Album Sales Continue to Drop – Down 18% In May

Posted on 05. Jun, 2009 by in NEWS

shattered cd | Album Sales Continue to Drop   Down 18% In MayThis shouldn’t come as a surprise to anyone at this point, but album sales were down 17.8% in May over the same month in 2008, and 37.7% lower than May 2007. Hypebot deftly points out that Soundscan released these figures just a day before the NARM music sales convention – the largest retail convention in the industry. Not a great start to the weekend. This is bad news for the recording and music retail industries because there are still precious few within them who have truly begun exploring business models that rely less heavily on the sale of CDs and digital downloads. Maybe, just maybe this will be the kick in the pants the folks at NARM need to begin seriously discussing how they’re going to get through this.

Unfortunately, I’m not sure there’s much the retailers can do. Their business depends on a product that is becoming increasingly commoditized,  and that’s really not a great place to be. One option would be to add a ‘long tail’ to their strategy like the one Amazon.com as been successfully operating under for years. Stock your digital shelves with a diverse inventory that has something for everyone and make your money on one-offs and rarities.

As for the record labels, if the 360 deal is the best they have been able to come up they’re in big trouble. A better idea might be to develop talent that can actually put out something substantial and package it with valuable scarcities. Release singles on vinyl with worthwhile artwork and liner notes and send it out with a coupon to download the track online as well. Give the fan access to something they couldn’t have access to without purchasing the music – give them a reason to buy something that you know they have come to expect for free.

Independent artists should take heart, though. The upheaval that is going on at the top of the music industries doesn’t have to hinder you from being successful. Note that these sales figures are from Soundscan – most albums sold at concerts and gigs don’t show up on the Soundscan reports. Especially albums being sold by independent artists. Independent artists have the freedom to create business models that work for wherever the market is at any given time. Find out what your fans want and give it to them. ‘Part Two’ of Why Free Music was Inevitable will include seven major categories related to adding value (and revenue streams) to your business model, so make sure you check back soon.

It’s not all doom and gloom – the music industry as we know it is being shaken up, but music will outlast the chaos.

Share it if you like it:
  • Twitter
  • StumbleUpon
  • Digg
  • del.icio.us
  • Facebook
  • Technorati
  • email
  • LinkedIn
  • Google Bookmarks
  • Netvibes
  • MySpace
  • FriendFeed
  • Tumblr
  • Posterous

Tags: , , , , , ,

6 Responses to “Album Sales Continue to Drop – Down 18% In May”

  1. Eugenia

    05. Jun, 2009

    As I replied on your tweet, I believe that artists should write fewer, but catchier songs. They can certainly write more if they feel creative, but they shouldn’t expect to be able to sell most of them. This comment might sound off topic, but it’s not. Please allow me to explain:

    If I am any similar to most consumers, I skip most songs on my iPod that are not great but simply happen to belong to an album. This is the norm for me. iTunes song-by-song selling has liberated me personally, as a listener. Some times I buy whole albums just because my husband wants them, or because I think they are all good, or because they are on sale, or because I want to support the band. But that doesn’t mean that I enjoy all songs that are in there.

    There are of course some bands or artists that DO have albums where I enjoy all songs in them: e.g. the LA electro-pop/rock band “Malbec” are one of these bands (check them out, their 5 newest EPs are free for download). Some of Madonna’s albums are the same too. A Bay Area hard rock band, “Drist”, are like that too. The “Crash Moderns” too.

    But these are just exceptions. Most of the artists don’t have a consistent quality throughout an album. For example, I only like 4-5 songs out of the new Green Day album that has so many songs in it (many more than the usual 10).

    So based on all that, and considering that iTunes has liberated our purchasing habits to be able to buy individual songs, it makes sense for CD albums sales to go down. I am pretty sure that digital sales are up, something that Soundscan forgets to add to the mix maybe?

  2. refe

    05. Jun, 2009

    As far as I know the Soundscan numbers do include digital sales. Your point still stands, though. Track by track downloading has certainly had an effect on overall revenue. This was why the record labels phased out the vinyl single way back when. They understood if you packaged a good single with seven other songs – regardless of their quality – you could sell eight songs on the marketing budget of one. iTunes (and Napster before it) undermined that strategy and gave the listener back more control over what they purchased. Now the record industry is wondering how to make that revenue up. My question is – should we feel sorry for an industry that built it’s business model on a bait and switch.

    One caveat though: just because a song doesn’t work as a single doesn’t mean it isn’t a good song. A song can be very good, or beautiful, or haunting – but not necessarily catchy. That is something we miss in the iTunes world, and why a truly great album is still worth purchasing.

    If you want to know a little bit more about my thoughts on what the quality, quantity and frequency of a bands releases should be you can hop over here.

  3. Eugenia

    05. Jun, 2009

    >A song can be very good, or beautiful, or haunting – but not necessarily catchy.

    I agree, but most of the songs, on most albums, are just blunt. Let’s take a popular album: Muse’s “Black holes and revelations”. Out of the 11 songs, I really like 2 of them, and I kinda like 4 more. The rest 5, I always skip. And this is a highly acclaimed award-winning album we are talking about.

    Of course, there will be Muse fans who will argue that they love the whole album (e.g. my husband), but I am sure that the majority of this album’s purchasers do skip songs.

    Take that now to the lower level of quality that the majority of bands have in our over-saturated music market, and you will see that quickly, the “5 good songs out of 10 album songs” ratio becomes 1/10. Therefore, these guys will be unable to sell full albums in these iTunes song-by-song days we are living in, and they won’t be able to feed themselves (if their sole revenue is based on music sales). They need fewer songs, and they need better songs. In other words, they will have to spend more time writing and perfecting a song than they used to do so before. It will have to become almost engineering (and some music algorithmic software that can generate melodies that humans find enjoyable might help).

    “Liga kai kala”, we say in Greece, meaning “few, but good”.

    And honestly, I do believe that the music market is oversaturated by wannabes. Nobody can make a profit in this sea of mostly-bad artists who simply use the now-cheap tools to do music. Neither the good artist, or the bad artist. Hopefully, with the upcoming destruction of the Big-4 labels, some of these wannabe artists do come into their right mind and get another job and leave the music to the ones who can do it well.

  4. Ted Hurlbut

    13. Jun, 2009

    Clearly, music retailing continues to be a declining business, but it remains a business if you can get the store right. Ultimately, the store must be built around a lifestyle of which music is only a part of the assortment. The buzz has to be developed around the experience within the store. Because the lifestyle and experience are focused on a narrowly focused customer, assortments are likely to be narrower than in a music driven retailer.

  5. refe

    13. Jun, 2009

    Or the opposite – huge retailers like Amazon who carry everything, which happens to include music. The draw being the fact that it’s comprehensive and cheap, rather than lifestyle and experience. They don’t need to worry about music sales because they have the relative safety net of numerous diverse revenue streams.

    I will say this though – I’d rather shop at the store you described than at Amazon.com.

  6. [...] Labels are doomed because “their business depends on a product that is becoming increasingly commoditized.” Why buy music when you could download or stream it for free? I too am shamefully guilty of being a [...]