11 ms·

Ringtones barely made a blip amidst the rapidly declining CD revenue. CD revenue started to decline after Napster was released in 1999 and the music industry ne

Ringtones barely made a blip amidst the rapidly declining CD revenue. CD revenue started to decline after Napster was released in 1999 and the music industry never fully recovered. Good chart here: https://www.visualcapitalist.com/music-industry-sales/ https://www.visualcapitalist.com/music-industry-sales/

foota 6y ago
It looks like this could also be partly due to the recessions in 2001 and 2008, based on the chart, as well as the decline in physical media.
- chrisco255 6y ago
  If you notice, the decline started in 1999, while economy was absolutely booming. There was also a recession in 1991, and the industry revenue continued to grow there. CDs were still very much the primary method of consumption for audio well into the early 2000s. But yes, eventually (by 2005 or so) the iPod had become very sleek and popular. Still, iPods were generally powered by iTunes sales, and you'll note the iTunes sales never made up for the loss in CD sales. Part of the reason for that could be that for the first time, you could buy single tracks rather than pay for an entire album of songs you may or may not like. Certainly torrents had a dramatic effect on sales. Even when I was in high school in early 2000s, kids were selling bootlegged CDs for $5 a pop because they had burners and fast enough connections to download many songs (broadband wasn't even that widespread in early 2000s). Everyone was on Napster after it came out in 1999. I can't even describe to you the magic of being able to download virtually any song you can think of. Prior to that, you had to hunt a song down physically or listen to a radio station for hours, hoping to catch it in time to press the record button on your cassette tape.
  - georgespencer 6y ago
    Great point about CDs being pretty much recession-proof. Minor quibble: > iPods were generally powered by iTunes sales I think this is the lionised view of the iPod, but it's not really backed up by the stats or the early marketing ("Rip. Mix. Burn.") which was targeted at folks who were still buying CDs. Apple sold its 10 millionth iTunes song in September of 2003, and around that time would have sold around 1.5 million iPods (they'd sold 600k in January '03, and announced that they'd shipped 2 million in January '04). So if you assume that all iTMS sales are to iPod owners (as someone who did not own an iPod until around 2007, but bought music on iTunes, I am a very small datapoint that speaks to this not being true!), then the average iPod owner either only had only around 7 songs on their iPod, or iPods were principally powered by CD rips and illegal downloads. It doesn't change the thrust of your point but I thought you might find it interesting.
    - ghaff 6y ago
      iTunes wasn't even available on Windows initially. (Although it was added pretty quickly.) It was definitely primarily initially about songs ripped from CDs (or downloaded via Napster).
      - catalogia 6y ago
        The first iPod to really become popular was the 4G, which I think not coincidentally was also the first to have proper USB support. iTunes not being on Windows seems like a lesser factor; even if iTunes was on Windows it wouldn't have mattered because most Windows computers of that time did not have firewire ports. As soon as iPods supported USB fully, their popularity took off like a rocket. https://en.wikipedia.org/wiki/IPod#/media/File:Ipod_sales_per_quarter.svg https://en.wikipedia.org/wiki/IPod#/media/File:Ipod_sales_pe... Incidentally, cmdrtaco was right about the extant iPod he was actually criticizing. It was lame and that iPod never became popular. He's mocked in retrospect because later revisions of the iPod became massively popular, but the version he was responding to never did.
        ghaff 6y ago
        I largely agree with all that. The eventual incredible success of the iPod which in turn was the beachhead for the iPhone (which also wasn't really a massive success until the 3G) tends to obscure its early history. The initial iPod was basically one of many digital music players available at the time and, as you say, you couldn't even really use it with the desktop computers that had something like 95% market share. Apple clearly became one of the most successful companies ever, but it's not like that was an inevitability as soon as they released the first iPod.
        georgespencer 6y ago
