Digital Music Sales Fall For the First Time

Check it out: http://www.engadget.com/2014/01/04/first-digital-music-sales-drop/

I think the point of the article is that music sales in general are falling, it just also happened to hit the iTunes market for the first time.

This is the first of what will probably be a continuing trend as streaming from places like Spotify, Mog & Rdio start to replace the need for people to purchase tracks and download them to devices. It's not just physical media that's going away, the general public just doesn't seem that interested in buying music any longer. Should I buy 10 songs from iTunes or should I take that same amount of money and buy a month subscription to Spotify which gives me access to millions of songs? It's pretty obvious which one is the smarter buy to the consumer.

While I'm happy to see that vinyl jumped 33% again this year it still only counts for a little over 6 million units sold or roughly 2% of all music sales. It's a niche market that will remain a niche market, but the 1% of us that are audiophiles are glad it's a healthy niche.

Here's an article from the UK about how streaming is changing the marketplace there for both music and movies/tv shows.

http://www.theguardian.com/media/2014/jan/01/uk-entertainment-spending-film-music-streaming

Sales are only down because more people are stealing digital downloads.

I never understood buying downloads anyway. It's not the same as having a physical copy. Maybe if it's not available otherwise, but even then, I think I can just live without it. Or if you don't care for the moral issues in stealing, download illegally.

And streaming is just a substitute for radio. You hear the songs, but you don't get your own copy. Good idea for those who like it. Not for me.

Quote :

I never understood buying downloads anyway

Being that I like digital downloads I figured Id take a stab at it. For me its better to spend 99 cents to 1.29 on itunes to buy a song I like than spend 15-20 bucks on an album for one maybe two songs. Dont get me wrong I like owning a physical copy but I dont have a hard on for it either. If i wanted a hard copy I burn it on a cd simple as that. I rarely use a CD player anymore and I dont own a USB turntable so Vinyl is out for me too. I mainly use my phone or my computer when listening to music or audio books or whatever, so in that aspect this is the easiest way for me. Though like I said i like CDs I have about 800 of them but given my finances I havent bought a CD since last summer. In the end though different strokes for different folks

That is good news for sure. Yes, there are folks out there who really appreciate music. I hope the industry will take notice of this. The idea of purchased downloads and streaming are good. They are not replacements, just another way to enjoy music. Illegal music has been around for a long time and nothing new. I'd venture to guess that most folks are guilty of pirated music at some point or another, but the vast majority of them still purchased music. I've always held that those who only engage in pirated music, wouldn't buy the music if they had to and would move on to something else. I think it was a big mistake for the industry to come out publicly and attack file share sites. Quietly and legally shutting down the offenders would have been a far better approach and at the same time offered suitable replacements at a reasonable fee. A lot of folks I've talked to didn't see the harm in downloading a few songs they liked and could never find in the stores. Apple stepped up and made a windfall by providing people the opportunity to get those songs. Did the music industry step up, no, they just complained and dragged their feet. The many companies that have tried to do the music download thing have realized, just how hard it is. Streaming has followed the same hard task of getting industry buy in. The simple truth is, music is something almost everyone enjoys and making it easy for people to enjoy it will always be a hit. CD's are old technology, just like CRT TV's. Good even great at the time, but now they are not. Sadly, music hasn't had quite the success as the film industry in providing quality. I had a minidisc and dat player and thought they were great at the time and yet quickly found out I wasted money. A lot of folks bought those things, only to find out they weren't all that great. Hell, I think I've been though every generation iPod. I have always been willing to buy both the device and the media if it will give me an outstanding musical experience. I do the same with movies. I just bought my first 4k TV and superBD player. A lot of the movies aren't there yet, but I'm ready. My point is, people aren't afraid to try/buy new things for a better experience.

mikeinfla wrote:

Sales are only down because more people are stealing digital downloads.

I always question this seemingly long held belief that music sales (Cds or pure digital downloads) have taken a nosedive only because of this. I've always just assumed that people who download any music they can get their hands on for their enjoyment from the good ole interwebs in many cases wouldn't have spent a dime on a CD or digital download in the first place even if the ease of getting it for free didn't exist. Not to say that it's had no bearing on the drop in sales just possibly not the sole reason. At least from my personal experience many of the people that I encounter who do this regularly don't seem to really value music and the artists who make in the same way that I or others on this board do so why would they pay for it even if the free option didn't exist.

Illegal downloading has NEVER been the sole reason for the decline in music sales, it is of course one of the reasons but it's not the only culprit.

The labels are turning their attention toward streaming now because that's a segment that's seriously on the increase

Spotify just removed all their restrictions around streaming on the free tier, if you don't mind listening to occasional advertisements you can choose from millions of songs to listen to, or entire albums or entire discographies if you want. People keep saying that it's a replacement for radio but does radio let YOU choose every song you're going to listen to?

Rdio just opened up their service to unlimited free streaming as well…and the newly launched Beats Radio also offers unlimited streaming. My guess is that Mog won't be far behind jumping on that bandwagon.

If you are a young person (under 30) and do most of your music listening on your portable device or computer then why bother buying anything…hell, why waste time even downloading something illegally? Streaming is so much easier and that's really all the market cares about now, portability and ease of use.

And with everybody's disposable income decreasing year after year FREE is a very good price.

S.D. wrote:

Illegal downloading has NEVER been the sole reason for the decline in music sales, it is of course one of the reasons but it's not the only culprit.  

The labels are turning their attention toward streaming now because that's a segment that's seriously on the increase  

Spotify just removed all their restrictions around streaming on the free tier, if you don't mind listening to occasional advertisements you can choose from millions of songs to listen to, or entire albums or entire discographies if you want.  People keep saying that it's a replacement for radio but does radio let YOU choose every song you're going to listen to?

