
How iTunes crushed music sales - mshafrir
http://money.cnn.com/interactive/technology/itunes-music-decline/
======
mikestew
The source for the chart is the RIAA (lower left, tiny gray print)? The data
may be accurate, they may not, but I'll consider the source. The full article
sounds a lot like a puff piece for the poor, beleaguered RIAA. Singles are
killing the industry, except that singles drove a lot of the industry for
decades. This is briefly mentioned in the article, followed by "but the music
industry wised up in the '70s". And wise up they did. Slap a couple of singles
on an album, populate the remainder with filler, charge more, profit.

"...musicians will have to increasingly rely on touring, merchandise sales and
endorsement deals to make up for lost album sales." Yes, yes they will, just
like they've always done because of how RIAA members take the large part of
the profits from record sales. Again, the only ones for whom anything changes
are RIAA members.

I just don't see how a shift wouldn't have happened one way or another. Blame
iTunes all you want, but it's a hell of a lot better for profits than
torrenting. At 99 cents I won't even bother starting the bit torrent client.
At $15US for a CD that consists of the two songs I want, and the rest crap,
you can bet I'll look at alternatives. And I have disposable income and am not
afraid to spend it. You can forget about extracting money from the teenage
market at $15US a pop, which will just torrent it when faced with the choice.

There's a buggy whip analogy here somewhere, but I'm not going to try. It's
the way things are, and it's not going to change no matter how many members of
congress the RIAA tries to buy.

~~~
mynameishere
_but the music industry wised up in the '70s". And wise up they did. Slap a
couple of singles on an album, populate the remainder with filler, charge
more_

No, that was the model they used in the 50s and early 60s--singles were much
more expensive than today's 99 cents, and very profitable, and the albums were
intentionally designed to get a few more bucks out of a few hits. By the 70s,
the decent groups didn't really try to write singles--it was all album-
oriented music.

~~~
LaSombra
Progressive rock and conceptual albums would probably not exist if today's
iTunes model existed in the 60s and 70s.

I can't imagine a Thick as a Brick or The Wall in an iTunes pay-by-the-song
world.

~~~
guard-of-terra
I have a pet theory that progressive rock happened when there was a top number
of educated young people in USA and UK. People who this music targets. People
who actually bought music in numbers.

After that population started to age, and now music has to target your mom
(and also teenage girls and boys who "consume" music now), and chances your
mom doesn't want to dive into conceptual albums.

That kind of made music stupid.

------
jacobquick
If that were sales for your own company's product would you really come to the
conclusion that iTunes caused CD sales to drop? Seriously, imagine for a
moment it's your business on the line so you'd damn well better get the
analysis right: it looks like "my product's" sales dropped off at close to the
same rate before and after iTunes even existed.

How did iTunes kill music sales if the downward trend started before iTunes
was even available (which is plainly on that chart)? What would an honest
trendline from the CD sales peak to the trough say about iTunes' impact?

iTunes charges a dollar per song, about the same cost/song as Walmart used to
charge for a CD in Nebraska back when everyone got in trouble for price
gouging, and iTunes takes less of a % than Walmart ever did. If that chart is
even close to accurate, Steve Jobs is about 90% of the reason the music
industry still exists.

Every time I follow a link to CNN I get more convinced that they've given up,
and I'm starting to wonder why people bother linking back to these news
organizations at all.

------
makeramen
>> _When adjusted for inflation, revenue has been more than halved since Apple
launched the iTunes Music Store._

Whose revenue? RIAA? What about the artists revenue? It'd be interesting to
see that broken down.

Here's an interesting infographic showing how much artists make from various
sources: [http://www.informationisbeautiful.net/2010/how-much-do-
music...](http://www.informationisbeautiful.net/2010/how-much-do-music-
artists-earn-online/) iTunes is actually less profitable than retail, but only
if you're on a label that takes a lions share of what's left after Apple. It'd
be interesting to see what independent artists' revenues on iTunes are like.

~~~
unreal37
Also, they're talking "inflation adjusted revenue", not profit.

