Idolator
Today's Wall Street Journal features a page-one story about the spiraling steam of higgeldy-piggeldy that is the music industry. The short synopsis is something like this: We're all doomed, so get out while you can and start working in a field that promises more longevity, like dog-walking or mine-sweeping. But for those of you interested in the nuts and bolts of the story, we have a handy Q&A:
Q: So why is this story front-page news? Hasn't the industry been in decline for years?
A: True dat. But the first quarter of this year is one of the worst of the Soundscan era, with compact-disc sales down 20 percent from last year.
Q: Compact whats are down where now?
A: We know, we know—CDs hardly seem in vogue these days, especially in the land of MP3 blogs. But compact discs still account for more than 85 percent of all music sales, and while digital purchases of individual songs are up from last year, that's not enough to offset the losses from declining CD revenue.
Q: But everyone in the world bought the Shins and Arcade Fire albums! Those bands are, like, famous!
A: While their albums may have debuted in the top 10, that's not a tough feat these days. As the article notes: "One week, American Idol runner-up Chris Daughtry's rock band sold just 65,000 copies of its chart-topping album; another week, the Dreamgirls movie soundtrack sold a mere 60,000. As recently as 2005, there were many weeks when such tallies wouldn't have been enough to crack the top 30 sellers. In prior years, it wasn't uncommon for a No. 1 record to sell 500,000 or 600,000 copies a week." Meanwhile, one billion songs are traded on file-sharing sites each month.
Q: Wow. By the way, don't you find some of the lyrics on that new Arcade Fire pretty lacking? I mean, "I'm standing on a stage/Of fear and self-doubt/It's a hollow play/But they'll clap anyway"? That's supposed to be deep? It's like people are afraid to admit that it's just pretty good, not spellbinding.
A: Yeah.
Q: Okay, so how are artists supposed to make money?
A: By peddling lots of extra crap:
Jeff Rabhan, who manages artists and music producers including Jermaine Dupri, Kelis and Elliott Yamin, says CDs have become little more than advertisements for more-lucrative goods like concert tickets and T-shirts. "Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream," says Mr. Rabhan. "It's the vehicle that drives the tour, the merchandise, building the brand, and that's it. There's no money."
Q: Ouch. Okay, but labels still sell a lot of CDs through those big chains, right?
A: For now. But the article notes that "Best Buy has been quietly reducing the floor space it dedicates to music," meaning that even the big-box retailers might be growing tired of music's diminising returns.
Q: [Silence]
A: Hello?
Q: Oh, sorry—I was torrenting that new LCD record.
A: It's so good!
Comments
I think the most interesting fact from the article is that 173 million digital songs were sold, vs 83 million CDs. Digital sales are very substantial, but because record companies look at CDs as digital single sales x 10, it looks like the market is collapsing. Instead, you could argue that most CDs - particularly the ones that top the charts - are more equivalent to digital single sales x 2 or x 3, meaning that the market isn't being hollowed out by theft; instead, consumers, due to increasing competition, are reclaiming the share of CD sales that was simply fat and easy profit for record companies. This is called capitalism, and it appears to be working exactly as it should be.
maybe this comment is a trifle obvious, but the whole "music industry is a disaster" really only affects the stake holders in the current economic system. an independent label with say, zero sales and one artist really isn't effected by any of these developments, and the while cd sales may be down, the infrastructure of the music industry (booking agents, publicists, journalists) will continue to do their thing with whatever acts are financially viable- whether they're selling 150K cds opening week of 60K.
in my opinion, it the major label business model that is in freefall, but the underlying music industry itself is basically unchanged. conflating the health of the major labels with the health of the music industry is another clever p.r. campaign by the riaa, in collusion with clueless journalists.
Careful saying anything negative about the new Arcade Fire, you'll get Perpetua all up in your grill.
Rather than radically adapt their marketing strategies and ideas for selling actual music, it's been sadly hilarious to watch the major labels focus on branding their top 5-10 artists with clothing lines, cell phone tie-ins (does anyone watch music videos on their cell phones for christ's sake?), beer commercials, and other forms of celebrity detritus. Meanwhile they ignore the other 95% of their artists that don't show initital profit growth. The primary reason of course is that most of the majors are run not by music people but by MBA dorks.
When it all comes crashing down in the next 5 years, they get what they deserve in my opinion.
Here's a thought: maybe in the digital age, labels shouldn't make as much money as they used to. Redefine the brand of your label, sign good artists that represent that brand, retrench and refocus on the music. Nonesuch should be the model for major labels going forward.
Am I the only one who still really prefers CDs? Yeah, yeah, it's easy to snag that Hall & Oates MP3 when you have an earworm, but my goodness, CDs are neat and stuff.
