commentary Album sales have slumped since the glory days of the late 80s and early 90s, yet more people are buying music than ever before. What's going on here?
Market research firm eMarketer recently published a study about U.S. consumer spending on music since 1980. Most commenters have seized on the fact that the study shows a higher percentage of people are buying music today than ever, but that those users are spending much less, probably due to the rise of single-song downloads. eMarketer calls these "MP3 downloads" -- in fact, the number one source of legal downloads, iTunes, offers them in the AAC format, and many other sites offer downloads in the Windows Media Audio format.
Has the advent of MP3s changed how you buy music?
But I also noticed that music spending per capita rose dramatically in the late 80s and early 90s, peaking in 1995, then has declined ever since.
The conventional wisdom is that these changes were driven by technology: as CDs replaced other forms of recorded music in the late 80s, music sales were artifically boosted as everybody repurchased their LP (or cassette, or 8-track) collections in the new format. That replacement cycle ended just as piracy and single-song downloads emerged, hence, spending per capita plummeted.
But as I've elsewhere, there were way more mega-selling albums -- 15 million or more -- released between the period of 1987-1996 than any decade before. This suggests that there was more interest than ever before in new music -- not just replacements.
Where's that interest today? The last album to move 10 million copies in the U.S. was Norah Jones's 2002 debut, Come Away With Me. Outkast's Speakerboxx/The Love Below, released in 2004, went 11 times platinum but was a double album, meaning "only" 5.5 million copies sold. The top selling album of 2006, the soundtrack to the TV show High School Musical sold only 3.7 million copies. Could there really be another few million burned or pirated copies sitting around?
Possibly. I think there are a lot of other factors at play, though. Market fragmentation is probably number one -- you don't see many top-selling albums that appeal to multiple age groups anymore. The obscure, unsigned local bands I've recently played in actually drew people who knew about us only from MySpace, and some of these kids (all under 25) viewed MySpace as a more valid source of musical information than radio or TV -- they prided themselves on downloading songs and following local bands they learned about there. (Although the latest dirt says that MySpace is no longer trendy, while Facebook's on the rise.) In other words, the mainstream's way more fragmented than it used to be, or maybe it no longer exists. That tail's getting awfully long.
Competition from new forms of entertainment is another factor -- one analyst expects Halo 3 to earn US$200 million in its first weekend. When's the last time an album release generated that much excitement?
jimmymcgee
24/09/2007 01:59 PM
It's definitely an interesting topic that has many factors. I think there is no doubt that piracy has had some effect, but other factors such as the quality of music being released have been overlooked. Record companies are playing it safe and I don't think there have been that many GREAT albums as compared to the early 90s for example. Have you ever walked into a JB-hi-fi in the city? It is ALWAYS packed. Blaming lack of sales on piracy is the easy way out of this argument, there is more to it than that.
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jgrant83
25/09/2007 09:16 AM
Thanks to file sharing people have a broader knowledge of artists and are purchasing songs and going to live events of artists they would otherwise never have known. I think those single albums with 10 million sales aren't happening as often due to people finding music they like better that might not be in the mainstream. Now you don't have to be Michael Jackson or U2 to have a fan base.
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pixolut
27/09/2007 09:34 AM
I could not agree more with your perspective on this. Fragmentation is the key - record companies blame piracy when really the entire landscape of popular culture has changed and these guys just have no idea. With the internet comes access. People are curious and adventurous and the lack of this access to music is what drove the record label culture monopoly for fifty years. All of a suden the whole thing changed - this fragmentation of the audience was introduced by a sudden VAST increase in CHOICE. Monopoly gone. Of course piracy will be the first target of the record labels as this is something that they have control over. Record labels will attempt to recoup losses through these legal means but ultimately the legal bills will outstrip the moneys which they recoup. The money they spend on legals would be better spent on diverging their portfolios in to the broader entertainment business. Universal Vivendi is a good example... whilst they still follow the standard litigious practises of other labels they are broadening in to the massive games market (average price of a computer game has quintupled in 15 years whilst the average price of an album has remained stagnant and actually decreased in line with CPI inflation) and online entertainment. Film is facing similar pressures to music but the costs involved in production will always reduce the playing field and therefore reduce culturally driven fragmentation to some extent.
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Hoody
27/09/2007 10:43 AM
Yeah, fragmentation has played a big part, but it shouldn't really affect a record company's profits unless, of course, more and more sales have been attributed to "independent labels". Maybe record companies should think about taking a risk, and signing up some less well known, up and coming artists, rather than sticking with the conservative musicians such as Norah Jones and crew.
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