globeandmail.com: Music downloads in downward trend — While the music industry will blame this on piracy I think it goes deeper — to the heart of the business. There is virtually no way for most buyers to hear new music that they may want to purchase since the consolidation of the radio industry. Blame the FCC for allowing this.
Mr. Bernoff questions whether consumers are reaching their saturation level for music downloads. He found that iTunes’ rapid expansion rate has slowed. The service grew sevenfold between April, 2004, and January, 2006, but since then the number of transactions has dropped by 58 per cent.
The downward trend is not limited to iTunes, which, according to Apple, accounts for 88 per cent of music purchased off the Web in the United States. Sales of all music downloads in the U.S. have stalled in the second half of the year, falling from 144 million tracks in the first quarter to 137 million in each of the second and third quarters, according to Nielsen SoundScan, which tracks industry figures.
The trend is unwelcome news for the industry. Illegal downloads have chiselled billions of dollars out of the music industry’s revenue base over the last six years. In the U.S. alone, annual sales were down 23 per cent between 1999 and 2005 to $11.2-billion, according to the Recording Industry Association of America (RIAA).
The sword that the Major labels and the mega-consolidated radio brands have apparently chosen to fall on is this model of manufacturing big “talent”, and then essentially using a payola scheme to get said “talent” played. They are willing to protect this system at all costs and of course it is folly. The quality of music played on the radio has declined to tragic lows.
That doesn’t mean that there isn’t any great music being made anymore. It’s just for the most part not being played on the radio. So as a distribution model of quality music, radio really is no longer a viable option for people who want variety and quality in their music.
We now have made a division. People who really care about music, and those who don’t. The latter are still listening to radio, the former, they’re not listening to the radio and they are for some magical reason finding and listening to more music then they ever have.
People who really care about music go out of their way to find it. When you are looking for something these days, where is it that you generally go? Yeah, we’re here now (the internet) and it’s actually a much more effective tool than radio to find what it is you’re looking for. Between amazon.com style “if you liked this, then you may like this”, to fairly sophisticated systems built into iTunes and eMusic, music lovers are finding more of what they want.
Sounds great. It sounds as though we have found the music utopia right here on the internet. There are in my mind really two major roadblocks that are keeping this from really blowing up: DRM, and quality or lack thereof.
I think whoever figures out a way to get decent talent out there in a non DRM high quality format and on a large scale may really have a shot to make some decent waves (eMusic is a good example of this). It will be the major label that decides to set their entire catalog free (maybe in conjunction with an already established site like eMusic) that could really make this model work.
The labels need to accept the fact that some of their IP is going to be stolen. Forget about it and please just move on. Embrace the people who truly love your product, don’t punish them. If you have something of value people will buy it, it’s a fact. To diminish the value on purpose is stupid and I hope soon they realize this.
I go with the quality of music.
Don’t give me this “if you like Pink Floyd you’ll like these guys” crap. They aren’t Pink Floyd !!! Or the Beatles, Led Zeppelin, The Byrds, or any other top group. They might be wannabes, but they ain’t the real thing.
Maybe if the radio played a better variety of music, I would get to enjoy these new artists.
#14 – Costco and Sam’s discount CDs also, but the selection is relatively limited.
If by discount, you mean full price… But if you look at the number of titles available, its fair to say that statistically, they don’t sell CDs at all.
Good music is almost impossible to locate from big box stores.
Where would be if you needed to count on Wal mart to by The Arcade Fire or the Yeah Yeah Yeahs…?
I read the article that DU is discussing, finding that I fit the described iPod buyer. I have a CD collection, I have bought a few DRM songs, and I download free songs offered at the iTunes store. I don’t listen to as much music as I did at first, opting instead for Podcasts (when walking to reach my minimalist exercise requirements). CNet’s Buzz Out Loud is a favourite and the HDTV Podcast featuring the HT guys, Ara Derderian and Braden Russell, is another one I listen to. CNet Buzz Out Loud must have changed their encoding a week or so ago, and my battery died. It was just Buzz Out Loud that taxed my iPod. Now I listen to an iPod Shuffle and carry the old iPod in case the Shuffle battery dies. My introduction to Podcasts was TWiT with John C. Dvorak and host Leo Laporte. I still like TWiT and watch John C. Dvorak on Cranky Geeks. I may never have found Buzz Out Loud had the hosts not been promoted on Cranky Geeks. Years ago, I was quite annoyed that ZDNet and CNet were joining and I didn’t think the juncture would result in improved news and commentary. The web sites have suffered, but I love the Podcasts. Regarding satellite radio, I hear good things, but as long as I can import my CD’s into iTunes, I don’t see enough benefit to subscribe to radio.
