Don’t believe the hype: music is doing better than ever

Shane From Melbourne says:

09:23am | 06/08/09

Why does iTunes have such a crap catalogue? Half the time the song or music video isn’t there and it’s particularly deficient in Australian music.

Stig says:

10:17am | 06/08/09

Pertinent points well put. Nice stat references too. You’re making an instant expert out of everyone Nick !

miles says:

10:32am | 06/08/09

True, it is so hard to get ‘that track’ or ‘that album’ digitally…legally.
(unless it happens to be in the pre-approved top 100 list)
Given the falling costs in advertising, production, distribution and the raising public interest in making and consuming music, it is blindingly obvious that the price of music should be falling, and also that the music you want should be easier to acquire (legally).
Instead the industry favours propaganda campaigns and lawsuits to try to prop their old model of pre-fabricated stardom.

Neil says:

10:33am | 06/08/09

Interesting you never used touring and live music as a comparison Nick. Was that intentional?  Good article.

Phil says:

11:13am | 06/08/09

Incidentally, “that guy with a really bad goatee” between Chuck D and Flavor Flav is Scott Ian from Anthrax.

Maldo says:

11:44am | 06/08/09

Vinyl sales are up “a staggering ‘89%”?  But vinyl sales are about 1% of the industry at this point.  They tell us precisely nothing about the health of the music industry.
Also, saying that the number of units sold is up is terrifically misleading.  In that calculation an entire 12-song CD equals one downloaded track—both are “units.”  So if unit sales are up 10.5% in the US, that surely means that sales in dollars are very down.  Which would completely demolish the claims of this exceedingly weak article.

Peter Thornton says:

11:47am | 06/08/09

Incidentally, that post above by Phil looks suspiciously like the work of Phil Tripp.

I could, however, be wrong…

Gump says:

12:18pm | 06/08/09

The song ‘Bring the Noise’ is a great collaboration between Public Enemy and Anthrax… really did bring the worlds of Metal & Hip Hop together as did the Judgement Night soundtrack.

Nick says:

12:28pm | 06/08/09

This came in an email this morning in response to my article and I thought it was pretty compelling so I’ll post it here for the benefit of the discussion:

“Your analysis ignores things such as investment in new artists and recordings and the total income being generated by artists. Traditionally the major investors were those companies that made their $ from selling CDs and as a result of the trends, their investment level is way down (probably more than 50% this decade). This is not really being replaced…....so until there is an efficient mechanism to do this artist development and the health of the industry remains at risk.”

What do the artists think?

Dick says:

12:35pm | 06/08/09

Maldo is a music industry plant, ya’ll.

It’s blindlingly obvious that music itself has never been healthier.  The music industry, by contrast, is struggling - the overdue comeuppance for decades of artist exploitation and copyright-hoarding.

Under the old “get a record deal, sell CDs” model, the artists themselves (as a rule) made most of their money through touring.  That’s still the case, but the difference is that the music can now be distributed worldwide for free. Free worldwide distribution means the cap on consumption is pretty much gone - people who could only afford, say, a dozen CDs a year can now download 100 albums a year.

The more people that listen to music, and the more music that they listen to, the more concerts they’ll go to, band t-shirts they’ll buy, and friends they’ll tell about it. Unlike with cd sales, this is money that mostly goes to artists directly. Which cuts out the middle man (labels, who were only in it to leach the profit anyway), and leaves guys like Maldo jobless. 

As for vinyl sales, if they’ve grown 89% in a year to 1% of total units moved, that’s a huge feat - because at the start of the year they must have only been about 0.6% of the market. I expect we’ll continue to see big growth in vinyl, as the high quality, aesthetically pleasing analog alternative to digital music (and let’s face it, CDs are just an inconvenient way to store digital tracks).

http://dullsvillain.wordpress.com

Mr Pastry says:

01:48pm | 06/08/09

There needs to be a separation between the Music Industry and the Musical Entertainment Industry.  For example, Australian Pop Idol product is part of the musical entertainment industry, requires mass sales to cover high costs such as mass marketing campaigns to the young and easily impressionable.  These young listeners are now MP3 swappers threatening the Musical Entertainment Industry revenue.  Music Industry based product delivered on the web may now find it easier to get exposure and be able to compete with the entertainment industry. 
You never know we may be entering a golden age of quality music where the bland entertainment products start to struggle as young ears compare music with musical entertainment.