        Totally agree, in the main. Looking back it's very weird and un-Apple-like that iPod launched without iTMS, although taking their time held them in good stead with the App Store and simultaneously launching new hardware alongside a marketplace seems to have held them back with iPad/iBooks and the watch + its anaemic store. I quibble one point you made (sorry -- former employees sometimes turn into nitpicking apologists): > cmdrtaco was right about the extant iPod he was actually criticizing. It was lame and that iPod never became popular. You're right that this iPod never became as popular as we understand the iPod to have been looking back from 2020, but the implication is that it was held back because of the assessment cmdrtaco made of it: > No wireless. Less space than a nomad. Lame. Clearly it had no WiFi and a lower capacity than a Nomad, but that would continue to be the case for many years, right up to peak iPod in 2008 when Apple introduced the first iPod with WiFi (iPod Touch 1G). (Apple was never interested in competing on capacity -- a feature -- and actively sought to reframe marketing towards _benefits_, like how many songs or photos the capacity enabled you to hold in your pocket.) So the absence of WiFi and lower capacity than Creative's lineup did not appear to be limiting factors in the iPod's success. I think they made it lame to cmdrtaco, but each subsequent iPod for the better part of a decade 'suffered' from the same lameness, and did so well that Amazon had precisely two sections for MP3 players for many years: "iPod" and "Non-iPod Music players"! I believe that the tipping point for iPod came alongside several things: the final refinement to the interaction model (scroll wheel => touch wheel -- the first device is identifiably an iPod but almost ashamedly so, with buttons around the edge of the wheel which ruin the fascia), the miniaturisation of the device (and in particular the ruthless Jobsian cannibalisation of the Mini with the Nano), and the vacuum of competition around iTMS from its launch through 2006 or so.
MaximumYComb 6y ago
Napster was a godsend. The music industry was a racket. In 1999 it would cost me around $32 for a single CD album here in Australia. That's close to $55 dollars today adjusted for inflation. When music/movies/games first moved to online distribution they had artificially inflated prices here. The cost of these would often be 40-80% than what Americans would pay. This was due to their distribution deals that companies had to artificially drive up prices here. When the Australian dollar rose against the US dollar they changed out prices to Australian dollars, since for the first time we were paying the same as the Americans. Overnight these things rose in price 50%. I pay for my music. I have had a Spotify subscription for years. They're offering me a product at a reasonable price. You try to extort people and they'll move back to piracy.
- chrisco255 6y ago
  I wouldn't call it extortion. The music industry doesn't produce the same quality or number of quality songs it once did. There hasn't even been any substantially new genres in two decades. It's much, much harder to make it big as an independent artist these days. Besides the monetization problem, which is a big one, you also have a big discovery problem. There's a lot of things competing for people's time and attention and you have to compete with all the other songs in people's large streaming libraries to make a fraction of what you would have from CD sales two decades ago.
  - Semaphor 6y ago
    > you also have a big discovery problem I find it far easier than ever before to discover new music. Which leads me to: > It's much, much harder to make it big as an independent artist these days My (possibly naive and certainly not backed by any insider knowledge) thinking is, that this is because you have far more than there used to be as the barrier of entry is far lower. I’ve bought music from all kinds of artists than I probably would never even have found even just 10 years ago.
    - oauea 6y ago
      My (certainly naive and not backed by any knowledge) opinion is that nowadays it's much easier to make it as a nobody. That's why it's happening so much, and they're all competing with each other. Now we have many very good musicians, but the studios won't manage to create another legendary musician anymore.
jimmySixDOF 6y ago
This article misses existing revenue streams for "Ring&Sing" where you pay for your calling party to hear the song of your choice instad of a ringing sound until you pickup. These subscriptions are huge earners in big markets like India some claim it makes up for lost sms revenues. But I also spent many hours on GoldWave 4.x mixing my own mp3 ringtones for years and still enjoy picking out a good riff when I hear it. I have a nice section of Eric Clapton's Layla looped as well as some Chilli Peppers, the Doors intro to Love me 2 Times, the sax on Born to Run + Quite a few more.
goto11 6y ago
There is a quite significant dip 1979-82. Anybody knows the reason?
- agumonkey 6y ago
  No but interviews mention Quincy Jones saying that he made Thriller to "save the music industry". Ambition aside, it seemed to be a serious issue.. yet I can't recall why ? post disco fad counterwave ?
- dillonmckay 6y ago
  Gas crisis? More difficult to go to the store? Also, 8-track tapes? Total speculation.
- minikomi 6y ago
  Home record/radio dubbing? It's right about when the "Home Taping Is Killing Music" campaign came about.
- ghaff 6y ago
  It was a fairly severe recession (that partly led to Reagan's election). To other comments, it was well past the gas crisis, cassette taping had been around for ages, and CDs were just coming in (which, if anything, led to people replacing worn vinyl with new digital media). So I'm mostly going with recession.
