Goodbye album format?

[Nano]

From RollingStone.com:

Music Biz Laments "Worst Year Ever"

Labels' woes continue as album sales drop seven percent, while digital single sales surge It was yet another unhappy New Year for the music industry: Despite hits by Mariah Carey, 50 Cent and Green Day, 2005 saw album sales drop 7.2 percent as labels continued to struggle with adapting to the age of the iPod and the Internet. Overall, consumers bought 48 million fewer albums than in 2004, marking a disastrous twenty-one percent slide from the industry's peak in 2000, according to Nielsen SoundScan. And the holiday season, which typically accounts for forty percent of annual sales, was a bust. "It was arguably the worst in the music business's history," says Steve Bartels, Island Records president.
In contrast to CD sales, digital-song downloads jumped 150 percent in 2005 as consumers bought 352 million of them. "With digital technology, everyone's figured out that a business built only on the manufacture, distribution and sale of CDs has ended," says Dixie Chicks manager Simon Renshaw, echoing many other industry veterans. "The traditional model can't continue."

Where Are the Hits?

In 2000, the industry's last boom year, the top five albums -- including megahits by Britney Spears and Eminem -- sold a combined 38 million copies. The top five in 2005 sold just 19.7 million. Mariah Carey had the comeback story of the year, selling 5 million copies of The Emancipation of Mimi, the year's top album. Green Day, who sold 1.8 million copies of American Idiot in '04, sold 3.4 million more in '05. And a baby diva, American Idol winner Kelly Clarkson, broke through, selling 3.5 million copies of Breakaway.

Just below the top ten, there were signs of hope, as developing artists -- Ciara, Young Jeezy, Fall Out Boy -- all sold at least 1 million copies. But expected best sellers from Missy Elliott and Santana barely broke 500,000 copies. "Last year you had releases from superstars such as U2, Eminem, Lil Jon," says Best Buy music buyer Lon Lindeland. "This year didn't match that."

Latin music was the only genre to see increased sales in 2005. As the reggaeton-heavy "hurban" radio format grew -- taking over rock stations in several major markets -- the genre's sales leaped 12.6 percent. Sales of alternative rock fell 8.8 percent, hip-hop dropped 7.8 percent and R&B saw an 11.6 percent decline. "Consumers who used to buy a lot of hip-hop are now buying Latin records," says Virgin exec Jerry Suarez. "It's something for the younger demographic to get excited about."

Digital Music Surges

In 2005, digital downloads became a major moneymaker for the first time, earning more than $500 million as sales of digital tracks jumped from 141 million in 2004 to 353 million in 2005, and sales of digital albums rose from 5.5 million to 16.2 million. In the fall, Apple's iTunes Store became one of the ten biggest U.S. music retailers, ahead of Tower and Sam Goody. And in the last week of 2005, digital single sales exploded to a record-setting 19.9 million -- outselling CDs for the first time in history -- as about 11 million Christmas-gift iPods flew off shelves. The digital boom helped offset some of the labels' losses; using SoundScan's formula of counting every ten sold singles as an album, album sales dropped just 3.9 percent.

Ring tones were even more profitable, as revenues doubled to $600 million. Real tones -- actual music rather than tinny reproductions -- became the dominant format.

But as sales shift toward digital distribution, battles are brewing over how much downloads should cost, and who should get the money. Apple CEO Steve Jobs called the labels "greedy" for suggesting iTunes should charge more than ninety-nine cents for hits; Warner Music Group CEO Edgar Bronfman Jr. shot back, "We want, and will insist upon having, variable pricing." Artists, meanwhile, complain that their royalties from digital tracks -- fourteen cents is the typical rate -- don't make up for the loss of income from CD sales. "This is where the sales are going," says Josh Grier, a music lawyer for Wilco. "But being part of the transition might be a bad thing."

Major-Label Woes

As the industry contracted, market share declined or remained steady for three of the four major record companies. The exception was Universal Music Group, which sold thirty-two percent of all music and six of the year's top ten albums. Warner, which became the first publicly traded record label in 2005, managed to hold steady, thanks to Green Day and the Asylum subsidiary, which scored hits with Houston rappers Paul Wall and Mike Jones. EMI dropped just 0.4 percent, with strong releases from Coldplay and Gorillaz. "It's not a growth market," says Arista exec Tom Corson. "This is a mature market that's being attacked on all sides."

Of all the labels, Sony BMG -- which merged in 2004 -- had the toughest year: The company's market share shrunk three percent, it paid $10 million to settle a payola investigation (Warner eventually settled for $5 million) and had to recall 4.7 million CDs that included invasive copy-protection software. "How does a record label self-destruct?" says Darryl Pitt, manager of the Bad Plus, whose CD was recalled. "This is a pretty good way."

