Saturday, June 5, 2010

Billboard reports album sales down
Why longevity in the music field is done
Musicians earn 5 cents per download

Billboard reports: Bad times just got worse. During the week ended May 30 (2010), the U.S. music industry sold a total of five million albums.


That figure, which includes new and catalog releases, represents the fewest albums sold in one week since Soundscan began compiling this data in 1994.


By comparison, the highest one-week tally recorded during the Soundscan era is 45 million albums, in late December 2000.


Yet two years ago, like Marketing Sociologist, Digital Media Wire saw where music was going, Sales of digital music downloads will grow at a compound annual growth rate of 23% over the next five years, reaching $4.8 billion in revenue by 2012


Jan. 1, 2009, I reported for the first time in history, one billion downloads had been sold in a year. April 24 this year I reported iTunes had sold a cumulative 10 billion downloads. Who’s right, Marketing Sociologist and Digital Media Wire, or are music sales down as Billboard reports?


You need to look at Billboard’s perspective and investment. While reporting for them, I remember my wonderful editor, Eliot Tiegle, would call, It snowed in Denver last night. Yes was my reply. How did that impact record sales?


Also, The bridge washed out in Tempe. Yes. How did that impact record sales?


Billboard further reports, According to the RIAA, album shipments in 1973 totaled 388 million units, an average of 7.5 million per week.


Let’s do the math here, something Billboard isn’t doing. A CD today sells for roughly $15, compared to $6 in 1973. So that five million last week equated to $75-million. Those 7.5 million albums sold per week in 1973 equated to $45-million. Now let’s roughly adjust for inflation. A gallon of gas in 1973, around 28 cents, today $3.


Wow, using my method of adjusting for inflation, which any qualified economist will scoff at, that is $540-million per week for records in today’s gasoline equivalency. Compared to the $75-million albums raked in last week, Billboard has a valid point.


I’ve joke that I’m so old my children physically bought CDs while in high school. Last night I downloaded the entire new Miranda Cosgrove CD for $10. Did not get a physical copy. No taxes involved, no shipping.


Ke$ha stormed the charts at the beginning of 2010 with Tik Tok. Will she be a one hit wonder? Don’t know.


But I do know a year ago, you never heard of Ke$ha, Justin Bieber or most of the top acts on Billboard’s Hot 100 or Radio Disney’s Top 30.


Building longevity in the music field is done. There are exceptions; Jonas Brothers, Taylor Swift. Yet I’d be willing to bet in five years, musically, Miley Cyrus will be as relevant as Hilary Duff or Lindsay Lohan. If I told you five years ago Lohan was finished musically, you would have called me a fool. A Little More Personal, released in 2005, sold 500,000 units. Her first CD, Speak, released in 2004, sold more than a million units.


Hilary Duff’s Metamorphosis, released in 2003, sold more than 3-million copies. By 2007, Dignity barely broke half-a-million copies, yet it went gold.


As you can see, long term sales in music will be limited to single downloads. Unfortunately, after the distribution channels are paid, musicians, studio time, etc. an artist is lucky to make 5 cents per song. About what Chuck Berry and Bo Diddley made in the 1950s when 5 cents was worth about 60 cents according to my gasoline economic equivalency scale.

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