10/17/2009

Milestones: Music Industry Prosperity

[Our series of posts on albums, movies, etc that celebrate significant anniversaries this year continues. - KJ]

According to the RIAA (Recording Industry Association of America), sales of recorded music peaked in 1999. Furthermore, adjusting for inflation, current sales represent 50% of those a decade ago. What happened?

In a piece from this past summer, NY Times Op-Ed columnist Charles M. Blow suggests piracy, as well as free, legal streaming are a big part of the music industry's steep decline in revenues. But he reserves the big honor for the purchasing of individual song downloads and their subsequent decimation of album sales, quoting a study which found that of "13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs." Or less than one percent of the songs for sale.

The essence of his last point is arguable. Record stores are still around and people still purchase music. Obviously, neither are nearly as prevalent or numerous as they were in the late '90s but they still account for the majority of recorded music sales, not internet retailers. As for a decline in music biz coffers being directly linked to album sales tanking due to consumer preference of individual songs, here's a nice parallel:

If Mr. Blow were to revisit sales figures from 1999 he would probably find that more than 95% percent of albums released that or any year prior did not break even when all costs were calculated.
It was common knowledge at the time (RIAA source?) that all profitable albums--from blockbusters like Thriller to any record that barely "recouped" costs/expenses, and everything in between--represented less than 5% of all recorded output. (Some go as far as placing that figure at 3%.)

If this is true, then to place the bulk of the blame on a segment of the business that doesn't even represent anything close to 50% of overall revenue--with the exception of Atlantic Records which last year reported digital downloads represented 51% of revenue--is to give individual song downloads a power and responsibility in the marketplace it does not warrant. Yes, digital sales are rapidly growing but the current numbers Mr. Blow refers to simply reflect
a smaller pie overall.

Free access to music in general, whether legal or otherwise--along with a clueless, greedy music industry--is the main culprit for the demise of the record labels. Period. You can bet there are many out there in the music business who would like to turn back the clock and "party like it's 1999," huh?

1 comment:

Robert said...

Clear Channel should get a big portion of the blame as well.