MIMO - When Music is Your Fix

Album Sales Slump for First Half of 2014—Commentary/Analysis

More bad news this week for the record industry. As Hypebot reports (via Celebrity Access), the Neilsen SoundScan and Neilsen BDI numbers released this week show that between December 30, 2013 and June 29, 2014, album sales  slumped 14.9% versus the same time period last year. Where in years past an increase in digital download sales was able to offset physical CD sales drops, for this six-month period digital albums are actually off by 11.6 %, with physical CD sales declining 19.6%. Downloads of individual tracks held their own, declining only a little during the sales period.

At the same time, two important numbers went up, pointing to a couple of interesting trends. Vinyl album sales are up once again—by more than 40 percent for the first half of 2014 compared to the same time frame in 2013.  The other increase? Streaming media, which has increased by a whopping 42 percent.

These numbers point to some significant changes in the music market that are both intriguing and disturbing at the same time. The intriguing part is that the numbers demonstrate that changes in technology are moving so quickly that the industry itself is having trouble adapting to it in a reasonable amount of time.  Just a couple of years ago, digital album sales were skyrocketing, leading analysts to believe that digital downloads would compensate for the ongoing drop in physical sales.  But before that trend could even solidify, streaming media exploded, shifting the delivery away from downloads toward live streaming—and now, both digital AND physical sales are slumping.

This brings us to the disturbing part: streaming services (e.g., Spotify, Pandora, YouTube, iTunes Radio) do pay royalties, but those royalties currently do not match what artists and labels make in actual sales. This is creating a crisis affecting not only the industry bigwigs, but the independent artists as well.  It could well be argued that consumers aren’t “consuming” less music (in fact, they’re accessing more of it than ever before)—they’re just changing the delivery systems by which they access the music.  But simple math says when the new delivery system pays far less money per track than the old delivery system, musicians make less money for their efforts. This is what has led numerous artists to take a public stand against streaming services, demanding fairer compensation.

What about the renaissance of vinyl? How does this play into the situation? Well, when you consider that vinyl records almost went extinct before they started coming back into fashion among certain dedicated music fans, this increase doesn’t amount to much—certainly not enough to counterbalance the decline in CD and digital sales.  It’s a part of the market that artists (particularly indie artists) need to take seriously, but vinyl sales will probably not grow enough to solve the problem.

So what will solve the problem?  Simply put, it’s time for the parties involved to take a serious look at adapting the new technologies so that artists can be paid fairly.  Streaming media is probably not going anywhere for awhile, so the questions need to be asked: how can the payment structure be altered to give musicians the compensation they deserve without bankrupting the outlets delivering the music? And how can regulations be put in place to make this happen?

This is not the first time the financial sector of the music industry has been thrown into crisis, and it likely won’t be the last.  Balance has always been achieved eventually, and my opinion is that it will be achieved again.  But being someone who is ultimately for the artist, my belief is that finding that balance needs to become more intentional at this point.  It simply is not right for musicians to be paid far less for the same amount of output.  Either we need to find a way for streaming services to pay these artists what they deserve, or we need to find a delivery system that will. In the meantime, if you’re a music fan, be a responsible one.  Until this thing finds a balance…support your favorite artists (especially the indie artists) by buying a record once in awhile.

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About the Author


David Tillman is an independent composer/arranger whose primary work involves writing jingles for commercials for radio and television, with several film and television placements to his credit as well. David has a fascination for all things related to the music business and the music industry in general, an obsession which his wife finds to be mildly unhealthy at times. His personal tastes in music are in electronica and industrial rock, and include The Chemical Brothers, Daft Punk and Nine Inch Nails (he loves that Trent Reznor is writing soundtracks!). When not in his office or in his man-cave, David enjoys skiing, hiking, the occasional game of golf, and sometimes just lounging by the pool. David lives with his wife and three children in Los Angeles, CA.

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