs you like without ever having paid for the rest of the tracks. I'm sure that sounds good in theory. But take a look back at previous albums, I doubt most people would've really appreciated the higher quality of Nirvana's Nevermind over their later In Utero, worse in a sense is that if you clip off the non-music from In Utero it's would seem like a better period of work. As things are done more and more like that there is less and less incentive to spread the effort out, rather than focusing on a quality album experience to justify buying the album, that time and money tends to get funneled into a couple of tracks.
That and the generally poor production quality of so many albums pretty much insures that quality music is going to be much harder to come by than it has been in the past. If we get really lucky, all of this will be largely neutralized by the increasing easy of independent groups getting exposure and producing their own work without the suits.
The artist will win. No more signing away most your rights with shady contracts. No more skimming 99.9 cents on the dollar for CD sales. No more lock in for future albums. Artists are making their money by selling direct to consumers with online distribution channels because it gives the unknown artist a shot. It also promotes better music because when the consumer has better choice, they will choose better music.
The direct sales channels will continue to grow and standardize so I expect the traditional industry losses will accelerate.
Camping on quad since 1996.
The reason why streaming music is taking over is because radio is crap. Seriously, if you don't like hip hop, pop, country or classic rock, there are -no- stations other than that anymore. If you have musical tastes other than that, too bad. You won't find any terrestrial radio that plays that. So because of that people stream more, in general streaming music ends up being better and have a greater variety. If I can't find a terrestrial radio station that plays music I like, I'm going to then listen to streaming music. Because of that, why buy the music when you can with a bit of searching find the streaming music?
Taxation is legalized theft, no more, no less.
If by music industry you mean anything that is distributed in the form of iTunes or mp3's with a useful half life of a month or so, I'm all for its demise and good riddance.
The vast majority of that sort of stuff is dung. If we are talking about taxing cigarettes and sugary carbonated soda and fast food, no reason to not extend that to this sort of "music" as well.
Once this sort of stuff is gone maybe people will get a chance to listen to real music, in person or played back on high-fidelity equipment.
It might be an epiphany.
</pedantry>
Cantankerous old coot since 1957.
There was once, music tapes cost SGD $8. When CDs hit the market, they cost SGD $30, but it was promised that they would go down to the same price as tapes one day. Isn't it time to sell full albums at SGD $5, considering the volume that the music industry is able to produce? Isn't that what industries do best - to give what the market wants at a cost leveraged by the economics of scale? Given that the packaging that comes with the CD does cost something to make, but essentially, isn't music, as a commodity, like software - make once, and sell it many times over? Given the international market exposed by the internet, is online music, too, overpriced? Or perhaps society needs to rethink the place of musicians - perhaps they could be like open source software authors, who have a day job?
There, fixed that for you. The record industry is the one that makes money on recordings. The music industry is the one that makes money on music in general including concerts. The music industry is fine and will be fine. The record industry is fucked.
CD used to be worth buying prior to the RIAA getting greedy and homogenizing the music into bland Muzak. To make matters worse, all new and re-released albums suffer from the "Loudness War" mastering. So before all this crap happened in the industry, CDs were about quality and hi-fidelity.
FYI, I treat my old stock CDs like faberge eggs. Priceless!
Life is not for the lazy.
These reports all say the same thing: concert ticket sales growth more than makes up for the decline in recorded music sales.
When I was a teen, about 15 years ago, I was also listening to streams. But at the time, it was called ... FM radio!
Hi. I'm the American actor, violinist, ballet dancer, and sculptor. We have little sympathy. Welcome back to having to make art because you love it, and not because you expect it to be a lottery ticket.
These "music industry" people want the equivalent of 250 thou for a 25 grand commuter car. nuts. They wonder why sales are off, whereas a billion music purchasers know exactly why sales are off, they just don't feel like getting price gouged anymore.
I suggest the "music industry" lay off all the coke and booze for a year or two then come back and rethink their stance on pricing, for digital bits down the tubes or the same digital bits on two cents worth of plastic. Their "per unit" pricing is from decades ago, it doesn't come close to anything rational anymore. When it was very expensive to make a copy for sale, sure, it was understandable, but now, today?? Who are they kidding besides themselves?