Speaking of cell-phone music, has anyone else seen that freaking commercial with the weightlifting Bro-hem talking about "rocking out" to the "new Fallout Boy song" on his phone? I kept waiting for the punchline, but it was a FUCKING REAL COMMERCIAL!
Ahem.
What gives, Catbirdseat? That spot Gets! Me! Pumped!
I agree, capitalism is great! Especially when it means free stuff.
@Catbirdseat:
seriously broseph. People like to work out to fall out boy and anything else they remember hearing while they felt up that girl in the mosh pit of the last vans tour. (People still mosh right? It is called moshing still isn't it?).
Note to the big music companies: market corrections are a bitch, no? Perhaps now you'll have to do a little work. Here's a start: hire some people that have an MBA AND know music (we exist).
Careful saying anything negative about the new Arcade Fire, you'll get Perpetua all up in your grill.
I'm not sure who or what "Perpetua" is, but I;ve always found Arcade Fire pretty "meh." And those lyrics quoted above- wow. Even Billy Corgan would be embarrassed.
I'm standing on a stage/Of fear and self-doubt
I take it back. Even a 6th grade girl writing a poem about how she has to perform in the school production of "Our Town" despite the fact that her parents just got divorced would be embarrassed.
I'm also a big fan of the one where the guy has "got the new Fergie on his cell phone" and is eagerly advertising that fact to anyone who will listen. The only plausible response to a stranger inviting you to listen to Fergie on his cell phone is a brisk slap in the face.
But yeah, Major Labes be in some trouble. I feel you Catdirt, but I think it's too simplistic to see the Majors as so isolated from the indie music community. That Fergie money does trickle down, sometimes directly (e.g. Nonesuch, which is a Warner subsidiary) and sometimes indirectly (e.g. Major Label gives big client to publicist, now publicist has enough cash on hand to take on riskier--read: "indier," "poorer"--clients). I agree that Soundscan numbers aren't the ONLY reliable thermometer of the health of the music industry, but if the major labels go down, they're going to take a lot down with them.
@gregcoff: @Catbirdseat:
Just the fact that the music industry is relying on cell phone music to save them is either proof that the major label industry is doomed or consumers are imbeciles. I would contend that both is true.
@Catbirdseat:
OH MY GOD THANK YOU, PERSON WHO FINALLY SAID SOMETHING ABOUT THAT FUCKING... THING!
@gregcoff:
well, i think the main problem with the major label business model is the whole idea that they sign 50 bands and 1 goes triple platinum and the other 49 are write offs. now- if that 1 band is only selling 100K instead of 250K that first week, the long term impact is that 49 younger bands aren't going to be signed.
Example: V2 records closed shop after the white stripes fulfilled their contractual obligation- their 1 platinum band left, and they knew that the 49 others were never, ever, ever going to replace them because the market has changed.
so basically, that connection you outlined between majors and indies is going to disappear as a result of declining sales.
or... as was so eloquently stated by an abc reporter in 92-93:
Big labels use sales from Hootie and the Blowfish to fund albums by [dramatic pause] The Ass Ponys.
@Catbirdseat:
The first time I saw it, I started laughing. Like out loud belly laughs. I cannot imagine anything further from what is, in my mind, the Typical Fall Out Boy fan. The only two more insulting music-related commercials are that Verizon Fire thing with Hendrix, and the Fidelity Investments commercial that uses freaking In-A-Gadda-Da-Via.
More generally: Put me in the "market correction's a bitch ain't it, fellas?" category.
@catdirt:
I hear you and agree. If the majors go belly-up, those connections will start to fade and indies will adjust. I would just add that the adjustment will be extremely painful and a lot of people are going are going to suffer. Maybe it's a good thing in the long run, but when the big predators in an ecosystem go extinct, everybody hurts.
@gregcoff:
we do agree! i am actually hopeful that this process could free up alot of people who are currently employed in the major label arena as they become "free agents", continuing to work in the music industry but having to now hustle like everyone else. in the san diego area, you can't throw a rock at an indie rock show without hitting three people who worked at mp3.com (remember mp3.com?)
from what i've heard, everyone who works at a major hates their life anyway, so maybe widespread firings will be a blessing.
Yeah. I'm running into this problem for the first time. Information Society just released it's first EP in YEARS and it's only available as a digital download. No CDs, no vinyl, no nothing. Sure there are some bands that I'm fine with just downloading...but what about those bands who comprise my aging CD rack? Am I right to be sad that I might have purchased my last InSoc CD? Is it wrong to feel that teh suck sounding digital file isn't worth the same to me as a CD?
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