The music industry is as profitable as it ever was. They just don't need to
spend money creating CD's and shipping them all over the world. Direct to
consumer (or through a service like Apple) is the future.

And more artists won't need a record label at all. Like Macklemore.

~~~
simba-hiiipower
as much as i'd love that to be true, i just don't see it.

macklemore (and ryan lewis! - no love for the production, ever!) are the
exception, not the norm, and i don't think represent the beginning of larger
some trend..

i think the music industry is very analogous to startups in the tech space..
most fail, some make it alright, and some make it big. the difference between
them usually comes-down to the right combination of talent, luck, and external
support (from people who know the industry, have capital, and have been there
before). in the startup world vc fills the support gap, in the music one it’s
the labels..

 _as an aside: i genuinely do wish it were true though.. i could easily put
together a really good case study charting the composition of a growing
artist’s fanbase before and after signing to a major label. in the case of
hip-hop, i’ve encountered countless data points where sentiment among an
artist’s early fans takes a sharp nosedive down once signed and under the
pressure from labels; this usually tracks song quality very closely and is a
perfect inverse of trendlines for radio plays and itunes sales.._

------
onemorepassword
So you create a graph that maps all music distribution methods until, say,
1999, and then you ignore everything else that happened except iTunes, and
blame iTunes.

Sure.

Remove iTunes from the graph, and what you'll see is a big gaping hole where
the next generation music industry product should have been.

But more importantly, it shows that said next gen product should have already
been in place well before piracy even became a factor and iTunes was just
Steve Jobs' wet dream. If anything, it illustrates the utter failure of an
industry coasting on the unprecedented success of the CD when everyone else
could see that physical carriers were already on the way out.

The industry had the time, means and opportunity to shape the download
culture. Instead Napster and iTunes did. Not because technology moved so fast,
but because the industry stopped moving.

------
jdp23
The chart shows a steep decline in CD sales starting in 2000 -- several years
_before_ iTunes. So "iTunes crushed sales" like seems a real stretch.

A different way of looking at it is that there's a pattern of format changes:
vinyl to cassettes to CDs to digital. With the move to digital, unlike the
others, there was sigificant downward pressure on prices. So more music is
being consumed (on the units chart) at a cheaper prices. From a consumer
perspective, this looks like market economics doing what they should :)

~~~
mrtksn
they can say it's napster(read piracy)

------
roc
They're the ones who built their industry to revolve around hyper-promoted
singles.

All iTunes did, was let people easily and economically acquire only the tracks
they cared about.

That those people turned out to not be interested in the 'other 8 songs' or
the CD single b-sides is hardly iTunes fault.

If the industry promoted _albums_ and _bands_ , maybe they'd get different
results.

------
DannoHung
It's almost like... people don't like shitty garbage that fills most albums...

------
jdangu
Candid question: Volumes doubled and overall revenue got divided by 3 in 10
years. Is music 6 times cheaper than it was back then?

~~~
BenoitEssiambre
I think it is a lot cheaper, especially if you consider that you are not
forced to buy the tracks you don't want (which is the point of the article).

However, a lot of the cost reductions come from increased efficiency.

Apart from the fact that record companies don't have to produce and ship
physical goods, which is huge in itself, we also got rid of the need for
humans to search, pick and curate new artists. Artists or their managers can
now publish directly in the digital stores and a ranking algorithm is all that
is needed to decide if it becomes visible or not.

In the past, the human curators kind of ended up in a position of natural
monopoly where they would get to pick winners and pocket most of the profits
at the expense of artists who were forced to sign unfavorable contracts to get
visibility.

The fact that there is less money and lower 'sales numbers' in certain parts
of the industry might be a sign of success of its most innovative side, the
ability to provide more music at lower prices.

What would be interesting to see is the effect on artists in all of this. When
I buy music I would like to not be paying for a huge and inefficient,
production, distribution, curation and marketing layer. I want the money to go
as much as possible to the artist.