Nick says:

01:55pm | 06/08/09

On Neil’s point: “Interesting you never used touring and live music as a comparison Nick. Was that intentional?” 

It wasn’t intentional and it’s definitely worth adding the live and touring element into the discussion.

Bryan James Ptacek says:

02:21pm | 06/08/09

I have to strongly disagree with most of the statements that were in this article. I will say or agree that music is more POPULAR than it ever has been. All the ways that people listen that are listed in this article go back to decades except the gym and the computer. All units sold grew 10.5 % in 2008? According to who and compared to what year. Is single song sold on iTunes a unit? Is not about CD sales, its about all album sales and those are down. Vinyl sales mean nothing, unfortunately, they only account about 1% of all album sales and vinyl manufactures are not going to expand because they believe it is a trend and I agree. Youtube is sucessful, Last FM is keeping thier head above water, but Pandora, Myspace, Imeem, GrooveShark, they are all drowning because they can’t afford to pay the labels, and it is not the labels fault. Guitar Hero is interesting it is benefiting huge artist who are now on their own label and made their fame prior the year 2000. We are not progressing,  the rich get richer as the new brilliant artists decide to go to college and purse a business or whatever degree. Is it any wonder why music that has been made is past few years has really lowered the standard?

Clinto says:

04:08pm | 06/08/09

Nice article.  I’m sick of the record industry demonising bittorent and the like for falling CD sales.  CDs are now an outdated media.  Along with technology, my consumption habits have changed considerably over the years from buying 1 Cd a week 10 years ago to the point now where i cant remember the last CD i bought.  There are now significantly more competing options for my limited entertainment $$, movies DVDs (music and non-music) foxtel itunes.  Yes I may occasionally download something off bittorent, but usually it is just a hassle.  However, changing technology also means I get and listen to most of my music via internet radio and other podcasts.  Uploading a CD to my wireless music system is a hassle and something I generally dont bother with.  Weekly and fortnightly pod casts are freely available from various DJs, so I simply subscribe to them and keep up easily with the latest tracks.

Symon says:

04:22pm | 06/08/09

In response to Nick’s comment on support mechanisms for emerging and new artists:

As a musician in an unknown, unsigned Sydney hard rock band, you have to resign yourself to the fact that there is little to no support or investment from large corporations or influential individuals.

It’s hard enough to get a gig, let alone market the appearance adequately. This conversation rarely goes beyond free and largely ineffective social/new media.

We basically take whatever opportunity we can get to get our name out there (more on this below).

What is interesting however, is the support from those within our, and adjacent industries. Whether it be an amateur photographer, web developer, or someone-who-knows-a-guy-who-books-gigs-at-this-place-we-went-to-once.

So, like the consumption of music, the support has shifted to a complex and communal web of like-minded people. And it’s amazing the support you’ll get and the friends you’ll make through the blood, sweat and tattoos.

The real danger in the lack of support mechanisms from big business, representative bodies and Government is that the live music industry will suffer. Sure, people will continue to create music on their bedroom laptops, but this doesn’t translate to live performance.

I am aware that Minister Garrett announced at the last Federal Budget, a grant to music graduates who wish to start their careers/businesses. But my basic understanding is that, not being a graduate of a music/acting/performance institution, I am ineligible.

(I am happy to be corrected on this if it means a bit of cash is thrown my way!)

Where does that leave us? We are realistic and know that unless we are in the right place at the right time…

…Or if the right person of influence happens to read a blog on the matter…

We will continue at our desk and labour jobs for many years. Not saying this doesn’t afford us a lifestyle unto which we have become accustomed, but it doesn’t deliver the thrill of playing your compositions to a room full of lively people.

I am not claiming expertise in the matter, as I’m sure there are some avenues I have not pursued – but isn’t that the point? I am in the thick of it, and if I don’t know about it, then what good is it?

(At this juncture, I acknowledge and thank the work of organisations such as Triple J in supporting unsigned artists. You guys rock!)

There is only so much noise I can make with my 100-Watt Marshall stack!

NOTE: …And given my argument is based on the lack of formal support, and reliance on the kindness of strangers…

http://www.myspace.com/centredself
http://www.triplejunearthed.com/centredself

Nick says:

04:58pm | 06/08/09

Thanks for the perspective Symon.

alto says:

05:21pm | 06/08/09

Vinyl sales went up by a staggering 89%? So perhaps last year 100 units were sold and this year 189 units were sold. I’ll bet the champagne corks were popping at the major labels then.