Rdio just opened up their service to unlimited free streaming as well…and the newly launched Beats Radio also offers unlimited streaming.  My guess is that Mog won't be far behind jumping on that bandwagon.  

If you are a young person (under 30) and do most of your music listening on your portable device or computer then why bother buying anything…hell, why waste time even downloading something illegally?  Streaming is so much easier and that's really all the market cares about now, portability and ease of use.  

And with everybody's disposable income decreasing year after year FREE is a very good price.
 

According to an article that i read recently, the only problem with this model is that it is proving impossible for anybody to make a profit and most of the streaming companies are downsizing their workforce. Sooner or later (like when they have figured out how to stop the illegal stuff) the free streaming will disappear and people will have to pay through the nose. Either that or big business will give up a pull out of the industry altogether.

Mainstream people in the 80's didn't care about music any more than people nowadays. They listened to whatever crap Milli Vanilli or Culture Club, only back then they had to buy it to listen to it. If they had a chance to get it for free, they'd have done it just the same as people nowadays.

It's like potatoes. You don't think of them. It's just something that's "whatever, let's buy some", and if you can get them for free of course you will do so.

The problem with illegal downloading is that it mostly hurts smaller bands. The big buck pop acts are the ones that bring in the money to the record labels, and enable them to sign and support smaller, more marginal bands. If Milli Vanilli sells 10 million albums, the label takes a good chunk of the profits and then invests some of it to help support the next "discovery", possibly a marginal music act. They get free studio, engineers, merchandise, promotion, tours etc. With illegal downloading, the small bands are the ones to get kicked out first. The big acts are the ones that will stay. Even if they only bring in just enough cash to outset their own costs.

I missed the part when the major record labels invested in marginal acts. Most of the bands I listened to had to prove that they could make a buck for the label first. Metallica, Anthrax and Raven got noticed because they had built up a large enough following to sell 3000 tickets for a NYC show, not because someone at the label though that the music was great.

It's the indies that are really hurting from this downloading and streaming stuff, they were always (at least since the early 80's) the ones willing to take a risk on something new, not the majors. I also think that it's misleading to suggest that bands get free anything from the labels. It all gets added up and taken out of the bands money, some bands get into horrendous debt to the label. The weird thing is that it's the huge companies that haven't really suffered through downloading as people are spending roughly the same amount of their income on entertainment (and these guys have a least one finger in every pie) as they ever have, just not so much on CD's.

I think that it has become really hard for bands to make ends meet these days (Purson had to cancel half of their European tour because the van broke down in Belgium and the cost of getting it fixed meant that they couldn't afford petrol, food etc..) Hopefully a solution can be found so that smaller bands get paid for their efforts, and that solution won't be free streaming.

Boris2008 wrote:

I think that it has become really hard for bands to make ends meet these days (Purson had to cancel half of their European tour because the van broke down in Belgium and the cost of getting it fixed meant that they couldn't afford petrol, food etc..) Hopefully a solution can be found so that smaller bands get paid for their efforts, and that solution won't be free streaming.

All the people I know in smaller bands around here only make any money at all these days by doing pretty much all of it themselves, (recording, marketing, booking, etc...). Sure you may hire someone to do a few things you may not have the expertise for but by and large you do it yourself.

The future is hardly rosy for streaming: http://www.theguardian.com/technology/2013/aug/01/spotify-pandora-streaming-music-profits

Hopefully they will get their profit model figured out before the whole thing collapses.

Witchfinder wrote:

The future is hardly rosy for streaming: http://www.theguardian.com/technology/2013/aug/01/spotify-pandora-streaming-music-profits

Hopefully they will get their profit model figured out before the whole thing collapses.  

One of the primary reasons there is minimal revenue coming from streaming is because the record labels charge HUGE fees to license all that content, making millions of tracks available for people to play online is EXPENSIVE. Don't be fooled, the record labels are still getting paid.

I learned years ago that even iTunes barely makes any money from selling tracks in the store. The record labels take such a large cut that Apple essentially breaks even, however the iTunes store was created for the sole purpose of selling iPods, so Apple operates the store for very little profit because they make huge profit off selling the hardware.

Streaming isn't going to solve the problems of the music industry, physical media isn't either, it's a big question mark as to how it's going to survive as a money-making business. The general public doesn't care about owning music anymore, they are either happy to rent it, or access it for free. So at some point we'll need to figure out how to actually pay the artists to create new music because as the system stands now nobody is making a dime…

…except for the labels.

quote wrote:

They get free studio, engineers, merchandise, promotion, tours etc.

You don't get shit "free" from a major label...you owe it all back to them.

Because they take the financial risk.

S.D. wrote:

The general public doesn't care about owning music anymore, they are either happy to rent it, or access it for free.  

General public would still buy music, if it just wasn't available for free online. A whole generation has grown up thinking you don't have to pay for music.

I think people still care about music. Maybe even more than before. So if free downloads weren't easily available, as they shouldn't be (we still agree owners of intellectual property should decide how their product is sold?). Or if they want, they can give out some tracks free of charge, or even whole albums, which makes sense for new unsigned acts. The internet could be a great way to promote and make money. But instead it's a great way to get your music free of charge.

Lari wrote:

Because they take the financial risk.

Exactly...but my point was saying bands get "free" anything from labels is just wrong.

Lari wrote:

General public would still buy music, if it just wasn't available for free online. A whole generation has grown up thinking you don't have to pay for music.

That horse escaped the barn well over a decade ago, there is no getting it back in. At this point you just have to move forward, there is no going back to what once was.