Thursday, February 18, 2010
The day the music tried...
What has technology done to the music industry? Long before my time as a Claim Processing director here at Junk my Car, I managed a record store (that long forgotten place where you could actually go to buy music on cassette and compact disc).
People would walk in every Tuesday just to get their hands on that newest releases, leaving the store with that coveted tangibility.
The tech age has changed all of that. Record stores are a dying breed. In July 2009, the Virgin Mega-store in New York City closed it's doors forever!
Similar stores like the media powerhouse Trans World Entertainment, which operates the FYE chain, has closed at least 280 of its locations over the last two years.
Why is this happening?
In the face of widespread piracy, consumers' growing preference digital singles over albums, the record business has plunged into a historic decline.
According to Nielsen SoundScan, total music album sales in the U.S. reached only 428 million in 2008, which was a 14% reduction from 2007.
Compare this to it's Digital counterpart which had a billion songs downloaded in 2008, (a 27% increase).
Read more: http://www.allheadlinenews.com/articles/7013585191#ixzz0f4wo32tw
The major labels are struggling to reinvent their business models, even as some wonder whether it's too late.
According to music attorney Peter Paterno, who represents Metallica and Dr. Dre, "The record business is over."
How can you beat free?
With major bands like Nine Inch Nails and Radiohead issuing full length albums for free, it seems like Mr. Paterno isn't too far off. Bands have begun to realize that they are making little to no money from album sales.
According to the Almighty Institute of Music Retail a new album with a list price of $15.99 has the following breakdown:
$0.17 Musicians' unions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead
This means that the Label gets $7.01 per CD and retailers get $4.69 for a combined percentage of 73% of the price of each CD.
Royalties, artists, and manufacturing costs combined total only $4.29.
The good news
This radical change is not all bleak. In fact, this shift from tangible to digital has leveled the playing field for independent artists.
On Average it costs an independent musician somewhere between $12 and $18 to publish just one CD.
Now with the digital age, an independent band still needs to record, produce and master their music, but they can enjoy the same worldwide distribution that the Major Labels enjoy at a much lower cost.
Itunes
To get a song on Itunes it depends which company you use.
Example, Zimbalam charges $19.99 for a single and $29.99 for an album.
See also: cdbaby.com, dittomusic.com, & tunecore.com
Less storage space needed
An external hard-drive on average weighs under 5 lbs and has a footprint of 2.5", and with storage prices coming down you can get a Terabyte drive for around $100.
The major labels are struggling to reinvent their business models, even as some wonder whether it's too late.
According to music attorney Peter Paterno, who represents Metallica and Dr. Dre, "The record business is over."
How can you beat free?
With major bands like Nine Inch Nails and Radiohead issuing full length albums for free, it seems like Mr. Paterno isn't too far off. Bands have begun to realize that they are making little to no money from album sales.
According to the Almighty Institute of Music Retail a new album with a list price of $15.99 has the following breakdown:
$0.17 Musicians' unions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead
This means that the Label gets $7.01 per CD and retailers get $4.69 for a combined percentage of 73% of the price of each CD.
Royalties, artists, and manufacturing costs combined total only $4.29.
The good news
This radical change is not all bleak. In fact, this shift from tangible to digital has leveled the playing field for independent artists.
On Average it costs an independent musician somewhere between $12 and $18 to publish just one CD.
Now with the digital age, an independent band still needs to record, produce and master their music, but they can enjoy the same worldwide distribution that the Major Labels enjoy at a much lower cost.
Itunes
To get a song on Itunes it depends which company you use.
Example, Zimbalam charges $19.99 for a single and $29.99 for an album.
See also: cdbaby.com, dittomusic.com, & tunecore.com
Less storage space needed
An external hard-drive on average weighs under 5 lbs and has a footprint of 2.5", and with storage prices coming down you can get a Terabyte drive for around $100.
1 TB = 250,000 Audio tracks (more or less)
Greener option
Digital mediums are not only more portable, more accessible, and cheaper, but they are also greener. just think of all the plastic, and paper saved for each downloaded song/album.
Instead of burning compilation disc after compilation disc only to discard them after several listens you can now put all of your music on digital devices(Hard Drive, Mp3 player, Phone, Computer, etc.) and swap as needed.
The Drawbacks
Tangibility - As an avid collector of music (with over 700 compact discs in my personal collection) I can honestly say that there really is nothing quite like purchasing a brand new disc or better still a vinyl album, cracking it open and reading the lyrics, or checking out the amazing artwork found inside.
Regardless of which side of the debate you are on, digital mediums are here to stay and will continue to thrive in this need it now society that we live in.
Now we have to wait and see what the music industry does to re-invent itself and change with the times instead of fighting the tide.
Instead of burning compilation disc after compilation disc only to discard them after several listens you can now put all of your music on digital devices(Hard Drive, Mp3 player, Phone, Computer, etc.) and swap as needed.
The Drawbacks
Tangibility - As an avid collector of music (with over 700 compact discs in my personal collection) I can honestly say that there really is nothing quite like purchasing a brand new disc or better still a vinyl album, cracking it open and reading the lyrics, or checking out the amazing artwork found inside.
Regardless of which side of the debate you are on, digital mediums are here to stay and will continue to thrive in this need it now society that we live in.
Now we have to wait and see what the music industry does to re-invent itself and change with the times instead of fighting the tide.
Labels: Junk my Car, music industry, technology
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