Peter Kafka

Recent Posts by Peter Kafka

Big Music's Big Decline, in Chart Form (Again)

You’ve seen multiple charts that detail the music industry’s decline. Here’s yet another one, from the music industry itself:

The key thing to look at here isn’t the decline of physical sales (the yellow bars), which have been plummeting since the Napster era, but the petering out of digital sales (the grey bars), which were supposed to bail out the business.

The International Federation of the Phonographic Industry, which produced the chart above (via PaidContent), says that digital sales grew a mere 5.1 percent last year and that in the U.S., growth was nearly flat at 1.2 percent.

Again, not a surprise–the labels and other groups were reporting slowing sales throughout last year. But it’s always bracing to see it in graphic form.

The IFPI chart also shows why the labels are both pining for new digital players to show up and wary about what happens if they’re truly successful.

Because if, say, Spotify does shows up in the U.S. and becomes very popular, then CD sales–which still make up the majority of the industry’s sales–could plummet even faster.

It’s also one of the reasons that the industry is interested in the “locker” concepts that both Google and Apple (and, reportedly, Amazon) are talking about: Those models give consumers more access to the music they purchase from the labels. Which is nice. But they’re still premised on consumers buying music from the labels, a track at a time.

I’m not sure how that pushes the digital sales curve up again. But at this rate, maybe just keeping it flat would be a victory.

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google