~~~
anigbrowl
_When I buy music I would like to not be paying for a huge and inefficient,
production, distribution, curation and marketing layer. I want the money to go
as much as possible to the artist._

Wait, who are you to pronounce on the efficiency of this layer? Do you think
that production and marketing don't create value? Several of the artists that
pioneered the 'pay what you want' approach have come to the conclusion that
they were better off with that stuff in place:

[http://www.theverge.com/2013/3/4/4054634/musics-pay-what-
you...](http://www.theverge.com/2013/3/4/4054634/musics-pay-what-you-want-
pioneers-sour-on-giving-away-songs)

------
jrs235
I would like to see a few different charts:

1\. Total number of distinct songs sold. and 2\. Total length of distinct
music tracks.

If we assume that a CD consists of ten 3 minute songs (30 minutes) we can see
how much effort the "artists" put in to recording their songs [that were sold,
due to being included on the CDs] to the revenue generated vs single tracks. I
wonder this because if artists could focus on playing gigs, finding the
popular songs and only spending effort and time recording those songs and
digitizing them for sale, then the revenue per hour of effort could result in
a drastically better "hourly rate" for recording.

(There's nothing like "doing work" just to do work and have it "thrown away".
Many developers know this feeling.)

EDIT: I hope you can see where I am trying to go. I want to compare distinct
songs sold to sales and aggregated distinct song length to sales. Perhaps
someone can elaborate and better communicate what I'm trying to say.

------
tpowell
I'd love to see arrows indicating dates when Napster, Kazaa, and Pirate Bay
all began to achieve strong adoption rates. My music purchasing behavioral
changes had nothing to do with iTunes..

I was a very happy Lala user until Apple killed it, and am now happy to pay
$10/month to Spotify.

------
Steko
Already clearly peaked and in decline 4 years before itunes launched,
presumably due to piracy.

------
jessriedel
So, most people agree that the point of music copyrights is to incentivize the
creation of music.[1] Has there been a steep decline in the amount of music
created since 2005 compared to the heyday of CDs, 1995-2005? Putting aside
arguments along the lines of "pop music these days is so much worse than pop
music when I was a teenager", is there any serious argument that music is of
lower quality?

If not, shouldn't this be an argument for a reduction in copyright strength?

[1] Occasionally people argue that copyright protects the artists _moral_
rights to the music, regardless of societal impact, but let's ignore that
minority opinion.

------
unreal37
This article is pretty funny when you look at all the subtle statements and
think about what they actually mean.

"The smaller, cheaper "45" record dominated music in the 1950s and '60s, but
the music industry wised up in the '70s."

This means, 45's were very popular and then the record industry purposely
killed them to sell consumers more expensive full albums just to get a copy of
the same song.

So the music industry were ripping people off, and the advent of
piracy/digital downloads means they can do longer do that.

