5 ms·

Music Industry Sales Rise, and Digital Revenue Gets the Credit

37 points by rubikscube 14y ago

islon 14y ago
Digital was never killing music. Stupidity, greed and failure to cope with reality were killing music. (By music he meant the phonographic industry).
snarfy 14y ago
Billboard #1 songs of 2000-2009 http://www.digitaldreamdoor.com/pages/best_billbord6.html http://www.digitaldreamdoor.com/pages/best_billbord6.html Now, compare the previous decades. 1999 is the last time they made anything good (and even that is questionable). They can blame piracy or the internet all they want but really it's their product that sucks.
- logn 14y ago
  This is around the time that Clear Channel bought up lots of stations. Combine that with piracy which I think caused people to seek out old/existing music they were previously familiar with, and it stagnated the new music. You simply can't have Clear Channel and media conglomerates choosing the hits and expect good results. I think the Internet now does a much better job of generating organic growth of talent and hits, and AM/FM is largely irrelevant.
  - randomdata 14y ago
    Even for new music, I remember in the same timeframe always saying that there was no need to buy the CD, I could just turn on the radio and hear the song I wanted to hear within five minutes. The internet was an easy scapegoat, but I agree that broadcast radio was the real downfall of the industry during that time.
- k-mcgrady 14y ago
  >> "They can blame piracy or the internet all they want but really it's their product that sucks" I think more and more they're having to make product/music that has mass market appeal and the internet's making that worse. You can make the world's worst song and pair it with a stupid viral video and get a number 1. Making good music doesn't guarantee success. Making something that can go viral does.
  - logn 14y ago
    I see where you're going with this but it's not the reality today. First, it's not true that viral videos dictate music hits. See 2012 hits: http://en.wikipedia.org/wiki/List_of_Hot_100_number-one_singles_of_2012_%28U.S.%29 http://en.wikipedia.org/wiki/List_of_Hot_100_number-one_sing... . There's only one song (LMFAO) which is popular at least in part due to a creative video. Gotye/Kimbra might make two--but the song itself is absolutely incredible. It's basically the same story for 2011 as well. 2013 has seen two hit songs with viral videos, but the year is young and there's only been 3 hits total. Also, I think all of the viral video hits (Gangnam Style, Thrift Shop, Harlem Shake) are arguably solid pop songs in their own right.
- kevincennis 14y ago
  This is a really common argument, but I think it's sort of a dishonest one. There are still plenty of great records being made. Discovery tools like Spotify and Pandora are making it easier than ever for people to find new music. Terrestrial radio is still hugely important, but it's entirely possible now to build an online following and force Clear Channel's hand even without major label promotion and payola. If you're not happy with the current landscape of Billboard's Hot 100, I think the blame really falls more with consumers than it does with the labels. Right or wrong, people love "Call Me Maybe".
ericcholis 14y ago
So, in other words, instead of pioneering the digital age of music they spent the better portion of last 14 years fighting it. However, kudos to the consumer for forcing such a monolithic industry into changing for the better.
- hkmurakami 14y ago
  So, in other words, instead of pioneering the digital age of music they spent the better portion of last 14 years fighting it. If Sony couldn't embrace digital music when it first arrived in the 90's, then I guess we shouldn't have been surprised that less technically forward thinking firms didn't jump on board readily.
  - nailer 14y ago
    > If Sony couldn't embrace digital music when it first arrived in the 90's I know Phillips created the CD, but Sony did it's bit embracing digital with its DiscMan products in the nineties. The issue is more about whether they embraced the internet as a means of distribution. ;-)
    - hkmurakami 14y ago
      Right, not to mention their draconian anti-cd-ripping policies.
christiansmith 14y ago
I suspect this will turn out to be a "dead cat bounce"[1]. The record industry still hasn't figured out that its customers are actually the musicians, not the audience. Musicians aren't expendable laborers, they're businesses that need various kinds of services in order to deliver to their own customers (audiences). If the labels really want to make a meaningful place for themselves in the post-filesharing universe, they first need to correct this perversely inverted relationship. [1] http://www.investopedia.com/terms/d/deadcatbounce.asp http://www.investopedia.com/terms/d/deadcatbounce.asp
- sanderjd 14y ago
  I don't follow the music business, but I'm certain there are companies that have had this insight and will be major players in the next generation of the industry. Anybody know who they are?