The labels continued to battle piracy, filing hundreds of lawsuits against peer-to-peer downloaders. But in the month of November, for instance, twenty-one percent more users traded music online than in the same period the year before.

The Indie Scene

As the majors stumbled, independent labels gained market share, accounting for eighteen percent of CD sales in '05. Indie labels proved especially adept at Internet marketing via outlets like MySpace; the emo label Victory Records sold 558,000 copies of Hawthorne Heights' album The Silence in Black and White without radio play. And several hip indie acts -- the Arcade Fire, Interpol and Bright Eyes -- sold more than 250,000 copies each. The indie model of earning profits on a broad range of small-scale releases, rather than focusing on blockbusters, may offer a new direction for the majors. "The major labels want to say the glass is half full," says Gwen Stefani's manager Jim Guerinot. "I think everybody's getting the message: You better get a fucking smaller glass. The music business is a different game."

BRIAN HIATT AND EVAN SERPICK

Posted Jan 13, 2006 1:51 PM

[remicks]

*****

Thanks for posting this Nano.

Your question in your subject title is provocative.

Maybe the traditional routine of artists offering a multiple-tune project as one compilation will quickly fade out (entirely?) as the trend to pursue just specific songs continues . Makes sense as people now create their own playlists and have less patience / less need to listen thru entire albums .
Most interesting.

*****

[QUINNY]

This is both menacing and frightening.

Question 1: Should the artist, or the listener have the control over the delivery of product? If the latter is true, then music has become a commodity with little intrinsic value of its own.

Question 2: Is the unwillingness of today's music fan to buy whole albums merely a sign of the times or the driving force behind it all. In other words, is music simply less appealing because of the overall quality of it , or has it being hugely downgraded in the public's psyche and demoted as a spiritual/emotive need? As someone who has always enjoyed individual tracks more than albums I guess I shouldn't be shocked, but I am.

Question 3: Why are the indies so fucking pleased with themselves? They'll face the same kind of problems as the majors face now, at some point in their development. Are they too dumb to realise what's really going on? Are they the very reason why music is facing the crisis that it is now facing? After all is said and done, it is the release of countless indy bands to small niche markets that's diminished (a) the overall quality of music being released and (b) lead to this current state of affairs where music no longer has any real hold over the population. Some may argue that's not a bad thing, but as a music lover I'm really not too pleased. I believe in music's power to do a whole multitude of things, like no other artform. Traditionally, part of its power has been the ability to sell millions of one title, thus defining popular culture at any one time and uniting large parts of the world's population in a common cause. With the current fragmentation that has all but disappeared. End game will be that within the arts world, no-one will believe they have anything in common with anyone else. Is that a good thing? Does it leave a vacumn to be filled with ,say, jingoism. Are less spiritually fulfilled people less, or more likely to want to nuke their neighbours?

Maybe music has no place in the future. I hope I'm proved wrong.

[Nano]

Hi Quinny. Regarding your Question 3, I think music is never gonna end, it only will be listened in other ways. Music was always part of our culture, even when there was no music industry whatsoever (think of Charles Ingalls playing the violin for kicks, for example).
What the development of the industry as we now know it permitted was to add/develop a great degree of sophistication to any kind of "popular music" form. In 40 years, we passed from Ruth Brown's early cries to Marvin Gaye's sweet soul symphonies to Erykah Badu's almost-academic blending of styles and schools. Same with tango, blues, samba, French chanson, electronic music, you name it.
Obviously, the creaks in the industry's building make us fear the loss of all that developments.
For me, looking at the beginning of the album format is a good way to see things in perspective. In the late Forties, the idea behind the "long play" record was to feature longer pieces of recording, specially classical music (a symphony didn't fit in a 78RPM disc). And the labels started using the format that way. Then, someone came with the idea of re-releasing old 78RPM records of popular artists, putting them together in a LP and creating both the "album" as we know it today and the "compilation" of different artists of a label (thought as a self-promoting trick). It's amazing how these marketing ideas evolved into what the music is today. Of course, the concept of "filler" started shortly after that! :P So these changes work for the good and the bad, and usually in ways nobody thought of in the first place.
So... I'm trying to be optimistic and open to what the future brings us.

[jam master jay]

Part of the problem of course, is the record industry's refusal to give people what they want - which is cheap, convenient downloads of music libraries. I'll pay for this, just give me a place to do so. Instead, they fight this technology every step of the way, and even make customers who want this feel like criminals.

I used to buy tons of albums back in the day, Then, I bought tons of CD's, until it became obvious that I liked my music library to be more portable, and take up less space. Last year, if I bought 6 CD's, that was a lot.

[DiscoMan]

And a large part of the product is absolutely fucking terrible!
As a consumer of recorded music sell me a product I can buy!
I don't want to listen to 20 and 30 year old music all the time but let's face it - what is peddled today as "music" is horrible!