  - mixmastamyk 6y ago
    Recession yes, though it was at the end of that period when Volcker moved to quash inflation. CDs didn't arrive in large numbers until the mid 80s.
- paleotrope 6y ago
  When did FM radio take off? Maybe that's a connection?
- paleotrope 6y ago
  Also, it might be more useful to consider if the CD era was an outlier. Also, I don't know if the start date is of any significance.
wink 6y ago
That's such an interesting graphic. I got my first cd for christmas 1994 as a kid and I was kind of in the middle of adoption. Middle-class family in Germany. Some friends of mine already had CD players, but not all. MCs were still everywhere, but I can't really comment on how much people actually spent. I simply can't believe that the 1990-92 numbers are true in an adoption sense, or maybe the revenue was just a lot better than for MCs, because I honestly don't know anyone who had a meaningful CD collection in 1990 already. And this is not because I was too young (see above, first CD in 94) but even my friends' parents didn't have CDs from the 80s, later in the 90s.
- usrusr 6y ago
  1990-92, kids didn't have CD players yet but the "Hi-Fi generation" that grew up alongside the rock and pop music industry were deep enough into their careers to have the disposable income for buying a CD player and an accompanying library of CD re-releases of the LPs they could not afford when they were young. Re-releases where huge in the transition period from LP to CD.
  - saltcured 6y ago
    In California suburbs, I remember when the somewhat upper-middle-class teenager next door showed off his CD player in the early 80s, before he graduated high school. It was the first and most primitive one I ever saw. Within a few years, my parents had added one to their hifi system, as did most other families I knew. Well before I graduated high school in '92, I had added a 10-disc changer to my bedroom hifi, using my own odd job cash from paper routes, lawn mowing, etc. It was some kind of scratch/dent item I got from the local home electronics store, and I think it cost me less than my first walkman from the mid-80s. I might have only owned two dozen CDs by then, still having a lot more music on tapes. I can't remember for certain whether the "record clubs" that kids got into for vinyl LPs also existed for CDs, but I suspect they did.
- pbhjpbhj 6y ago
  It's US music industry sales data, so there's no reason to believe it applies _directly_ to Germany. Also that's revenue. I didn't check, but isn't Compact Disc an industry standard and registered trademark, that required payment? So, there would be revenue associated with hardware sales which would front load the figures?? That chart needs an overall revenue area, and an items sold overlay to make it really useful.
AndrewStephens 6y ago
Napster and the like hurt the music industry but didn't land the killing blow to CDs. The murder weapon was the cheap DVD player. In the mid-nineties, my cool friends with money had huge collections of CDs and listened to a lot of music. It was not uncommon to see shelves with scores of CDs proudly displayed in the living room next to an expensive stereo system. By the early 2000s that was gone, replaced by a DVD player, the largest TV they could afford, and a stack of DVDs. Maybe a game console or two as well. All the disposable income that a decade earlier was being poured into music was now going toward the film and gaming industries. Sure there was plenty of piracy but I would argue not enough to explain the drop.
- mixmastamyk 6y ago
  It's an interesting point and think it has merit. Personally however, I never bought many DVDs, probably less than 1/10 of the CDs I have. The main reason is that there are few movies I want to watch over and over again like a good album. Perhaps because an album can play in the background, but a dvd practically demands an afternoon or evening dedicated to it. But yes, every year or three there are more places to put your money.
hakfoo 6y ago
But even aside from Napster and CD-Rs and iPods, the seeds of a downturn were planted in the 1980s. There had been generations of format replacements-- cylinders to 78 to 45 to 33, reel-to-reel to weird cartridges and 8-track, then onward to compact cassette, but the CD ended up being the last meaningful physical audio format. It's durable enough that people aren't having to re-buy their favourites after they unspool in the player, or the groove was reamed out by a heavy tonearm. It's high-fidelity enough that a replacement format won't make a sonic difference on most consumer grade equipment. It's convenient enough that people didn't need to buy another format as a compromise for portable play. This meant all past business models for music consumption were going to fail as CDs reached saturation. You're not going to be selling a lot of classic albums anymore. The only way to go forward would have been an endless supply of new content, but then we get to the matter of attention and shelf space being finite. Sure, Napster may have been pulled the trigger, but it shot an uindustry that was already on the verge of a massive coronary.