  - deleted 14y ago
    [deleted]
mikegioia 14y ago
“If there is a lesson to take away, it is probably that the earlier you can embrace new business models and services, the better,” said Paul Brindley, chief executive of Music Ally, a consulting firm in London. Oh really? That lesson wasn't learned when VHS was created? Or cassette tapes? Or CDs? Or DVDs? Or e-books? Or when millions upon millions of their customers preferred to download music instead of purchase a disc? What the hell were these guys doing for the last 15 years? It's great that they're "embracing digital". That phrase is used by every aging exec in every industry now. The real question is how will they handle kids who create youtube mashups of songs. I guarantee they still file DMCA takedowns for years to come when in fact, THAT is yet another "new business model and service" that could help the music industry.
- hkmurakami 14y ago
  What the hell were these guys doing for the last 15 years? Lobbying.
- S_A_P 14y ago
  This paragraph really stuck out to me as well. I can't count the number of times consumers, artists, and just about anyone with a smidgen of common sense were screaming out to the music execs "embrace digital you idiots!!!" Now it's there idea so I guess it's a solid mandate...
erikschoster 14y ago
I wonder if these numbers take into account direct sales to musicians on services like bandcamp. I assume the article mostly (entirely?) refers to publicly reporting music distribution & publishing companies. If so, there's a significant part of this story missing.
newishuser 14y ago
Reporting Revenue is a hugely political affair. There are many ways to manipulate that number and it's not really a direct measurement of the health of the industry. It's only real use is for pointing at and shouting "look at what new fangled technology is doing to us. we must restrict everything."
- intopieces 14y ago
  >It's only real use is for pointing at and shouting "look at what new fangled technology is doing to us. we must restrict everything." Absolutely correct. Tim Wu illustrates this beautifully in "The Master Switch: The Rise and Fall of Information Empires." Basically, disruptive technology is nixed because it's cheaper to defend your entrenched method than to sail off into unknown waters, open to competition. My favorite example from the book is Bell Laboratories, who invented a machine that could answer a telephone and record what the speaker was saying in the 1920s, but killed the project because they believed that people would stop using phones.
grimey27 14y ago
Surprising to me that vinyl got no mention here. I know it's only a relatively small bump, but vinyl sales have been on the rise year over year for the past few.
mindslight 14y ago
Increased funding for heavy-handed lawsuits, coercing ISPs to monitor and interfere with subscribers, lobbying for more personally invasive laws, and pushing locked down "trusted" computing. Yay!
ivancdg 14y ago
The damage has been done. The major labels (major now only in terms of increasingly dubious marketing clout) now spend most of their 'creative' energy scouting do-it-yourself musicians rather than producing great music...which was, initially, what distinguished them from the little guys. This leveling of the playing field was supposed to be a great thing for everyone except the majors. But as a listener, I bemoan that the output quality of the majors has dropped so much (especially in classical music). In order to get access to first class, interesting music, it is becoming increasingly necessary to do tons of research. The bigger picture is this: would you invest in a business that celebrated not losing revenue for the first time in over a decade? I wouldn't. Edit: thank you, pgsandstrom
- pgsandstrom 14y ago
  They haven't been losing money since -99, their revenue has been shrinking.
  - ivancdg 14y ago
    Thank you, I made the correction.
jeremysmyth 14y ago
“At the beginning of the digital revolution it was common to say that digital was killing music,” said Edgar Berger, chief executive of the international arm of Sony Music Entertainment. Now, he added, it could be said “that digital is saving music.” This is what I want to hear from music executives, along with other commentary in the article that mentions subscription services like Spotify. The sooner the industry realises that what customers want is ease of access, above and beyond piracy, and that piracy isn't actually a threat if you give customers what they want, then the sooner we can get beyond this war on digital media that's been a blight on computing for the last decade.
- mikegioia 14y ago
  Why the hell does it take 14 years to come to this realization, when ALL SIGNS were pointing towards digital saving the music industry?
  - christiansmith 14y ago
    Pride, avarice, sloth and wrath. Did I miss anything? ;-)
    - hkmurakami 14y ago
      Fear, incompetence, risk aversion, agency problems, etc.

