No, The Music Industry Outlook Isn't Grim... Just For Selling Recorded Music

from the it-ain't-the-same dept

Tue, Oct 13th 2009 9:43am — Mike Masnick

JJ passed along a short article from a week or so ago, claiming that the "outlook" for the music industry is "still grim" according to some industry insiders at a conference. Except... that's not really true. Once again, it seems like there's confusion between the recording industry and the music industry. Yes, it may be true that the outlook for selling plastic discs or downloads may not look so hot, but that's hardly everything that encompasses the music industry -- and claiming otherwise is not at all accurate. The recording industry has pushed this myth for years, and it's too bad the press continues to parrot the same line. Yet, when studies actually look beyond just selling the music directly, they find that the outlook isn't grim at all. Claiming that the outlook for the music industry is grim is like claiming that the outlook for the transportation industry is grim in 1910 because the market for horse carriages is declining.

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Filed Under: future, music, music industry, recording industry

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Ima Fish (profile), 13 Oct 2009 @ 9:48am

The music industry survived the death of the 78, the 45, the 8-track tape, the LP, the mini-disc, the cassette, the 12 single, the mini-CD single, and the cassette single. I'm pretty sure it'll survive the death of the CD too.

And even if it doesn't and the current music industry does die, a new and infinitely more efficient music industry will arise from the ashes.

The notion that all of humanity will suddenly stop creating, playing, and writing new music is simply asinine.
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ChurchHatesTucker (profile), 13 Oct 2009 @ 9:58am

Wrong title
Should be "The 'Checks For Pols From The Distributors' Outlook Is Grim"
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Hephaestus (profile), 13 Oct 2009 @ 10:02am

What do you expect ...
"The music industry outlook: still grim"

What do you expect ... its the LA times .... LA is plastic disk central ....
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thublihnk (profile), 13 Oct 2009 @ 10:03am

Speaking as someone who likes the little plastic disks and used to collect them quite fervently-- I have faith in CDs, especially for smaller acts. I can't tell you how many times one of my favorite bands has put together a nice little 'preorder package' that was an absolutely dandy RtB. I got a shirt, maybe a signed poster or maybe the liner notes were signed. Another thing I really liked was the sticking like, say, a music video on the disk that I could access via compooter. And the nice, uncompressed sound. That was cool too.

Now, I'm an ardent supporter of most of the things that are talked about on this blog, but I can't help it if I just love the stupid little plastic disks.
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Anonymous Coward, 13 Oct 2009 @ 10:06am

It's grim for songwriters. It's grim for studio musicians. It's grim for records stores (if there are any left). It's grim for record labels. It's grim for producers. It's grim for new artists trying to get ahead and get airplay.

Yup, it's not grim.

As for the article from the UK you keep using, that is a number that includes all revenue from performances. Since ticket prices have more than tripled in the UK in the last 5 years, you would think that the income for the overall performance industry would be up wildly, and it is not.

So that article isn't exactly proving much, except perhaps trying to compare apples and oranges.
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ChurchHatesTucker (profile), 13 Oct 2009 @ 10:07am

Re:
" I have faith in CDs, especially for smaller acts."

Yeah, CDs at shows are the only ones I buy anymore. I'm a big fan of fanfilms, so I tend to buy their DVDs too.

I think Mike's maxim could be reworked as CwF+EtB (Connect with Fans plus Excuse to Buy)
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John Fenderson (profile), 13 Oct 2009 @ 10:18am

This sounds a little familiar...
Thought it was worth pointing this bit out. From the article:

Topspin artists are seeing average revenue of $18 per transaction, he said -- significantly higher than what a digital download or even a full album would command.

But Lamberti also said that it's important for artists to give music away. Not all of it, necessarily, but real MP3s, not 30-second samples or free streams. Those who do have significantly more success converting listeners into paying customers, he said.

The right course is to spend time investing in the relationship between artists and fans, so that relationship can be monetized later.

Although I'd prefer he'd said "and" rather than "so" in that last sentence, at least someone gets it.
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Anonymous Coward, 13 Oct 2009 @ 10:23am

Re:
We might take you more seriously if you actually backed up your claims.

Trying to discredit someone's source doesn't make your sourceless claims any more valid.
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scarr (profile), 13 Oct 2009 @ 10:28am

I promise to save music
If everything else in the music industry somehow grinds to a halt, I promise I will keep writing, recording and distributing music, and thus save music from its otherwise inevitable end.
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fogbugzd (profile), 13 Oct 2009 @ 10:32am

Why is the CD industry entitled to exist?
If I make a product or run a store, and a new product comes along that is cheaper and better than mine, why do I have an entitlement to continue running my business? Granted, if I go out of business people won't be able to buy my product, and my suppliers will be hurt. But the public will have a different product that they prefer. It might not have as much polish or other features as my product, but once the public declares another product better then I only have two choices: innovate or become extinct. If I wait too long to innovate, then that option disappears.
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Anonymous Coward, 13 Oct 2009 @ 10:33am

Re:
"It's grim for songwriters. It's grim for studio musicians. It's grim for records stores (if there are any left). It's grim for record labels. It's grim for producers. It's grim for new artists trying to get ahead and get airplay."