foota 6y ago

It looks like this could also be partly due to the recessions in 2001 and 2008, based on the chart, as well as the decline in physical media.

chrisco255 6y ago
If you notice, the decline started in 1999, while economy was absolutely booming. There was also a recession in 1991, and the industry revenue continued to grow there. CDs were still very much the primary method of consumption for audio well into the early 2000s. But yes, eventually (by 2005 or so) the iPod had become very sleek and popular. Still, iPods were generally powered by iTunes sales, and you'll note the iTunes sales never made up for the loss in CD sales. Part of the reason for that could be that for the first time, you could buy single tracks rather than pay for an entire album of songs you may or may not like. Certainly torrents had a dramatic effect on sales. Even when I was in high school in early 2000s, kids were selling bootlegged CDs for $5 a pop because they had burners and fast enough connections to download many songs (broadband wasn't even that widespread in early 2000s). Everyone was on Napster after it came out in 1999. I can't even describe to you the magic of being able to download virtually any song you can think of. Prior to that, you had to hunt a song down physically or listen to a radio station for hours, hoping to catch it in time to press the record button on your cassette tape.
- georgespencer 6y ago
  Great point about CDs being pretty much recession-proof. Minor quibble: > iPods were generally powered by iTunes sales I think this is the lionised view of the iPod, but it's not really backed up by the stats or the early marketing ("Rip. Mix. Burn.") which was targeted at folks who were still buying CDs. Apple sold its 10 millionth iTunes song in September of 2003, and around that time would have sold around 1.5 million iPods (they'd sold 600k in January '03, and announced that they'd shipped 2 million in January '04). So if you assume that all iTMS sales are to iPod owners (as someone who did not own an iPod until around 2007, but bought music on iTunes, I am a very small datapoint that speaks to this not being true!), then the average iPod owner either only had only around 7 songs on their iPod, or iPods were principally powered by CD rips and illegal downloads. It doesn't change the thrust of your point but I thought you might find it interesting.
  - ghaff 6y ago
    iTunes wasn't even available on Windows initially. (Although it was added pretty quickly.) It was definitely primarily initially about songs ripped from CDs (or downloaded via Napster).
    - catalogia 6y ago
      The first iPod to really become popular was the 4G, which I think not coincidentally was also the first to have proper USB support. iTunes not being on Windows seems like a lesser factor; even if iTunes was on Windows it wouldn't have mattered because most Windows computers of that time did not have firewire ports. As soon as iPods supported USB fully, their popularity took off like a rocket. https://en.wikipedia.org/wiki/IPod#/media/File:Ipod_sales_per_quarter.svg https://en.wikipedia.org/wiki/IPod#/media/File:Ipod_sales_pe... Incidentally, cmdrtaco was right about the extant iPod he was actually criticizing. It was lame and that iPod never became popular. He's mocked in retrospect because later revisions of the iPod became massively popular, but the version he was responding to never did.
      - ghaff 6y ago
        I largely agree with all that. The eventual incredible success of the iPod which in turn was the beachhead for the iPhone (which also wasn't really a massive success until the 3G) tends to obscure its early history. The initial iPod was basically one of many digital music players available at the time and, as you say, you couldn't even really use it with the desktop computers that had something like 95% market share. Apple clearly became one of the most successful companies ever, but it's not like that was an inevitability as soon as they released the first iPod.
      - georgespencer 6y ago
        Totally agree, in the main. Looking back it's very weird and un-Apple-like that iPod launched without iTMS, although taking their time held them in good stead with the App Store and simultaneously launching new hardware alongside a marketplace seems to have held them back with iPad/iBooks and the watch + its anaemic store. I quibble one point you made (sorry -- former employees sometimes turn into nitpicking apologists): > cmdrtaco was right about the extant iPod he was actually criticizing. It was lame and that iPod never became popular. You're right that this iPod never became as popular as we understand the iPod to have been looking back from 2020, but the implication is that it was held back because of the assessment cmdrtaco made of it: > No wireless. Less space than a nomad. Lame. Clearly it had no WiFi and a lower capacity than a Nomad, but that would continue to be the case for many years, right up to peak iPod in 2008 when Apple introduced the first iPod with WiFi (iPod Touch 1G). (Apple was never interested in competing on capacity -- a feature -- and actively sought to reframe marketing towards _benefits_, like how many songs or photos the capacity enabled you to hold in your pocket.) So the absence of WiFi and lower capacity than Creative's lineup did not appear to be limiting factors in the iPod's success. I think they made it lame to cmdrtaco, but each subsequent iPod for the better part of a decade 'suffered' from the same lameness, and did so well that Amazon had precisely two sections for MP3 players for many years: "iPod" and "Non-iPod Music players"! I believe that the tipping point for iPod came alongside several things: the final refinement to the interaction model (scroll wheel => touch wheel -- the first device is identifiably an iPod but almost ashamedly so, with buttons around the edge of the wheel which ruin the fascia), the miniaturisation of the device (and in particular the ruthless Jobsian cannibalisation of the Mini with the Nano), and the vacuum of competition around iTMS from its launch through 2006 or so.