37 points by rubikscube 14y ago

islon 14y ago

Digital was never killing music. Stupidity, greed and failure to cope with reality were killing music. (By music he meant the phonographic industry).

snarfy 14y ago

Billboard #1 songs of 2000-2009 http://www.digitaldreamdoor.com/pages/best_billbord6.html http://www.digitaldreamdoor.com/pages/best_billbord6.html Now, compare the previous decades. 1999 is the last time they made anything good (and even that is questionable). They can blame piracy or the internet all they want but really it's their product that sucks.

logn 14y ago
This is around the time that Clear Channel bought up lots of stations. Combine that with piracy which I think caused people to seek out old/existing music they were previously familiar with, and it stagnated the new music. You simply can't have Clear Channel and media conglomerates choosing the hits and expect good results. I think the Internet now does a much better job of generating organic growth of talent and hits, and AM/FM is largely irrelevant.
- randomdata 14y ago
  Even for new music, I remember in the same timeframe always saying that there was no need to buy the CD, I could just turn on the radio and hear the song I wanted to hear within five minutes. The internet was an easy scapegoat, but I agree that broadcast radio was the real downfall of the industry during that time.
k-mcgrady 14y ago
>> "They can blame piracy or the internet all they want but really it's their product that sucks" I think more and more they're having to make product/music that has mass market appeal and the internet's making that worse. You can make the world's worst song and pair it with a stupid viral video and get a number 1. Making good music doesn't guarantee success. Making something that can go viral does.
- logn 14y ago
  I see where you're going with this but it's not the reality today. First, it's not true that viral videos dictate music hits. See 2012 hits: http://en.wikipedia.org/wiki/List_of_Hot_100_number-one_singles_of_2012_%28U.S.%29 http://en.wikipedia.org/wiki/List_of_Hot_100_number-one_sing... . There's only one song (LMFAO) which is popular at least in part due to a creative video. Gotye/Kimbra might make two--but the song itself is absolutely incredible. It's basically the same story for 2011 as well. 2013 has seen two hit songs with viral videos, but the year is young and there's only been 3 hits total. Also, I think all of the viral video hits (Gangnam Style, Thrift Shop, Harlem Shake) are arguably solid pop songs in their own right.
kevincennis 14y ago
This is a really common argument, but I think it's sort of a dishonest one. There are still plenty of great records being made. Discovery tools like Spotify and Pandora are making it easier than ever for people to find new music. Terrestrial radio is still hugely important, but it's entirely possible now to build an online following and force Clear Channel's hand even without major label promotion and payola. If you're not happy with the current landscape of Billboard's Hot 100, I think the blame really falls more with consumers than it does with the labels. Right or wrong, people love "Call Me Maybe".

ericcholis 14y ago

So, in other words, instead of pioneering the digital age of music they spent the better portion of last 14 years fighting it. However, kudos to the consumer for forcing such a monolithic industry into changing for the better.

hkmurakami 14y ago
So, in other words, instead of pioneering the digital age of music they spent the better portion of last 14 years fighting it. If Sony couldn't embrace digital music when it first arrived in the 90's, then I guess we shouldn't have been surprised that less technically forward thinking firms didn't jump on board readily.
- nailer 14y ago
  > If Sony couldn't embrace digital music when it first arrived in the 90's I know Phillips created the CD, but Sony did it's bit embracing digital with its DiscMan products in the nineties. The issue is more about whether they embraced the internet as a means of distribution. ;-)
  - hkmurakami 14y ago
    Right, not to mention their draconian anti-cd-ripping policies.