Seems to me that the major stars of the past still do well out of touring even if their album sales might have fallen through the toilet. It must be harder than ever for new acts to crack it though. So Symon, it may be harder to add yet another hard rock band to the list of acts doing well in the market. It may be that new acts will need a whole new approach to make it big. Those managers that can crack the key to that will do well.

Dick says:

06:44pm | 06/08/09

Actually, Alto, American vinyl sales went from 990,000 in 07 to 1.88 million in 08 (not including second hand sales) - see the helpful link inserted by the author above. While this total is small compared to CDs, scoffing at such significant growth is kind of like scoffing at China’s 8% GDP growth in 2008 on the basis that China’s economy is still smaller than America’s. “Staggering” is just about the perfect word for it.

http://dullsvillain.wordpress.com

Pup says:

07:09pm | 06/08/09

The topic of music consumption is a tricky subject, especially for record labels and their attempts to display financially-tangible measurements to the finance guys on the floor above.

A large part of the flaw is that there are currently no finance-driven models of ‘new music’ consumption that approach anywhere near perfect. Take Youtube, for example. Record labels who partner with Youtube can make revenue from the number of streams generated by their material. The flipside: their content is then unable to be embedded outside of Youtube’s central website, which - in this age of blogging and social conversation - eliminates the central promotional channel for building an artist brand.

For record labels, there is also a lack of understanding on how to interprate these “new” measures of brand health. Traditionally, it was quite simple - you had physical sales as the key indicator, supported by promotional measures such as radio spins and publicity mentions. Obviously, the landscape has changed - now you have Myspace, Youtube, Spotify, Bebo, blogs, Twitter and countless other “measurements” to look at. Even if you have a social media specialist inhouse, who can can bring it all together, what does it actually mean?

Record companies tend to categorise their consumers on a sliding scale of brand engagement – from the artist “fanatics” (think Jess McGuire/Short Stack) through to the casual Austereo listener who will occasionally buy a track off iTunes or pick up an album for their children. Traditionally, the sale of a physical album generally suggested some level of commitment to a brand, from which, in turn, future business decisions could be based off (DVD releases, touring, album repackages, etc). But what of a Myspace stream? Is it a committed fan seeking out an artist Myspace as a source of greater interaction? Or is it a casual listener who, not willing to make a financial commitment to the product, simply seeks it out for free?

A site such as We Are Hunted is a significant step forward in terms of brand measurement, yet even it is something record labels are wary of – for obvious reasons, the methodology behind it is kept confidential. As such (and as is the case with so much of the current climate) labels suddenly find themselves competing on a playing field that they don’t fully understand.

Andrew McMillen says:

09:27pm | 06/08/09

“Music industry people know what needs to be done and how things need to change, but you can’t implement that kind of shift within a multi-billion dollar industry still overly reliant on CD sales.”

This point is central to the discussion. Digital distribution disrupted the business with which the record industry had become comfortable, yet ten years later, the CD sales metric is still the primary cause of dismay for all woe-is-us industry reporting. In the meantime, as Nick pointed out, consumers are constantly moving away from the format’s constraints in favour of convenience.

Those who embrace change lead; the stubborn and the inert flounder.

I saw an excellent example of the latter yesterday. A YouTube user uploaded the Modest Mouse video that Heath Ledger had been working on at his time of death. A ten-thousands strong community formed around the video overnight. I went to rewatch it again today and found that: “This video contains an audio track that has not been authorized by Sony Music Entertainment. The audio has been disabled.” (http://www.youtube.com/watch?v=Coay6kEqE80)

It’s easy to commentate on the kinds of decisions from which we’re geographically distant and emotionally divorced, such as the Sony example here. But with each decision that negatively affects a wide, vocal (via social media) audience of passionate music consumers, the gap between inertia and innovation widens.

D says:

03:00pm | 07/08/09

Hi I’m an indie muso, label.
5 years ago I assembled a working model for online mp3 retail, largely following advice that Phil Tripp & IMMEDIA! were blogging about at that time. I actually got it all set up before iTunes Aust & the majors came online - they were bogged down by red tape and legal issues…  Anyway, we’re still in the game… and I invite people like Symon to check us out if he is interested in no fuss online retail of his product.  I’m proud to say that I can offer a better deal to our artists than the majors :

http://www.quarterpiperecords.com