It's grim for morons. It's grim for trolls. It' s grim for shills. It's grim for the ignorant.

Oh, look, I can make things true by saying them too!
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ChurchHatesTucker (profile), 13 Oct 2009 @ 10:46am

Re: Why is the CD industry entitled to exist?
"If I make a product or run a store, and a new product comes along that is cheaper and better than mine, why do I have an entitlement to continue running my business?"

Because you can buy a politician to make it so.

What, did you think this was a free market economy or something?
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Ima Fish (profile), 13 Oct 2009 @ 10:50am

Re:
"It's grim for records stores..."

FYI, the internet did not kill off record/music stores. The labels did back in the early 90s. I worked at a small mom and pop music store back in the late 80s/early 90s. Starting in the 90s big box stores such as Best Buy and Walmart were selling CDs for less than we could buy them wholesale. This was a conscious decision on the music industry's part and the internet had nothing to do with it.
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Hephaestus (profile), 13 Oct 2009 @ 11:04am

Re: What do you expect ...
Its really weird but the article could have been written by Mikes evil twin.

Now a couple points

"One factor is the proliferation of free, advertiser-supported music services, which Crupnick said are cannibalizing digital sales.".... This one statement explains the rationale behind the rush to charge web sites ever increasing fees for streaming.

"as buyers have shifted from full albums to singles, the lower prices per unit haven't prompted them to spend more on music." ... The whole "lower price" piece is total crap. iTunes now charges 1.29 per song up from .99 per song where are these lower prices.

"The right course is to spend time investing in the relationship between artists and fans, so that relationship can be monetized later." .... Okay he has been reading techdirt .....

"Rather, the underlying message was that there are promising paths for artists and labels to take." .... Artists yes Labels ... not so much
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AC, 13 Oct 2009 @ 11:07am

Re: Re:
Dang straight! That crap still pisses me off. One has to wonder if they hadn't tried so hard to kill independent music stores, would they have been able to extend their life support just a little bit longer by promoting a music community through those very same music stores?
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geekrawker, 13 Oct 2009 @ 11:20am

Plastic Media
Since the industry is so hung on plastic media, why haven't they taken steps to move to a more compact plastic media with silicone chips such as SD flash cards or other micro-drives. This could create a new industry for the music and recording industry. Surely this would help prop up there so-called declining media sales, and open doors for several manufactures to start designing new audio devices I cant be the only one who has though of this can i?

Plus, the media is so compact, its likely users will misplace or loose, generating even more sales when people need to replace there lost SD cards (not that this is a great option for the end user, but its something they could try).
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wvhillbilly (profile), 13 Oct 2009 @ 11:43am

These idiots are missing the obvious...
LICENSE FILESHARING!!!

Or maybe they're just too stubborn to change their business model.
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Anonymous Coward, 13 Oct 2009 @ 11:48am

Re: Re:
I don't have to do any research or provide backup sources, I am not running this blog. Mike is. I am just pointing out his material is flawed, or at least he is being very selective in the information he is working with and failing to point out very obvious things.

Here's is a quote that you can go look up:

"With Glastonbury festival coming up..How come the prices have gone from £58 in 1993 to £83 in 1999 to £175 in 2009? This equates to a 300% rise in ticket prices in 16 years."

For those who aren't good at conversions, that ticket price at today's exchange rate is $277US. per person.

inflation has not run at 300% in 16 years, so ticket prices have at least more than doubled net.

Double the income on concerts, you can lose the same amount in "record sales" and still break even. With concert tickets in the UK being out of control. Even comparative nobodies like Amanda Palmer are selling club sized gigs at $30 plus per ticket. Something wrong!

Basically, the price of concerts went up so much, that you can hide all sorts of horrible data in there. Mike just conveniently picks a report that happens to include the concert revenue, and tries to say there is nothing wrong in the music business. Yet, if record sales had continued and ticket prices had gone up the same amount, the music industry would be booming, not holding steady.

Using data in a misleading way, that's Mike's best skill.
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Anonymous Coward, 13 Oct 2009 @ 12:04pm

Re: Re: Re:
Why would record sales have continued? No one I know buys records anymore. They purchase singles because they are cheaper than records. I blame the recession.
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anymouse (profile), 13 Oct 2009 @ 12:32pm

Re: Shill is a bad shill
"Double the income on concerts, you can lose the same amount in "record sales" and still break even."

