Saturday, November 3, 2007

music industry status report

While music-industry sales have plummeted, no genre has fallen harder than rap music. According to the music trade publication Billboard, rap sales have dropped 44% since 2000 and declined from 13% of all music sales to 10%. So it's not just ironic that hip-hop is being censured and dissected at the very moment when the genre has become most commercially immaterial -- its public critique might be the best thing rap has going for it.

The democratization of production - anyone with a laptop, a microphone and a few programs can record a near studio-quality record - and, of course, the plethora of free downloads mean that while anything is possible, nothing is profitable. Today, most musicians can't count on selling records to make a living. Artist rely heavinly on social networking sites like MySpace, Facebook and YouTube to promote themselves.

Reports of the demise of the recording industry are everywhere: According to Nielsen SoundScan, the 10 best-selling albums in the United States sold a combined 60 million copies in 2000; in 2006, it was down to 25 million. U.S. consumers bought 785.1 million albums in 2000; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums). More than 5,000 record label employees have been laid off since 2000. In 2006, the iconic Tower Records shut its doors and parent company, Music land, of the favorite mall store Sam Goody, filed for bankruptcy. Major labels have cut their band stables by a third, Recording Industry Association of America CEO Mitch Bainwol told Rolling Stone earlier this year.

2006 was the worst year for "hit albums" since 1990 with the precipitous decline in gold, platinum, multiplatinum albums (that's 500,000, 1,000,00 and 1-10 million units sold). The RIAA database says in 2006, it issued 406 Gold, Platinum and Multi-Platinum albums, which makes it the worst year since 1990.

Also, RIAA stats say that total Digital PLUS Physical music sales went UP 21.6% from 2005 to 2006 (value dropped 6.2%).

Note that at least three things are killing the blockbuster album, beside the decline of the hit across our culture:
1) the overall malaise of the music industry
2) a shift from albums to singles online
3) the decline of Top 40 radio, which is the main marketing vehicle for hits.

Artists are looking for non-conventional vehicles to to sustain their careers.

Music will be around forever, but everyone in the industry are all dazed and confused on where the future lies as a business model.

source [Long Tail], [Time] and me

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