So last week Business Insider posted the following chart:
http://www.businessinsider.com/chart-of-the-day-music-industry-sales-2011-2which seemed to indicate that the profitable nature of the CD age was an anomaly and now things have had a correction and are back on track, so the RIAA can shut its whiny derp derp ass up.
However, apparently the guy who made the original chart was a pretty shit analyst who just translated raw data into a chart without taking into account anything that would make the data useful.
In this article:
http://www.businessinsider.com/these-charts-explain-the-real-death-of-the-music-industry-2011-2an actual analyst takes the raw figures, adjusts them for inflation and population increase, turns them into per capita dollars and notes that the industry is not looking so crash hot at the moment.
If you take a look at the Revenue Distribution chart halfway down, and cross-ref that with the Single Sales per Capita chart a little bit further down and extrapolate a little bit based on human behaviour then I think it's pretty obvious what is happening.
Old model for mainstream music:
- people hear a song on the radio, or on some top 40 TV show, or a friend plays it for them
- they go into the store to buy the song they like, but some of them buy the album because the it's about $20 for 10+ songs instead of $5 for 1 or 2.
- the label gets 4x the money for that 1 song the person liked
New model:
- people hear a song on the radio, or on some top 40 TV show, or a friend plays it for them, or they see it online someplace
- if they didn't originally see it online, they load up youtube or last.fm or something to check it out, and check other songs by the same artist out while they are at it
- some people like the other songs, buy the album online
- some think the other songs are a load of shit and buy just the one song they like as a single
- still others say "fuck it" and download the song/album/band's whole catalogue without paying
I think that the main change here is that the audience has more choice, and more information to go on when they are considering their purchase. Used to be that you heard a song you liked (maybe the single, maybe not), then maybe heard another song by the same band a bit later and thought "yeah ok, I'll go buy the album", because buying two songs from the album would take you up to half the album's cost and you'd take the gamble on the rest. Nowdays you can listen to basically every song off a band's album before you buy it, and make a decision as to whether or not you think it's worth your money. I can't see what is bad about that from the consumer's perspective.