Tag Archives: Music Sales

Why You Should Release and Promote Your Music on iTunes

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The new buzz seems to be that independent artists shouldn’t release and/or promote their music on iTunes.

The argument is that iTunes is the Walmart of digital music, and you wouldn’t point your fans in the direction on Walmart to buy your record. You’d send them to an independent record shop.

Furthermore, the argument goes that iTunes keeps 30% of the retail price where other retailers, such as CD baby, keep 9% to 15%. So it makes better sense to keep fans away from iTunes.

Now as I’ve written before, I’m no fan of iTunes. There’s a real risk that they’ll end up being the only online music retailer. But for independent musicians, it’s necessary to have your music on iTunes, and let your fans know about it.

Firstly, a lot of people have iPhones. If you’ve ever been through the process of trying to get non-iTunes purchased music onto an iPhone, then you’ll understand what I mean.

Secondly, the fact that iTunes is so big means that there’s a certain credibility in having your music on there. Whilst anyone can get there music onto CD Baby, it’s much more straight forward than getting your music onto iTunes. Therefore, it adds the impression of credibility and authenticity.

Thirdly, sites like CDBaby are still big businesses. Sure, they make more effort at promoting independent music, but let’s not forget that they’re still in the business of making money. Avoiding one company because it’s a “billionaire corporation”, but promoting a millionaire corporation, doesn’t make much sense.

So what should independent artists do?

Firstly, let fans know all the places they can buy your music from. Have links to iTunes, Amazon, CDBaby, etc.

Secondly, iTunes charges more for albums – let your fans know this. If they still want to use iTunes and pay the premium, well good for them.

Thirdly, try push fans to physical copies. The profit margin is about the same and it gives fans more bang for their buck. Tell them which record stores they can buy your record from, and furthermore, set up your own online store.

Avoiding  iTunes as an artist is reckless. But having it be the only place you sell your music from is just plain stupid. After all, your an independent artist. You’re not locked into any contracts, so why act like you have only one option. So don’t stop using iTunes, but make sure you explore all possibilities for selling your music online.

 

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Music Sales and the Future of the Industry

In what is becoming as predictable as a new years day hangover, the start of 2015 has also seen the announcement of  a decline in music sales for 2014.

According to Billboard, Nielson’s 2014 music sales review is reporting a 11.2% drop in album sales and a 12.5% decline in single sales.

The report did not comment of the total decline of CD and digital sales, but it did note the 51.8% increase in vinyl sales, although this only accounts for 3.6% of the entire music market.

The report is however focusing on the 54% increase in demand for streaming services, a figure that is likely understated as it doesn’t includes non-interactive services such as Pandora. This figure is apparently the equivalent to an extra 56.1 million album sales, making it larger than the decline in physical and digital units.

The troubling thing is that whilst Billboard are suggesting this increase in demand is moving record labels back toward profit making status, it is seemingly at the expense of artists. Whilst Pharrall’s Happy  was the highest selling single with 6.41 million units sold, it has been previously reported that 43 million plays of Happy on Pandora translated into only $US2700 for Pharrall.

It’s also difficult to quantify units streamed as an equivalent to sales. Whilst some use streaming services instead of purchasing albums, many treat these services like a radio station – they simply consume what is aggregated for them, and would never have purchased this music otherwise. And whilst these services can be a handy tool for discovering new music, there is little evidence to suggest that this is actually occurs for most users.

The other concerning element is that music steaming isn’t as cheap as it initially seems. Whilst the subscription price is reasonable, only $12 per month for Spotify, data usage still needs to be seen as an expense. Mobile data expense and limitations means that streaming outside the home could be prohibitive. There is also ramifications for music consumers who find themselves on the wrong side of the digital divide. The last thing the music industry needs is for music consumption to become an elitist pursuit.

Overall it seems the music industry is still in a state of limbo. No one seems to know when or how this will be gotten out of. Yet the artists keep writing and performing the same as it ever was. If streaming is the way out, it seems it will be at the expense of artists. But then this inequality has been documented time and time again over the industry’s 110+ year history. Let hope though that music consumers are not left worse off.

