

Music Sales - onreact-com
http://www.nytimes.com/imagepages/2009/08/01/opinion/01blow.ready.html

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thedark
What are the sources of this numbers? What digital distributers are counted?
Are they all? Are these the numbers from only sources directly represented by
the RIAA? Does this count non-label record sales? Does this count revenue from
sales of records like Radiohead's "In Rainbows" release? There is more that
can be asked.

I am not sure what I can conclude or deduce from this graph; when there is a
small nagging glare of "Source: Recording Industry Association of America"
down at the bottom, tracking my gaze.

~~~
adrianwaj
There's a box around download album sales reading $0.60 - what's that? 60c
albums only? A lot of the value for units shipped comprises of the cost of the
physical value of the media and its transportation. Is the comparison
legitimate if it compares the value of CDs shipped VS download sales?

Too bad the gravy train has ended for the RIAA - recouping losses by suing
file-sharers is like a kid throwing a violent tantrum when their toy broke.

~~~
pyre
> _There's a box around download album sales reading $0.60 - what's that?_

I think that's in millions (or billions) of dollars. Notice that there is also
'1978: $8.1' next to LP/EP and '1988: $6.1' next to Cassette. I think they are
trying to label the peak of sales (those black bordered sections) with the
volume of revenue.

{edit} It says 'billions' at the top {/edit}

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adrianwaj
ok, well iTunes sales were $3.34 Billion in 2008. That's over double the
combined RIAA figure of album and singles sales. <http://tr.im/yZ7K> I
remember reading that Apple doesn't take a large cut of that amount if that
even mattered here, so sounds like these figures are wrong, especially when
other online music retailers are taken into account.

~~~
stepherm
I think they probably consider buying a single track from an album and buying
a 'digital single' (a small release with 1 or more tracks) two different
things.

I doubt the former case is considered a 'single' in the traditional sense of
the word in the music industry.

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nuweborder
Unfortunately, no doubt these numbers do not count non-label/unsigned record
sales as "thedark" mentioned. This is due to the fact that according to major
labels and the FCC, these numbers don't count, simply because they don't
receive a cut of those sales.

Once we develop a legitimate platform for unsigned musicians to use and
compete with the major labels, their artists, and the money they make. Then we
will begin to see some numbers that include unsigned artists. Because once
they begin to make competitive noise, the labels and FCC will certainly try to
begin to get involved and want to regulate as they always do. But as long as
the independent artist stays technically "unsigned", there's nothing the
regulators can do to control the music, or get a piece of the earnings.

Once we see this happen, those downloaded album and singles sales numbers rise
dramatically. Force the RIAA to count you. Record and be heard.

~~~
Gibbon
There is no "dark" market worth mentioning in this context. There are simply
no significant sales beyond the major labels and their subsidiaries. The four
major labels account for more than 80% of ALL music sold in the USA and the
1600 members of the RIAA account for more than 90%.

The topmost performers in the indie market may achieve some success on their
own, as individuals, but in aggregate the total indie market is a disaster.

~~~
nuweborder
"thedark", is the username of the previous poster. Not an actual reference to
anything regarding this post itself. Looks like you got the wrong message.

The reason for low sales outside major labels, is the fact that there are no
outlets for unsigned musicians that are worthwhile, and major labels regulate
what you hear, and who is heavily promoted. And therefore, the competiton is
not level. Unsigned musicians cannot afford expensive studio time to record,
have little avenues to promote and sell, and therefore just cant compete. The
indie market is a "disaster" as you put it, because major labels, the RIAA and
FCC keep it that way on purpose. Who wants an area of business to succeed and
compete, if they cannot get a piece of that revenue? No one.

Now how about Digg has done for news, and YouTube has done for music? Leveled
the playing field, and taken some of the wind out of the sails of major media.
And put more power in the hands of the consumer, and allow then to choose
whats best in music. Not tell them what you want them to listen to.

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cschneid
I always really like the NYTimes graphics. They do a good job displaying info,
and (not applicable to this one) their flash graphs are always more helpful
than annoying.

~~~
n8agrin
NYT does a great job of pushing the limits in infovis, but they don't always
hit the mark. This vis seems to show an approximate fixed scale on the y-axis,
which is good. It means the differences in heights between the blobs are
relevant. The fact that they layout multiple charts along the y-axis seems
acceptable, in fact it allows for quick comparison between graphs. However,
the x-axis is unlabeled and unclear. It seems to roughly represent time, but
has no origin. One can sort of deduce approximate time but without a clear
label I can't dive deeper into the information. This seems to be the failing
of many info visualizations I come across these days. They either optimize for
the "quick glace" or the "in-depth analysis" when you can get a happy medium
by usually just tweaking one or two aspects of the display (in this case I
would argue a labeled x-axis).

~~~
tedunangst
"Value of units shipped from 1973 to 2008"

~~~
n8agrin
I read the text. My point is there is no visual aid to help you come to
definitive conclusions like "Between 1999 and 2002 we see an exponential
decline in cd sales." You can guess but that's about it.