Should be...

Double the income on concerts, you can lose the same amount in "useless middlemen and inflated Performers salaries" and still break even."

Fixed that for you. Doesn't matter what you want to call 'losses', the fact is that overall the MUSIC industry is doing fine.
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Will, 13 Oct 2009 @ 12:36pm

music is doing fine
I can't stand when people spew the same bs about the music industry over and over again, and now on twitter as well.

Lots of other things to sell and you don't even have to tour (I don't) - like music lesson products (video lessons, dvds, sheet music/tab, music licensing, affiliate products).
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Just Another Moron in a Hurry, 13 Oct 2009 @ 1:01pm

I wonder...
I wonder if it might be easier to just agree that the Music Industry is in the dumps, but then start our own media buzz explaining that the Expanded Music Industry is doing fantastic.
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another mike (profile), 13 Oct 2009 @ 1:30pm

play us out, keyboard cat
So long as people can carry a tune in a bucket, the music industry is doing just fine. If you think your job is to sell little plastic discs, you're in the recording industry and you're boned.

I hooked a thin client up to my stereo as a head unit to stream internet radio. Soma.fm, Digitally Imported, whatever the kids are listening to these days.
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chris (profile), 13 Oct 2009 @ 1:44pm

Re: Re:
it's also grim for heroin dealers.

with no more mega starts like the rolling stones or guns n' roses how will those poor heroin dealers get paid for their art?
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chris (profile), 13 Oct 2009 @ 1:55pm

Re: These idiots are missing the obvious...
LICENSE FILESHARING!!!

Or maybe they're just too stubborn to change their business model.

i have been saying this for years. a blanket license for all media for non-commercial use. i call it "the piracy pass".
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Anonymous Coward, 13 Oct 2009 @ 2:18pm

Re: Re: Re:
So...since people are actually willing to pay for concerts, but not for plastic discs, that's a bad thing for the music industry?

I don't follow.
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Brendan (profile), 13 Oct 2009 @ 2:22pm

Re: Re: Re: (no subject, AC?)
How is this a problem? Sounds like the right direction.

The music files can be copied for free, but space in a performance venue is limited. It makes sense that those prices should go up.

Sounds like people like AP are still making good money -- just from live show tickets rather than plastic coasters.

Awesome! (Seriously)
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Anonymous Coward, 13 Oct 2009 @ 3:39pm

Re: Re: Re: Re: (no subject, AC?)
Exactly! More people are able to hear the music--> more people want to see the shows--> venues are the same size they've always been--> ticket price goes up. Inflation has nothing to do with it. It's just the size of the audience getting bigger.
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Anonymous Coward, 13 Oct 2009 @ 5:46pm

Re: Plastic Media
It is already available. Look up slot music, and the USB products are available as fan pieces.
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Anonymous Coward, 13 Oct 2009 @ 8:22pm

Re: music is doing fine
Will, I got news for you. The fine folks of techdirt want to remove your music licensing, they want your videos lessons and DVDs to be distributed for free on the pirate bay, they want lyric and sheet music sites to operate without paying fees, etc.

The reality is all the ways you listed are dependant on strong copyright and artists rights. Mike proposes to remove all of those rights from you, and wants you to get your lazy ass out to play music in front of people, because that is the only way you are going to sell the lotsssss of t-shirts you will need to move to make a living.
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Anonymous Coward, 13 Oct 2009 @ 8:24pm

Re: Re: Re: Re: (no subject, AC?)
Except the demand was already there. it isn't like there was a whole bunch of empty seats on the Madonna tour a few years back, yet this time her ticket price was 50% higher.

It's the key, they aren't selling more tickets, they are just selling them at a signficantly inflated price, to the point where the vast majority of fans can't afford to go anymore.

Can't you see the dead end coming up?
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wheatus, 13 Oct 2009 @ 8:44pm

Acrylic
The part of the music industry that writes, records and sells music on the internet is doing just fine and is finding new and interesting ways to make better product at a lower price by trimming long festering and unnecessary fat.

The part of the music industry that used to rule the day by infecting the living creators with their hateful scabies and sucking the blood of talent like tics, never bringing anything to the table but cartoon sized ego, gold pinkie rings, and acrylic hair is gonna have to go get a real job. Ignore them. Do not buy what they sell...buy indie direct only....vote with your wallets for the downfall of the old.

bbb
wheatus.com
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Anonymous Coward, 13 Oct 2009 @ 8:46pm

Re: Re: Re:
inflation has not run at 300% in 16 years, so ticket prices have at least more than doubled net.

I think you just made Mike's point for him. The "music" industry is doing great even if the "record" industry isn't.
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Anonymous Coward, 13 Oct 2009 @ 8:51pm

Re: Re: Why is the CD industry entitled to exist?
Because you can buy a politician to make it so.
What, did you think this was a free market economy or something?