Tech advances and much cheaper bandwith should have allowed them to both drop prices dramatically, plus increase sales dramatically, instead, they have clung to those old price models like a wino to a jug of t-bird with ten drops left swirling around the bottom. It's pathetic really. I bought music pretty steady from the late 50s until the 90s, that's forty years of being a customer..then...just finally one day got annoyed with the price gouging, quit then, my one guy boycott. I don't pirate, but I won't pay those ludicrous prices either for some digital download copy (a buck for a few megs, who do they thing they are, telco ringtone sellers??), and certainly not a lot of folding dollars for a dime's worth of plastic with some cardboard "liner" nonsense.
OK, maybe the car analogy sucks, how about computers? A decade ago, what did a decent desktop system go for, and what were the specs? Now, today, you can get something much faster, with equivalent increases in installed RAM and larger HDD and better video card etc, and for much less cash. You gets lots more, for less money, because of tech advances. And that's tangible hardware, manufactured stuff.
A decade ago, an album cost how much? And what do they want for it today? Oh ya, the same. And to *download* it they want similar loot? HAHAHAHA
Like I said, "nuts", you lost a good customer for being price gougers. In fact, looks like you lost millions and millions of customers, and the younger folks are starting to not even *be* customers in the first place, because they know even better that those "copies" just aren't worth what you ask.
The way I see it, the recording/copying technology created the industry in the first place at the cost of local/family musicians. The next iteration of technology made them obsolete. Recording execs are like telephone switchboard operators - one wave of technology created the role, the next wave destroys it. They're just trying to manipulate the law to defy the reality of technology ... why should this be different than any other industry since the start of the industrial revolution? (oh right, nobody's "profiting" off this change - can't allow anything to happen that doesn't make the rich richer, can we?).
I'd like to know what titles people were buying as CDs in 1999. New stuff or old?
Could it be that people were replacing their vinyl in 1999 and before, and that the whole peak in 1999 was really an effect of replacing one version of something with another? I'm not saying that the decline isn't real, I'm suggesting that the curve is much less than it seems and the peak is artificially high.
A little bit of common sense is in order for this topic. A lot of people seem to be on the right track, though.
The main consumers of new music tend to be people younger than 30. The average person in that age range, for the most part, grew up with the internet in their home. Napster alone is 10 years old, and how many million people were using that? MP3's were around and traded long before that, too. I myself am a youngin' compared to a lot here on /. and I remember trading .wav files for music swapping before mp3's were the norm.
Let's face it. No one can reasonably believe that the record industry couldn't come up with something better for distribution in the 10 years since Napster. Consumers have become disillusioned and know they're being taken for a ride every time they buy a CD. I have a hard time justifying even walking into a record store, unless it's privately owned. If it's a chain, I laugh at the older people inside as I walk by.
The radio is being programmed by computers based on how much radio advertising dollars can be generated. There is NO variety in the music whatsoever on terrestrial radio, and you'd know it too if you could catch a few songs back to back. But... when's the last time that's happened?
I haven't been able to go 15 minutes on any given station without hearing 5 minutes of commercials. They even have commercials promoting the station you're already listening to. And, to top it off, some of those commercials advertise how few advertisements the station has as compared to the other station in your town that plays the same songs and to complete the cycle of absurdity, you can bet your ass both stations are owned by the same company... Clear Channel. The people who still listen to terrestrial radio do so only when there is no other option. It's the musical equivalent of public transportation.
It's their own fault no one wants to buy a CD to listen to the same garbage they hear every 30 minutes on the radio, too. Who the hell wants to hear the same garbage on CD's, that they're forced to listen to already on the radio. Nothx.
Americans lost the right to choose what they listen to years ago. The internet is giving it back to them. It seems only natural that this would happen to the recording industry. But hey... the recording industry made a SHITLOAD of money, right?
What I can't figure out is how can they still feel sorry for themselves, and how can they expect consumers to feel sorry for them?
I bought the first Velvet Revolver CD, which installed a rootkit on the computer to prevent you from doing anything other than listening to some shitty WMA files. After that I swore I would never buy a CD again, and I haven't. You only screw me once. So until we have no DRM and a perpetual license (buy the music once, have the rights to any format) I'm done playing their game.
I think a lot of the discussion around this issue ignores the fundamental fact that most of the activity in the music industry for the past twenty years has been due to the need for the music-consuming public to 'catch up' on the music that has been produced in the last 500 years or so. The industry went out of its way to force us to re-acquire this back catalog first on tape (replacing vinyl) and then cd (replacing tape). The bottom line is that the actual amount of salable new music produced each year is tiny compared to the amount of new material being produced.
