Every now and then I pull my head out of the studio gopher-hole and try to get a sense of what’s going in the Music Industry, this usually involves a series of good news/bad news realizations and discoveries. Lets start with the bad news for people making a living out of the conventional means of selling, recording or producing recorded music.
Its become painfully obvious that the big record companies, the traditional bank rollers of the industry are heading towards zombiedom. They became living dead companies some time around 1999 with the rise of Napster. A decade later they are like a herd of stumbling corpses, each with an apple going to seed in its brain, being feasted upon by cute little web 2.0 maggots and venture capital vultures. Sure the industry is at least partially responsible for its own downfall, but I think that a lot of what is going on as picking clean the bones of a once thriving industry. An industry that despite all its bad points, up ’till now has financed and enabled the majority of popular recorded music that we know and love for…hmm…Lets see…. the entire history of recorded music? Its sad, but in a death of the dinosaurs kinda way. Only the dinosaurs are zombies and still walking around suing people. Enough mangled metaphors, how about some figures?
The chart below (made by Michael DeGusta) really bought this home for me. It uses U.S. numbers from the RIAA, but the numbers for Australia are similar. What is useful about this chart is that it conveniently shows 2010 US dollars spent on music per person in the states or the last 30 years.
Image: Recording Industry Association of America
From a high of $71 per person per year in 1999, its down to $26 in 2009. This is not a subtle slide. Digital sales will not be pushing sales up to anywhere near the dizzy heights of 1999 or 1976, its already obvious that they are not revitalizing the industry like the CD did with its introduction. So big labels are becoming less and less profitable, losing money every year, shedding staff, dropping artists and losing customers.
Surely this means that the independent artist and small labels are in the perfect position to take advantage of digital sales? Nope. I’d argue that in fact the next wave of streaming or subscription services will mean the just the opposite. Another chart for your edification, this time from informationisbeautiful.
Bear in mind that the numbers are certainly not perfect in this chart, mainly due to the difficulty in accounting for streaming income. But instead of selling 143 CDs a month to make a US minimum wage – under the newest, coolest, hippest, web 2.0est streaming service spotify (not availabe in Oz)- you need over 4 million plays a month.
4 million plays. Does that sound achievable to you? Surely if you are say…. Lady Gaga ….you can do this and more? Perhaps not. In five months, over a million plays for her single ‘Poker Face’ on spotify netted her the meager sum of $167 USD.
Am I being needlessly pessimistic? And what about the good news?