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

March 28, 2011 at 2:15 pm PT

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.

Tagged with: Apple, cloud, digital, entertainment, Google, IFPI, Internet, locker, MediaMemo, music, paidContent, Peter Kafka, Spotify

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Anonymous

That’s an interesting chart. Looking at it, I suspect that the overall recorded music industry will simply shrink, with any new digital-centric music industry being much small in real terms (adjusted for inflation)* than the old music industry.

* Speaking of which, are the figures in the table adjusted for inflation?
http://www.facebook.com/profile.php?id=692271649 Luis Eduardo Gutierrez

I hate to say it, this is what happens when CDs aren’t all that good and people just feel like its not worth buying them.
Anonymous

Maybe someone could suggest the obvious: the music industry needs some talent – instead of regurgitating the auto-tuned, repackaged drivel that’s coming off the line for the past 10 years. Maybe take a look at the indie band acts around these days, and offering them an actual cut of the action.
Anonymous

Big labels keep investing in awful music and people are surprised sales are slumping?
http://twitter.com/Brainwerx Brain Werx

The one thing it does not track, and I suspect is making more of an impact: self-published music. Why, if you have access to the technology, as an artist/band, would you go with a label, that will take more of your money? Self publish for less, and keep more of it. Youtube is a great example!
http://www.facebook.com/profile.php?id=653205607 Ed McCloskey

Ok, when will people realise that the reason music in the format of paid Media, be it physical (Cd’s etc) or Digital is dying is 2 main reason, the weakest of the 2, which has accelerated due to the 1st and main reason, is that from the high of sales in 98-99 is that here are still only 24 hours in a day, but people have more variables as 2 what to do in their spare time. It use to be the main entertainment was Music/Cinema, with MTV on in the background, but now we have way more things to occupy our time, Facebook, You Tube, fannying about on the internet. Remeber when MTV use to like eh show Music Videos,?

But the main reason and it would be good to overly this on the above the chart is the music took the credit card debt approach and invested in non sustainable acts, the X factors so to speak, rather than investeing long term in sustainable new talent (as in bands/musicians that wrote and played their own songs/instruments), case in point can you name all the X factor/britains got talent winners over the laxt X years. Possibly the low point of all this was Paris Hilton getting an Album deal, the money that this took could have got 3 new talented artistes/bands proper exposure.

So with the main reason opening the weaker reason gained traction as people looked for other more creative interesting thing to do with their limited time. Plus the ability to carry your whole record collection about with you and listen to it (as their was little in the market to better it) also had an infringment in this.

So who is to blame, the Record companies themselves, If you though giving PAris Hilton the time, effort and resources of your industry would reverse the decline, you sadly for all the unknown talent out their that sadly could not be discovered by the wider audience, you deserve everything that has happened to you.
Anonymous

The argument is frequently made that the decline in sales of recorded music is due to a commensurate decline in the quality of the artists being recorded. This is cute, pat… and most probably wrong.

The decline in recorded music isn’t the anomaly; the huge boom in recorded music sales in the CD era is. I saw a chart once – but sadly have been unable to find it since – that showed how much the recording industry’s revenues and units exploded in the CD era. With consumers viewing CDs as archival quality (they’re not, but they last longer than your average cassette did), plenty of music was repurchased on CD, further driving revenues up. Couple that with the transition from the album CD as the dominant format to the digital single download, the decline in units moved is inevitable.

Statistics provided by the recording industry will always highlight the decline since the peak of the CD craze. They will never show the INCREASE from vinyl LPs and cassettes to CDs, as that undermines their argument by suggesting that, in actuality, recorded music sales are simply normalizing after a “CD bubble.”

Besides, the recording industry is increasingly superfluous. With the falling prices of audio equipment and software and power of home computers, plus the distribution possibilities presented by the internet, fewer and fewer true artists have any need for the recording industry. Business models that eschew the traditional majors entirely are extremely viable these days.

The recording industry isn’t dead, it’s just been relegated to lesser importance.
Anonymous

The labels do a lot of promotional work for their bands. Try getting your song played frequently on the radio without them, for example.

Some bands do manage to draw attention and a major audience through self-promotion, but it’s really difficult considering how many people out there are doing the exact same thing.
Anonymous

The recording industry isn’t dead, it’s just been relegated to lesser importance.

Exactly. The recording industry is an artifact from an era when it cost a ton of money to record and distribute music, and the sale of recordings allowed them to generate large amounts of revenue to cover those costs and then some. If that’s no longer the case, then by definition the Recording Industry is a “middle man” that is no longer necessary, and can be actively harmful and parasitic.

That tends to be a problem when examining the recording industry’s position on this stuff. Like you said, it’s all from a framework of “Will this new digital stuff allow us to keep revenues like what they used to be in the near past?” I think the clear answer is “no”.

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

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