I view the late 90s as an enormous aberration in history. The back catalogs of western music were basically thrown open to the public and there was just this frenzy of buying as well as looting (piracy). Now the cat is largely out of the bag, and the industry (in whatever form it survives) will have to get back to reality and balance its expenditures with whatever it actually is producing. Unfortunately for them, without some massive disruption in continuity of digital information, they will never have an opportunity to re-sell that many hundred years of human labor again.
(The previous two paragraphs are based on conjecture, anecdotes, and my own reasoning. I think my conclusions are fairly pedestrian, but if anyone has any statistics or studies as to the revenue generated by back catalog, I'd be interested to see them.)
http://www.prorec.com/Articles/tabid/109/EntryId/247/Over-the-Limit.aspx
RTFA, its a long one but a good one. Why do you think that the music on radio fails to hold your attention, or fails to impress?
I want to delete my account but Slashdot doesn't allow it.
80 percent of all revenue came from about 52,000 songs. That's less than one percent of the songs.
So much for the internets "fat tail".
I am predicting that the book industry will soon find itself in the same boat as devices like the Kindle become more.
Skip ------ See the latest from http://www.anArchyFortWorth.com
My wife can bang out old Beatles classics on her guitar all day, and it cheers me up a thousand times more than any of the crap on the radio or the Internet.
Sometimes I suggest a song to her that she doesn't know. She takes this as a challenge, learns the song, and then serenades me with it.
Life is good.
I get my music from jamendo. It's creative commons licensed and awesome. As for software, I do it with Ubuntu. --and let me tell you, Freedom IS the way to go.
Don't be selfish. If you have good stuff, start a torrent of it!
Circumcision is child abuse.
I listen to music the RIAA does not own, but they'll still shut them down because they think it's infringing on their bottom line.
*DrugCheese rants*
I read in a few of the comments posted here that many of the users here believe that this bodes ill for FM Radio. As someone that was just recently laid off from the interactive portion of a large radio broadcaster here in the states, I can tell you the only thing that will kill FM radio is FM radio.
What I mean by that is that the broadcasters themselves, like the rest of the music industry, have largely been highly resistant to change. Be it the embracing of interactive advertising, or even recognizing that they now have a lot more competitors than just the other radio stations across the street (Hi Internet Radio!!).
The way I see it, this is an amazing opportunity for music in-general to become much more highly diversified and with more emphasis on bands being local/regional sensations rather than the end-goal of national/international sensations (although that possibility will always be there). Anyway, local FM radio stations could very well be positioned to be the thought/taste leaders when it comes to which local/regional bands become "big." A hearkening back to the hay-day Program Directors and DJs had in the 80s where they pretty much ruled the roost in radio stations and had much more weight in determining which bands became popular. It would allow each radio station to become a sort of... mini-label in and of itself.
However, FM radio has been moving away from local largely due to Clear Channel and its crowd-sourcing, cost-cutting efforts of sharing content across stations/regions. But perhaps with how the economy has been kicking CC's butt, this trend could change. But it will take time, and it will take some of the larger broadcasters taking a risk. Will it happen, I don't know. But the opportunity I think definitely exists.
The graph is indeed pretty illustrative, but to suggest the CD is being killed off by streaming is misleading, because they don't graph the main competitor to the CD.
That's right, the minidisc.
The records labels screw EVERYONE over, including themselves. If this wasn't the case, why do SO many artists start their own labels or fight long legal battles to get out of the constricting contracts they signed when young?
Why has the music industry not leapt on digital distribution from the beginning? They could have totally controlled the market by just creating iTunes before iTunes.
But they don't because the music industry is NOT about promoting artists or giving customers the best value for their money. it is about making the maximum amount of money for the least amount of work. Now you might call that sensible business, but it isn't.
McD sells you mayo for your fries as an extra, that is sensible. Selling you the salt as extra isn't and would just turn customers away.
The music industry would wish that you had to buy a CD for your stereo, a seperate MP3 for your portable, another CD for your car, a ringtone for your phone and then also pay them a fee for any blank CD's, hard-disks and media players you buy. That has nothing to do with promiting music anymore, that is pure and simple greed and comes bloody close to strip-mining the industry. Getting the last money out before it all collapses.