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dustmop
Looks to me like CD sales were a bubble, and there's no reason to expect the
music industry's success to continue as it has for the prior decade.

~~~
Goladus
It's not a bubble, the product just became obsolete with newer technology and
demand for industry slacked with internet marketing. CDs were (and still are
to some extent) a fantastic media for storing music, but mp3 has huge
advantages.

The late 90s was also the end of the pre-internet era, where the dominant way
to market music was radio, TV, and print. In 1995 you had to try hard to
discover music outside the mainstream. In 2005 you could go to MySpace and
listen to an hour of music without ever hearing a top 40 song.

~~~
hernan7
Well, there was a period when CD's were the cool new thing and everybody was
buying all their record collection on CD again.

So, not only the labels were selling music by new artists at their usual pre-
Internet levels, but there was also a big demand for old music in CD format. I
suspect many older people that would not usually buy new music ended up buying
many of their old albums again.

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dinkumator
What does 'value of units shipped' mean?? I'd beg the question that all they
put out now is crap anyway, so I'd agree that the value is nothing compared to
the old days.

I don't think I like that it's in billions of current dollars, seems a little
misleading since they didn't actually have $8.1 billion in LP/EP sales in
1978.

Finally, the difference between CD and other digital media versus LPs and
cassettes is that they don't wear out. You only have to buy it once, and if a
bunch of your friends borrow it its not a big hassle.

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3pt14159
Gross sales is irrelevant. A download costs virtually nothing. No CD to make,
no shipping, no store front, not cover printing. The RIAA is misleading people
with these types of numbers, no doubt they have lost money, but really, it
isn't as bad as they pretend.

~~~
Gibbon
Total manufacturing/distribution costs for a CD are around $2.20 with a
wholesale price of $6.50.

The labels still get the $6.50 more or less for a digital album (although
that's falling) but they no longer have to worry about manufacturing a portion
of their products (CDs are still 80% of the market.. digital is 20%) so at
best they knocked off 20% of their manufacturing costs thus far.

So now for an equal numbers of units shipped the total cost is $1.76 per unit.

The labels also have to pay mechanical royalties to the artists.

So prior to the internet: $6.50 x 250,000 units minus royalties would net them
around $700,000 gross profit.

But they would have paid $250,000 as an advance to the artists.

Net profit would be something like $450,000 on the initial $250,000 investment
plus ongoing manufacturing and marketing costs.

If they hit it big, they get rich, but a dud might be a money loser or at best
barely profitable.

The digital sales would boost their net profit by $110,000 for the same number
of units sold, all else being equal. They would get a 2.24x return on their
investment.

Keep in mind 250,000 units is now pretty good for a successful artist now..
the biggest album last year only sold 2.8 million copies.

Artists don't get the shaft anymore than any other business person does.

Labels are just VC.. they risk investing a small amount of money in a very
large number of artists (a few hundred thousand) on a hunch that it might pay
off. Most don't work out, but the ones that do make up for the rest.

80% of sales come from 50,000 albums pulled from the entire history of
recorded music.. not very good odds.

The real problem is that nobody is buying music anymore. Period. Unit sales
are dropping off a cliff.

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RyanMcGreal
I'd be more interested to see a graph of _net_ revenue (minus costs) over time
by format. Straight revenue for online music might be smaller, but their media
and distribution costs are much smaller as well.

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antidaily
So, CDs are still outselling downloadable content by as much as 3-5x?

~~~
Gibbon
CD sales accounted for 80% of the 428 million units sold in 2008 (from all
media).

In comparison there were just under a billion units sold in 1999 and the
backstreet boys had the biggest album with over 16 million copies. Last year
the top seller, Lil Wayne only sold 2.8 million. It took the b-boys just over
a week for comparable sales at the peak of the market.

If I'm not mistaken, Norah Jones first album was the last to break the 10
million barrier.

Total units sold started dropping at an annual compounded rate of 6%/year in
1999 through 2004. With the introduction of iTunes in 2003, "album
substitution" started to take hold and the decline accelerated. Albums were
being replaced by single track downloads on iTunes at a rate of roughly _1.4
downloaded tracks_ per CD album. With an average of 12 tracks per cd.. that's
an 88% drop in per unit sales (1.4 tracks are around $1 on iTunes vs. $16-$20
for the CD album).

The music industry is alive and well but the record industry has basically
been obliterated.

~~~
ilyak
I don't understand why would people en masse download only one song from
album. The rest have to be a real crap.

I can sometimes listen to a single song without looking at the rest, but that
account for something like 5% of my listen, the staple being albums, of
course.

~~~
etravers
It is a direct result of pushing out pop crap to sell singles. The majority of
the artists the industry markets are pop artists that want a hit single. That
is what they push for that is what they get. If they would get behind real
artists and market them and their work album sales would increase.

Look at the top charts for singles. Pick any artist in the top 10. Go
somewhere you can preview the entire album and then ask yourself if you would
buy it.

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daniel-cussen
This is skewed by bad inflation statistics.

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ilyak
I never knew that singles sold so tiny. I don't understand why did anyone
bother with them at all.

~~~
jrwoodruff
Singles were pressed for radio stations, back in the day. May as well sell 'em
if you're already pressing them.

Sidenote: this is where the term 'B-side' came from. The A-side of the single
had the song the music label wanted to promote, the B-side had some other song
that most stations didn't play.

~~~
ilyak
Oh! An interesting consideration! I didn't realize song couldn't get on air
unless it was pressed!