christiansmith 14y ago

I suspect this will turn out to be a "dead cat bounce"[1]. The record industry still hasn't figured out that its customers are actually the musicians, not the audience. Musicians aren't expendable laborers, they're businesses that need various kinds of services in order to deliver to their own customers (audiences). If the labels really want to make a meaningful place for themselves in the post-filesharing universe, they first need to correct this perversely inverted relationship. [1] http://www.investopedia.com/terms/d/deadcatbounce.asp http://www.investopedia.com/terms/d/deadcatbounce.asp

sanderjd 14y ago
I don't follow the music business, but I'm certain there are companies that have had this insight and will be major players in the next generation of the industry. Anybody know who they are?
- deleted 14y ago
  [deleted]

mikegioia 14y ago

“If there is a lesson to take away, it is probably that the earlier you can embrace new business models and services, the better,” said Paul Brindley, chief executive of Music Ally, a consulting firm in London. Oh really? That lesson wasn't learned when VHS was created? Or cassette tapes? Or CDs? Or DVDs? Or e-books? Or when millions upon millions of their customers preferred to download music instead of purchase a disc? What the hell were these guys doing for the last 15 years? It's great that they're "embracing digital". That phrase is used by every aging exec in every industry now. The real question is how will they handle kids who create youtube mashups of songs. I guarantee they still file DMCA takedowns for years to come when in fact, THAT is yet another "new business model and service" that could help the music industry.

hkmurakami 14y ago
What the hell were these guys doing for the last 15 years? Lobbying.
S_A_P 14y ago
This paragraph really stuck out to me as well. I can't count the number of times consumers, artists, and just about anyone with a smidgen of common sense were screaming out to the music execs "embrace digital you idiots!!!" Now it's there idea so I guess it's a solid mandate...

erikschoster 14y ago

I wonder if these numbers take into account direct sales to musicians on services like bandcamp. I assume the article mostly (entirely?) refers to publicly reporting music distribution & publishing companies. If so, there's a significant part of this story missing.

newishuser 14y ago

Reporting Revenue is a hugely political affair. There are many ways to manipulate that number and it's not really a direct measurement of the health of the industry. It's only real use is for pointing at and shouting "look at what new fangled technology is doing to us. we must restrict everything."

intopieces 14y ago
>It's only real use is for pointing at and shouting "look at what new fangled technology is doing to us. we must restrict everything." Absolutely correct. Tim Wu illustrates this beautifully in "The Master Switch: The Rise and Fall of Information Empires." Basically, disruptive technology is nixed because it's cheaper to defend your entrenched method than to sail off into unknown waters, open to competition. My favorite example from the book is Bell Laboratories, who invented a machine that could answer a telephone and record what the speaker was saying in the 1920s, but killed the project because they believed that people would stop using phones.

grimey27 14y ago

Surprising to me that vinyl got no mention here. I know it's only a relatively small bump, but vinyl sales have been on the rise year over year for the past few.

mindslight 14y ago

Increased funding for heavy-handed lawsuits, coercing ISPs to monitor and interfere with subscribers, lobbying for more personally invasive laws, and pushing locked down "trusted" computing. Yay!

ivancdg 14y ago

The damage has been done. The major labels (major now only in terms of increasingly dubious marketing clout) now spend most of their 'creative' energy scouting do-it-yourself musicians rather than producing great music...which was, initially, what distinguished them from the little guys. This leveling of the playing field was supposed to be a great thing for everyone except the majors. But as a listener, I bemoan that the output quality of the majors has dropped so much (especially in classical music). In order to get access to first class, interesting music, it is becoming increasingly necessary to do tons of research. The bigger picture is this: would you invest in a business that celebrated not losing revenue for the first time in over a decade? I wouldn't. Edit: thank you, pgsandstrom

pgsandstrom 14y ago
They haven't been losing money since -99, their revenue has been shrinking.
- ivancdg 14y ago
  Thank you, I made the correction.

jeremysmyth 14y ago

“At the beginning of the digital revolution it was common to say that digital was killing music,” said Edgar Berger, chief executive of the international arm of Sony Music Entertainment. Now, he added, it could be said “that digital is saving music.” This is what I want to hear from music executives, along with other commentary in the article that mentions subscription services like Spotify. The sooner the industry realises that what customers want is ease of access, above and beyond piracy, and that piracy isn't actually a threat if you give customers what they want, then the sooner we can get beyond this war on digital media that's been a blight on computing for the last decade.

mikegioia 14y ago
Why the hell does it take 14 years to come to this realization, when ALL SIGNS were pointing towards digital saving the music industry?
- christiansmith 14y ago
  Pride, avarice, sloth and wrath. Did I miss anything? ;-)
  - hkmurakami 14y ago
    Fear, incompetence, risk aversion, agency problems, etc.