MaximumYComb 6y ago

Napster was a godsend. The music industry was a racket. In 1999 it would cost me around $32 for a single CD album here in Australia. That's close to $55 dollars today adjusted for inflation. When music/movies/games first moved to online distribution they had artificially inflated prices here. The cost of these would often be 40-80% than what Americans would pay. This was due to their distribution deals that companies had to artificially drive up prices here. When the Australian dollar rose against the US dollar they changed out prices to Australian dollars, since for the first time we were paying the same as the Americans. Overnight these things rose in price 50%. I pay for my music. I have had a Spotify subscription for years. They're offering me a product at a reasonable price. You try to extort people and they'll move back to piracy.

chrisco255 6y ago
I wouldn't call it extortion. The music industry doesn't produce the same quality or number of quality songs it once did. There hasn't even been any substantially new genres in two decades. It's much, much harder to make it big as an independent artist these days. Besides the monetization problem, which is a big one, you also have a big discovery problem. There's a lot of things competing for people's time and attention and you have to compete with all the other songs in people's large streaming libraries to make a fraction of what you would have from CD sales two decades ago.
- Semaphor 6y ago
  > you also have a big discovery problem I find it far easier than ever before to discover new music. Which leads me to: > It's much, much harder to make it big as an independent artist these days My (possibly naive and certainly not backed by any insider knowledge) thinking is, that this is because you have far more than there used to be as the barrier of entry is far lower. I’ve bought music from all kinds of artists than I probably would never even have found even just 10 years ago.
  - oauea 6y ago
    My (certainly naive and not backed by any knowledge) opinion is that nowadays it's much easier to make it as a nobody. That's why it's happening so much, and they're all competing with each other. Now we have many very good musicians, but the studios won't manage to create another legendary musician anymore.

jimmySixDOF 6y ago

This article misses existing revenue streams for "Ring&Sing" where you pay for your calling party to hear the song of your choice instad of a ringing sound until you pickup. These subscriptions are huge earners in big markets like India some claim it makes up for lost sms revenues. But I also spent many hours on GoldWave 4.x mixing my own mp3 ringtones for years and still enjoy picking out a good riff when I hear it. I have a nice section of Eric Clapton's Layla looped as well as some Chilli Peppers, the Doors intro to Love me 2 Times, the sax on Born to Run + Quite a few more.

goto11 6y ago

There is a quite significant dip 1979-82. Anybody knows the reason?

agumonkey 6y ago
No but interviews mention Quincy Jones saying that he made Thriller to "save the music industry". Ambition aside, it seemed to be a serious issue.. yet I can't recall why ? post disco fad counterwave ?
dillonmckay 6y ago
Gas crisis? More difficult to go to the store? Also, 8-track tapes? Total speculation.
minikomi 6y ago
Home record/radio dubbing? It's right about when the "Home Taping Is Killing Music" campaign came about.
ghaff 6y ago
It was a fairly severe recession (that partly led to Reagan's election). To other comments, it was well past the gas crisis, cassette taping had been around for ages, and CDs were just coming in (which, if anything, led to people replacing worn vinyl with new digital media). So I'm mostly going with recession.
- mixmastamyk 6y ago
  Recession yes, though it was at the end of that period when Volcker moved to quash inflation. CDs didn't arrive in large numbers until the mid 80s.
paleotrope 6y ago
When did FM radio take off? Maybe that's a connection?
paleotrope 6y ago
Also, it might be more useful to consider if the CD era was an outlier. Also, I don't know if the start date is of any significance.