Record labels support the artists. My god man, read a book, just once.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
LISTEN to a top 1000 and wonder about the many 1 time hits. Some of them were of course produced but a lot of them just happened by chance. Someone heard it, played it for some friends and it spread. Music promotion is overrated for a lot of artists, because either they never get it in the first place OR their big hit happens from word of mouth while they pay the record label for all the publicity that didn't work. Oh, you thought the record labels payed for promotion? How silly of you.
The record labels do a LOT less then a lot of people seem to think and still the best way to promote yourself is just to send your CD to every radio station and offer to perform live whenever you can to hope enough people hear your music to spread your music. And you do NOT need a billion dollar industry coming up with endless schemes to drive customers away to do that.
In fact, an old dutch project "One day fly" showed that you do not need the music industry at all to create a hit. A radio presenter and some friends made a crappy song, promoted it heavily on radio (themselves) and voila, instant hit. You need people who can play your music to others to get noticed. The record labels do precious little more then buy you some airtime and that only for the big sure fire hits.
Oh and for the small artists, all that promotion you end up paying yourself for, so that even when you score a big hit, most of the profits will be sucked up by the record label.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
That's like saying of the illuminated book 'industry' in 1499 that "the latest culprit accelerating the undoing of the reading business is free, legal printing presses".
The measure of an industry is not the size of its profits (except in the minds of those mythical entities called corporations). It is the extent to which it affects people's lives. I could argue that the recording industry actually diminished the social culture of music, because it meant people could listen to music without interacting with the performer. On the other hand, it did allow more people to enjoy music by the most gifted performers. As does radio. As does the internet.
I have cash to burn, but I am definitively too old. The stuff which they put out for sale, DO NOT interest me. What I like is stuff like electrical music vangelis/Jean michel Jarre , classic from funeral march for a marionette to tocatta in c minor, and a few rock/hard rock group and strange stuff (queen, megadeth, smashing pumpkins, and a few other less known ; commercial stuff like e-nomine, and a few other like in-extremo). For the first group, there isn't much which was put to sale recently and has got the quality of an oxygen, or heaven and hell. For the second group you can own so many version of them until nothing new comes out, for the third group, i search and search but rarely find stuff of interrest.
So what bring us this long rambling on my taste ? I started buying a lot of CD end on 90. Then by 2002 it dwindled down. Because my classic collection was complete, and for electronic music I did not find anything new, except a few rare stuff coming from Japan (Idea/eufonius). Sure, I would wish to see much more new stuff, but my exposure (university) has dwindled only to friend and colleague. So now a day I try pirate stuff in hope of finding something to buy which please me , and I throw everything away after trying. The bottom line is that I buy no CD , not because of the crise, but because nothing cater to my taste.. Yeah my taste are eclectic.But hey nobody is perfect.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
How come 'the album' merits preserving as an ideal unit of quality music?
An album is based on the available bandwidth in a vinyl 12-inch record, not on the attention span of the listeners or on the creative urges of the artist(s). So how come it's sacrosant?
So much of this debate is riddled with "it's been that way since I started listening to music, so that's the way it MUST stay" points of view, mostly from people who are so heavily plugged in to the music scene they're almost incapable of stepping back and seeing all the other possibilities.
Music is about to emerge from the ultra-commercial cocoon it's been in for 50 years, and I can't wait to see what it turns into
Business/App ideas are like arseholes: everyone's got one, they're mostly shit, but very rarely they contain a diamond
If we assume average teenager has 100 Euros per month to spend ...
20 years ago, they mainly spend it on music, beer and cigarettes.
Today they spend it on mobile, internet, DVDs, computer games and some for music.
There are so many options beside CDs.
Music industry simply lost entertainment money share.
Few years ago a pool was made in London: kids prefer to stop going out for beer in order to spend last pounds on their mobile phone.
(The previous two paragraphs are based on conjecture, anecdotes, and my own reasoning. I think my conclusions are fairly pedestrian, but if anyone has any statistics or studies as to the revenue generated by back catalog, I'd be interested to see them.)
Likewise.