 


$1 Albums: The Future of Music?

By now you’ve possibly heard about Canadian metal band, Exes for Eyes, who are offering their new album for $1 in the hope that it will take them platinum.

Citing Taylor Swift as the only artist of 2014 to have gone platinum, and noting that as completely independent artists they don’t have the overheads of major labels, they’re logic involves passing these savings onto music fans.

But will this work? Whilst they’re logic is solid and falls neatly into the principle that lower costs should equate to a lower retail price, a higher retail price often adds to the perception of quality (also known as perceived value). By offering their album for $1 are they actually commenting on the quality of their album? By using this pricing point, are they stating that the quality of their album is inferior to that of major labels?

Furthermore, what happens if this does work? Whilst the record industry is currently struggling to find their perfect price point, will this lead to releases from new artist being priced lower than their more experienced colleagues? Discounting is one thing that the record industry has not been happy with over the last few years. A successful outcome could lead to price differentiation in terms of experience and previous album sales.

This would ultimately leave other new and independent artists with no choice but to price their albums competitively. Whilst this may encourage sales in the short term, it inevitably leaves those who have always seen a smaller cut of music sales with even smaller margins. And whilst Exes for Eyes are correct in that there are less people to pay on independent releases, a greater proportion of independent profit is reinvested into new releases. Lower profit margins will mean less independent releases.

In the end it will be interesting to see if Exes for Eyes achieve their platinum ambitions. Regardless, the fact that I’m writing about this previously unknown band means that they have in some way benefited from this strategy. But the future will tell whether this is simply an online stunt for publicity, or a future business model for major and independent labels alike.


History Says the Most Portable Music Format is King

40 Years of Music Sales

40 Years of Music Sales – Click Image to See Moving GIF

Digital music news has compiled this fantastic infographic showing how music sales have constantly and rapidly changed over the last 40 years. The most interesting thing I observe is that portability has always been at the forefront of people’s minds, when deciding which format they will make their next music purchase on.

Looking that the graphic data and we see that from 1973-1977 the 8-track represented around 25% of market share. The 8 track’s target market was automobiles as it gave consumers the portability of music in their car. Then in 1978, 8-track market share decline rapidly and in almost direct correlation to increases in cassette. Obviously cassettes have similar degree of portability with regard to cars. Perhaps this sudden shift represents car manufacturers beginning to install cassette decks into cars in much higher volume.

We don’t really see any notable decline in vinyl sales until 1982 when the 8-track had moved to a measly 1% of market share. It is here that we first see the cassette begin to eat into the vinyl LPs market share. This period of time coincides with a major development in music portability, the Walkman, which was first released to the American public in 1979. Is it possible that consumers were thinking of this added layer of portability when choosing between vinyl or cassette?

Moving onto CDs and we can see that initially, between 1984 and 1989 they only eat into the market share of the vinyl LP. Cassettes remain at about 50% market share until 1990, at which point the vinyl LP represented only 1% of the market; sound familiar? At this same time due to advances in battery and anti-skip technology, portable and car CD players were beginning to surface. So was portability again influencing the purchasing decision of music fans?

Now between 1990 and 2002 we see CD sales grow to a point of 95% of market share. Then in 2003, we witness their first decline. Whilst this is still minor, less than 1% in fact, it’s hard to ignore that 2003 was when Apple launched iTunes and by June 2003 had sold their millionth iPod. In the ten years since, we have witnessed a rapid decline in CD market share to the point where in 2012 they only represent 35% of market share.

Looking at 2012 and there are now more formats now than ever. If we combine the most portable formats; download single, download album, sound exchange, mobile, and subscription & streaming, their total market share is 57%. As a whole, these formats have grown rapidly at the expense of the CD. Interestingly though, subscription and streaming growth since 2009 seems to be directly at the expense of mobile. One wonders that as mobile data services improve, if subscription and streaming services like Spotify will move into the market share of the digital album and digital single? It is after all just as portable, but no need for syncing and no nasty end-of-month credit card bills; just a single flat fee.