wink 6y ago

That's such an interesting graphic. I got my first cd for christmas 1994 as a kid and I was kind of in the middle of adoption. Middle-class family in Germany. Some friends of mine already had CD players, but not all. MCs were still everywhere, but I can't really comment on how much people actually spent. I simply can't believe that the 1990-92 numbers are true in an adoption sense, or maybe the revenue was just a lot better than for MCs, because I honestly don't know anyone who had a meaningful CD collection in 1990 already. And this is not because I was too young (see above, first CD in 94) but even my friends' parents didn't have CDs from the 80s, later in the 90s.

usrusr 6y ago
1990-92, kids didn't have CD players yet but the "Hi-Fi generation" that grew up alongside the rock and pop music industry were deep enough into their careers to have the disposable income for buying a CD player and an accompanying library of CD re-releases of the LPs they could not afford when they were young. Re-releases where huge in the transition period from LP to CD.
- saltcured 6y ago
  In California suburbs, I remember when the somewhat upper-middle-class teenager next door showed off his CD player in the early 80s, before he graduated high school. It was the first and most primitive one I ever saw. Within a few years, my parents had added one to their hifi system, as did most other families I knew. Well before I graduated high school in '92, I had added a 10-disc changer to my bedroom hifi, using my own odd job cash from paper routes, lawn mowing, etc. It was some kind of scratch/dent item I got from the local home electronics store, and I think it cost me less than my first walkman from the mid-80s. I might have only owned two dozen CDs by then, still having a lot more music on tapes. I can't remember for certain whether the "record clubs" that kids got into for vinyl LPs also existed for CDs, but I suspect they did.
pbhjpbhj 6y ago
It's US music industry sales data, so there's no reason to believe it applies _directly_ to Germany. Also that's revenue. I didn't check, but isn't Compact Disc an industry standard and registered trademark, that required payment? So, there would be revenue associated with hardware sales which would front load the figures?? That chart needs an overall revenue area, and an items sold overlay to make it really useful.

AndrewStephens 6y ago

Napster and the like hurt the music industry but didn't land the killing blow to CDs. The murder weapon was the cheap DVD player. In the mid-nineties, my cool friends with money had huge collections of CDs and listened to a lot of music. It was not uncommon to see shelves with scores of CDs proudly displayed in the living room next to an expensive stereo system. By the early 2000s that was gone, replaced by a DVD player, the largest TV they could afford, and a stack of DVDs. Maybe a game console or two as well. All the disposable income that a decade earlier was being poured into music was now going toward the film and gaming industries. Sure there was plenty of piracy but I would argue not enough to explain the drop.

mixmastamyk 6y ago
It's an interesting point and think it has merit. Personally however, I never bought many DVDs, probably less than 1/10 of the CDs I have. The main reason is that there are few movies I want to watch over and over again like a good album. Perhaps because an album can play in the background, but a dvd practically demands an afternoon or evening dedicated to it. But yes, every year or three there are more places to put your money.

hakfoo 6y ago

But even aside from Napster and CD-Rs and iPods, the seeds of a downturn were planted in the 1980s. There had been generations of format replacements-- cylinders to 78 to 45 to 33, reel-to-reel to weird cartridges and 8-track, then onward to compact cassette, but the CD ended up being the last meaningful physical audio format. It's durable enough that people aren't having to re-buy their favourites after they unspool in the player, or the groove was reamed out by a heavy tonearm. It's high-fidelity enough that a replacement format won't make a sonic difference on most consumer grade equipment. It's convenient enough that people didn't need to buy another format as a compromise for portable play. This meant all past business models for music consumption were going to fail as CDs reached saturation. You're not going to be selling a lot of classic albums anymore. The only way to go forward would have been an endless supply of new content, but then we get to the matter of attention and shelf space being finite. Sure, Napster may have been pulled the trigger, but it shot an uindustry that was already on the verge of a massive coronary.