Monday, March 07, 2011

Is Piracy Really Killing The Music Industry?

From Torrent Freak.
With the growing popularity of the Internet, computers and most importantly MP3-players, music fans have started to trade in their CDs for MP3s and other digital files. Initially, the public had to convert CDs themselves, but in 2003 the iTunes store opened, selling over a million tracks in the first week.

With this shift from physical to digital, another important change hit the industry, one that may in part explain why the labels’ revenues in the U.S. continued to decline. With the introduction of paid downloads, consumers no longer had to buy a full album if they were only interested in two or three songs. This new freedom for consumers has dramatically changed the music sales landscape.

According to statistics taken from the RIAA shipment database, between 2004 and 2008 the number of single tracks sold in the U.S. increased by 669 percent while the number of album sales dropped 42 percent. Consequently, the income of the big labels suffered since single track sales are less profitable than full albums. As can be seen in the chart below, the number of music ‘units’ sold continues to grow rapidly nonetheless.

In other words, just as has happened in the past, new technology is replacing old technology (vinyl gives way to cassette, cassette to CD, CD to mp3). Consumers of music are taking advantage of the new options by substituting albums with cheaper and more convenient singles. So the message to the recording industry: stop releasing garbage albums with some (also likely shitty) popular singles. If you want people to pay for an album, make an album worth paying for.

Meanwhile, independent musicians, who in general seem far more friendly to piracy, do tend to produce albums, not singles. Besides the tendency of independent artists to take pride in producing top quality work, singles are less of a selling point when there is minimal access to exposure.