#16 & #22 – Exactly right
Most of what I listen to is 15 years old or more. I’d buy more CDs of there were any that had anything I wanted to hear.
#23 – good point too. Even if you’re trying to recreate your old LP (gawd I’m old) collection – you have to go online to find them.
I have been an XM subscriber for over four years now, and when I find myself dancing in the driver’s seat, I just hit the memory button. The unit saves the song info and when I get home again I download it from iTunes or wherever I can find it. In this way, I buy only music that I really enjoy. I know that a lot of your contributors say the audio quality is poor, but without an o’scope to check it, I honestly can’t tell the difference, and I suspect that most people, despite what they say, couldn’t either. I then mix and match and burn my own MP3 CDs. I would suggest, though, that everybody who has issues with DRM and other RIAA-type evils take it up with their elected representatives. Get involved or quitcherbitchin’.
I’m with all the CD folks here. I’ve never purchased an mp3 and hopefully never will. I know I’m one of those rare people that actually care about the quality of the recording. I completely can tell in my car and my home audio if it’s a cd or something compressed. It seems we’re a dying breed. What is strange to me is video quality is going up and music listening quality is going in reverse… strange.
I was initially oblivious to the DRM issue. Three years ago I had a new sparkly iPod, and an iTunes account, and went shopping. Now I’m on my third Mac since then (same iPod though), and have used iPod Rip to transfer between machines.
But when I look at the list of music I’ve bought, the DRM issue suddenly looms. What if my Mac and iPod both get stolen? With CDs I could have a fair go at claiming this from my insurers, but I’ve little chance of this for purely digital stuff. And I know that I should be doing backups . . .
The fact is that most ‘accidental’ owners of intellectual property (i.e. those who’ve grown it on the back of their main business – universities, the music industry, and er . . . .) tend to over value it. So they do everything they can to lock it down solid. What this does is ensure that they end up with 100% of the sales.
But the way this is headed, that’s 100% of nothing!
JCD’s observation that sales may be linked to radio might also be correct. One of the major flaws with iTunes is the 30 second preview. Too often it seems to be a random snippet from a song, which is only useful of you already know the song and just wanted reminding of it before you buy. Much better are sites like , where at least you get to listen to the whole track (and sometimes watch the video too . . .)
This is rather obvious. People are starting to question why they are bending over backwards to support the music monopoly, when they can purchase non-DRM music directly from the artists, with that money actually going to the artists. This is the power of music podcasts at work.
Years ago when CD players were introduced, consumers rushed out to buy new music libraries. Clearly, the iPod is not having the same effect on content, he said.
I need an expert to tell me this?
Did any of the “experts” really expect people to buy 128kbps versions of songs we already have on CD???
After analyzing thousands of credit and debit card transactions over a two-year period, …
Always nice to get confirmation that is going on, isn’t it?
…Mr. Bernoff found that Apple has historically been able to sell only 20 songs on average for each iPod device sold.
I fit in that demographic.
My Mac’s iTunes library has a little over 20Gb in it, and I still have ~$13.00 left my 2nd $20.00 pre-paid iTunes card.
Must be something to do with those 200+ CDs I own.
And besides, who cares about selling music downloads… when there is the expanding market in selling video downloads!
#26 I have been an XM subscriber for over four years now, and when I find myself dancing in the driver’s seat, I just hit the memory button.
That’s fine, but we’d all prefer that you pulled over to the side of the road until this irrational fit of dancing was over.
And we thought cell phones were dangerous
I still refer to my music player as my HiFi.. My music is on everything from 78′s to CD. I don’t have an ipod, there are other things to think about as I go through life, without hopping around like a fool with some horrible noise in my ears. If they want to bring up record sales, then find a few performers who can make music, not noise…
#32 – you can find quite a few performers who can make something other than noise… a few thousand or more in just that past year or so… You just have to look past corporate radio and into the indie scene.