So what's not free market about politicians going to the highest bidder?
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Anonymous Coward, 13 Oct 2009 @ 8:54pm

Re: Re: These idiots are missing the obvious...
i have been saying this for years. a blanket license for all media for non-commercial use. i call it "the piracy pass".

$20 per blank CD ought to just about cover it.
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Anonymous Coward, 13 Oct 2009 @ 9:26pm

Re: Re: Re: Re:
You didn't get it. Ticket prices have gone way up, not because of significantly more demand, just out of significantly more greed, and the need to make money there.

That the "music industry" in the UK isn't seeing massive increases in overall income is an indication that even with huge increases in ticket prices, they aren't really making up for what has been lost on the other side. Inflation has generally run at a few percentage points a year, so in 5 years you would expect 10 - 20% increase on the bottom line of both music sales and concert take. It didn't happen.

Read the report. Business to consumer up only 3% - business to business up 10%. What is business to business? PRS! Collections, mechanical fees, licensing, etc. The exact things that Mike wants to trash and get rid of. Remove those fees, those horrible licensing things, and the entire industry would drop 33% overnight.

So the only true growth is in licensing. Net music sales and performing are up only 3%, effectively the rate of inflation, even with hugely higher ticket prices.

Hmmm.

See the dead end yet?
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IndieByChoice, 14 Oct 2009 @ 12:55pm

Industry is changing
The music industry is not at all dead it is just changing. Record labels are becoming obsolete as artist are able to promote and sell their music themselves through social media.

The biggest fight against piracy is freeing music not locking it down.
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JD, 14 Oct 2009 @ 1:36pm

Re: Re: Re: Re: Re:
You didn't get it. Ticket prices have gone way up, not because of significantly more demand, just out of significantly more greed, and the need to make money there.

Demand has nothing to do with prices? Wow, you have now shown how truly ignorant you are of market economics. Thanks for enlightening us. With that kind of ignorance, there's not much telling what will come spewing out of your mouth next and it kind of makes replying to or even reading your further comments a waste of time. I wish you were using some unique moniker so I could avoid them.
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Anonymous Coward, 14 Oct 2009 @ 2:12pm

Re: Re: Re: Re: Re: Re:
JD, sorry, but demand in this case has nothing to do with ticket prices. Prices aren't higher because there is more demand, prices are higher because artists and their "360" management teams are attempting to make back what was lost on the other side of the deal. Prices haven't gone up because demand went up, but rather because greed went up.

If the artist / management was taking in even $1 from every recording sale, and everyone was buying rather than obtaining them illegally, there would be no greed requirement to raise ticket prices. Demand isn't the issue here at all.

You really need to pay attention to the discussion. Perhaps instead of skipping posts, you could actually read them and understand what is going on.
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Anonymous Coward, 14 Oct 2009 @ 3:53pm

Re: Re: Re: Re: Re: Re: Re:
Hint: Repeating the same claim over and over does not make it any more true. If you're going to assert that ticket prices are rising for no economic reason, find some proof.
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Silas Casual (profile), 15 Oct 2009 @ 1:24am

Performance rights
Not all bad according to this http://www.guardian.co.uk/business/2009/oct/14/music-industry-royalty-payment-revenue
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Jason, 16 Oct 2009 @ 6:10am

who cares about the "industry"
Stop worrying about the "industry" and start focusing on art’s connection to self-affirmation, health, cultural identity, and spiritual truth.
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Mozzer, 26 Oct 2009 @ 3:12am

Interesting where you find info to contradict the doom and gloom!
http://www.dailymail.co.uk/tvshowbiz/article-1222882/Cheryl-Cole-shoots-number-solo-single.html

I nteresting excerpt:

"Cheryl Cole spectacularly proved her doubters wrong yesterday - by shooting to the top of the singles chart.

She sold an astonishing 292,846 copies of Fight For This Love which instantly became the biggest-selling single of the year so far.

And it marked a turning point for the resurgent singles industry, which had been predicted to almost die out but has now been saved by internet downloads.

This year has become the biggest ever for UK singles sales because of the download market, according to music industry experts.

Recorded music body the BPI hailed the 'astonishing' transformation of the market as it was revealed that 117million singles have already been sold this year.

The Official Charts Company data showed that sales have surpassed the previous record of 115.1million, set in 2008.

The total has been reached with ten weeks of trading, including the vital Christmas period, still to go.

Geoff Taylor, BPI chief executive, said: 'We've witnessed an astonishing transformation of the UK singles market during the last six years, with digital downloads rapidly overtaking sales of CD singles and cassettes to dominate the singles scene.'"

Despite the moaning hidden in other news items you find information like this!
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