When the CD was introduced, everyone who wanted the new format ended up having to upgrade their collections or continue to use their current LPs and casettes until they wore out. The CD was not recordable (and would not become recordable for another 8 years), so dubbing one's existing collection to CD was out of the question. Still, the promise of the new format was enough to finally kill off vinyl, as no doubt customers were sick of worn out records and eaten cassettes, and loved the idea of a format whose marketing promised a century of readability without analog degrading. The CD gobbles up vinyl's market first, then the cassette's after the introduction of anti-skip buffers. Eventually people's old collections are either worn out or become difficult to play due to inconvenience, and people start re-buying their old music on CD. Sales skyrocket, because the labels are not just selling their discs to new customers, but also to old customers who bought the same lineup of recordings years ago, and were replacing their recordings at a rate faster than the usual re-purchase due to destruction of the old medium.
But the CD, being a digital format, had an advantage over the previous formats of vinyl and cassette. Because the tracks are digital, they can be extracted and easily transferred to another medium. The labels knew about the transfer of recordings from a CD to another medium, but anticipated the process would be in the form of a conventional dub using analog means, much like what the casette tape allowed. Hence, the CD did not have DRM, and no attempt was made during the specification process to prevent digital extraction. Once digital music started becoming the norm, the prediction was that customers would dub their tracks using S/PDIF to MD or DAT, or to the new CD recorders. So the labels lobbied for the AHRA and SCMS.
Of course, what happened instead was that these new digital formats failed to gain traction, and a new more efficient method of digital transfer arose: the digital extraction of tracks to a hard drive using a computer. Unlike a dub, ripping did not require playback of the source medium. Despite the original rips of CDs taking a long time due to encoding and slow processors, the difficult task of ripping only had to be done once. Once done, the tracks can be copied to any writable medium with ease. If one wanted to copy a CD to another CD, a computer allowed for a verbatim copy from source to destination without the need for any dubbing. Suddenly, any future form of music storage, which would inevitably be some sort of digital file, could not be as successful as the CD. Even tape, which also had the ability to record from another source, would inevitably have made more money from back catalog updating due to the tediousness of dubbing, as opposed to the straightforward process of ripping.
Phillips and Sony outdid themselves with the CD, making it almost impossible to create a successor. Attempts to try (DVD-Audio and SACD) failed because their features catered only to a select few and due to low player and disc support. Digital distribution is successful because of the a la carte model of allowing the selection of individual tracks, and the convenience of having songs beamed directly to your hard drive, since a new CD would just end up there anyway. But it would be absurd to re-buy all of your music online if you already have a CD, as you can just get the track from your existing collection, leaving back catalog purchases to those who do not know about ripping.
So to compare the revenues of labels from their peak in 1999 is absurd, as much of that revenue no doubt came from back catalog purchases. Instead it would make far more sense to compare it to revenues from before 1981, before the CD came out (adjusted for inflation of course).
Because people that do not learn from history, frankly deserve to be derided in any way possible.
You said "he big label records AREN'T there to fuck everyone over."
The reality:
http://news.bbc.co.uk/1/hi/business/2289224.stm
http://archive.salon.com/tech/feature/2000/06/14/love/print.html
So they screw both artists and consumers.
And that is only for starters...
Please, get real.
IANAL but write like a drunk one.
There's a general misunderstanding I see here anytime record companies are discussed. Time after time, people say that the label pays for all sorts of things to help artists. The truth is that all of that stuff isn't given to the artists, it's an advance on future royalties.
The artist has to repay the label for the cost of recording an album. The labels charge artists for promotion, too. It's a universal practice to include a "breakage" fee, which means the artist only receives royalties on 90% of sales. Concert touring expenses are also recoupable, paid for by the artist. Royalties are calculated on wholesale prices, not retail prices, so deals with record clubs can be based on deeply discounted wholesale prices and lower royalties
The industry is geared to produce a few smash hit artists. Those who aren't given preferential treatment are generally stuck with big debt to the label. If the label decides not to release an artist's music, the artist can't release it on his own - and this happens quite a lot. The label can insist that the artist remain under contract for 7 years or more, while never releasing any recordings, so the artist is essentially silenced
There is no hope of getting a song on a commercial radio station without the influence of "independent promoters," who have a lock on what stations will play and only promote songs after receiving huge payments. Radio airtime has nothing to do with the merits of the music. No song gets played on commercial radio without a payment to an independent promoter
Most people who have very strong opinions against the music industry have little idea of exactly how bad the industry is. It's a rotten and corrupt industry.
Read what Janis Ian has to say. Read The Truth about the Music Industry."