Interesting biased article. Needs a proper translation though from RIAA-speak
to real English.

~~~
anigbrowl
Another way to read it is that labels put more capital and effort into
developing artists that could produce albums instead of chasing single-
oriented bands that tended to flame out quickly. The Beatles and the Rolling
Stones were trailblazers in this area because they were able to produce 8 or
10 good songs that people would pay money for in the form of an album.

I'm no fan of the RIAA, but amount of cognitive bias on this thread is
ridiculous. The record industry didn't kill singles at all, I bought plenty of
them growing up.

------
intrazoo
This chart could use some piracy (and online streaming) data as well, though I
am not sure what it would look like.

Also, make sure to sort by sales too.

------
Zimahl
I'd like to point out that this curve seems to follow the economy almost
perfectly with a climb until the late 90s, and then the economic slowdown of
the 00s into the 'Great Recession'.

So, as we always say 'correlation doesn't mean causation'. iTunes probably
isn't the cause, the severe decline in disposable income was the most likely
factor.

------
JohnBooty
The article is fairly insane. The "sales" chart (the chart defaults to
"units") clearly shows sales peaking several years before iTunes was released,
and the decline continues (but slows slightly) after iTunes was released.

How does one look at that and conclude that iTunes "crushed music sales?"

------
tnuc
Only iTunes? Might be missing a few other changes in revenue.

What percentage of a CD sale went to the artist?

It's not really about a change in format but a change in a distribution model.
Anything that reduces the amount of middle men is good for the consumer and
the artist.

------
vy8vWJlco
(As I've said before...) To paraphrase Jack Valenti: the future is to the past
as the Boston strangler is to the woman home alone, with the windows open,
listening to her favorite DRM-free digital audio files. Don't blame iTunes for
successfully serving the market.

------
MarkMc
Why did the music industry allow iTunes to sell singles instead of entire
albums? If illegal torrents forced them to do it, wouldn't a better title be,
"How Illegal Downloads Crushed Music Sales"?

------
caycep
well...it IS a chart by Time Warner...that comes directly from RIAA

------
guard-of-terra
Why do musicians keep churning out albums where listeners don't care about
most of tracks? Even when that clearly doesn't work?

That's stupid. Most music I care about comes in albums where most of tracks
fit my tastes and touch my soul.

I wonder how the album:single chart will look like if we subtract "whatever
plays on radio" from it.

------
adventured
Leaving out live events, streaming, satellite, etc makes this a joke of a
chart.

Spending has shifted, and how people enjoy music has shifted.

It'd be like claiming the VHS killed the drive-in movie business. That'd be
wildly confusing what was actually going on in the market at the time by
ignoring a lot of other data points.

Tell Madonna her album sales have been decimated. Oh wait, she's busy making
tens of millions per tour with $150 tickets. This chart pretends none of that
spending is occurring. People have a finite budget for music, as with
anything.

~~~
simba-hiiipower
i don't think that's really comparable, and especially so given the unique
structure (some may say _fuckedupedness_ ) of the music industry..

you may be right in that growth in other revenue streams (touring, merch,
royalties, ...) potentially offset, or maybe even exceed, the decline in media
sales when looking at the space in aggregate. however, that shift has major
implications for different players in the space, and that shouldn't be
ignored.

things may be working out better for superstars like madonna (and that’s not
necessarily true; i really don’t know) given their ability to draw massive
crowds willing to pay-up for the experience; smaller artists however lose out,
as do the record companies..

historically, record companies took the lion share of media sales and artists
(frankly speaking) got fucked. while the model has evolved, slowly, that’s
still largely the same today, though things have now flipped - where the media
sales, that the record companies depend on, have collapsed, and the other
streams artists mainly depend on have taken-off.. love em or hate em (likely
the latter), record companies do provide real value and remain an essential
player in the space, helping discover and get good music out and supporting
pre-madonna-level artists early-on, and their losses shouldn't be viewed as a
win for the little guy, as it most certainty not.

i'd say this long-standing disconnect in the industry is why it’s taken nearly
two decades to adjust to a disruption (digital formats, internet, file
sharing) in the market; a ridiculously long amount of time if you think about
it..

~~~
guard-of-terra
Smaller artists have it better than ever: there is a new generation of
distributors like cdbaby, magnatune and the orchard. They carry a magnitude
more different releases than majors/record shops ever could. If you play
something, you can now reach all the audience in the world.

But of course listeners become very thin. With such enormous choice, every
single artist isn't going to have more than several thousand fans on average.
But it's just numbers at work.

I think that aggregators are going to surpass majors and then we'll live in a
new and interesting world. I think this is coming to Europe first.

------
theltrj
i guess in 2013 iTunes overtook piracy in crushing the music industry because
I see one of those articles every year, what exactly isn't crushing the music
industry?

------
danso
Interesting how sales revenue is reportedly down so much that vinyl, which is
a fraction of a percent by 2000, grows to a visible percentage point or so by
today. Cassettes, alas, never had a revival

~~~
anigbrowl
Good point. Vinyl has seen a slight resurgence in popularity because it's hip,
but the long-term decline is easily understood when you consider that pressing
plants continue to close down.

[http://www.attackmagazine.com/features/the-truth-about-
recor...](http://www.attackmagazine.com/features/the-truth-about-record-store-
day/)

I don't know why you'd want to bring back cassettes - total pain in the ass. I
still like them for recording because analog tape distorts in a pleasing
fashion. But for listening, nope.

