Moderator: Andrew
Music Industry Sales Rise, and Digital Revenue Gets the Credit
By ERIC PFANNER
Published: February 26, 2013
The music industry, the first media business to be consumed by the digital revolution, said on Tuesday that its global sales rose last year for the first time since 1999, raising hopes that a long-sought recovery might have begun.
The increase, of 0.3 percent, was tiny, and the total revenue, $16.5 billion, was a far cry from the $38 billion that the industry took in at its peak more than a decade ago. Still, even if it is not time for the record companies to party like it’s 1999, the figures, reported Tuesday by the International Federation of the Phonographic Industry, provide significant encouragement.
“It’s clear that 2012 saw the global recording industry moving onto the road to recovery,” said Frances Moore, chief executive of the federation, which is based in London. “There’s a palpable buzz in the air that I haven’t felt for a long time.”
For years, the music industry’s decline looked terminal, with the record companies seemingly unable to come up with digital business models that could compete with the lure of online piracy. Last year, however, digital sales and other new sources of revenue grew significantly enough to offset the continuing decline in CD sales.
“At the beginning of the digital revolution it was common to say that digital was killing music,” said Edgar Berger, chief executive of the international arm of Sony Music Entertainment. Now, he added, it could be said “that digital is saving music.”
Digital revenue comes in a variety of forms. Sales of downloaded singles and albums, from services like Apple’s iTunes, continue to grow. More promising for the industry, however, are subscription-based offerings, including Spotify, Rhapsody and Muve Music. The number of subscribers to services like these grew by 44 percent last year, to 20 million, the federation said.
Several new entrants are expected soon, including subscription services from Apple and Google, promising additional subscriber fees and licensing revenue for the record companies. Other sources of revenue, including royalties from musical performances and marketing uses of music, have also been growing.
The industry’s state of health remains highly uneven around the world. Over all, eight of the 20 biggest music markets showed growth last year, but in some countries that the industry classifies as “emerging,” like Russia and China, piracy remains endemic and legitimate digital services struggle.
There are also worrying signs in some more developed markets that had previously been relatively robust, like Britain. There, the recent bankruptcy of the leading retail music chain, HMV, has prompted fears about an acceleration of the decline in CD sales.
In the United States, sales slipped slightly last year. But Enders Analysis, a research firm in London, predicted in a separate report published Tuesday that a turnaround there would begin this year, with revenue rising to $5.35 billion from $5.32 billion.
Alice Enders, a senior analyst at the firm, said growth in the coming years was likely to remain slow as CD sales continued to plunge. Still, given that industry executives had grown accustomed to more than a decade of falling revenue, the performance last year was encouraging.
“It’s huge,” she said. “It’s a milestone.”
Even if the music business never bounces back to anything near its former size, it could still return to robust profitability in coming years, Ms. Enders said. That is because the shift to digital delivery of music lowered the record companies’ costs.
Record companies were initially reluctant to embrace digital methods of distribution, seeing only the threat from online piracy, rather than the opportunities of new business models. Over time, digital business models that were initially dismissed — free, advertising-supported music like one of Spotify’s services, for example — were brought back in from the cold.
By last year, according to the industry federation, the music business generated 34 percent of its revenue from digital sources, putting music substantially ahead of other media. In several countries, including the United States, India, Norway and Sweden, digital sales already make up more than half of music revenue.
Now music executives, having been written off as dinosaurs, are finding their skills and knowledge back in demand.
Book publishers in London and New York, for example, have been hiring digital experts away from record companies, analysts say, as they seek to build up their e-book businesses.
Had the music industry been more open to change in 1999, some analysts say they believe, it might not have taken more than a decade to get to this stage.
“If there is a lesson to take away, it is probably that the earlier you can embrace new business models and services, the better,” said Paul Brindley, chief executive of Music Ally, a consulting firm in London. “Whether this is signaling a turnaround that will lead to inexorable growth, who knows? But it does at least signal a bottoming out, with room for growth.”
Don wrote:Illegal downloads are the easy scapegoat these days. Adele's album has sold 11 million copies, do your think her fans don't know what torrents are? She has sold that number regardless.
Eclipse didn't sell less because of torrents. Actually it was barely on the torrent sites the first few months after launch because there was NO INTEREST.
Revelation, on the other hand was getting torrented like crazy, even the DVD. And it still sold 880,000 packages.
People always bring up Arrival but that was over ten years ago when digital piracy was a new challenge. The industry has adapted. Now days, If you ain't getting torrented, you ain't selling; one is a perfect barometer for the other.
Remember when Apple had DRM on on all their music? Gone, they don't do that it anymore. You put a good product out there with proper promotion and sales will take care of themselves IF it's a product that the customers want, not necessarily what an Artist like Neal Schon wants..
Andrew wrote:Monker wrote:Andrew wrote:Eric wrote:brywool wrote: I think for a non-promoted, poorly released album, that 100,000 in sales is pretty darned good. I think that Cain needs to realize that the world has moved on and it's not 1983. They either do this cuz they love it and can make money, or they realize that they're not getting any joy out of it. If you look at the Neal and Arnel interviews of late, looks like they're having a ball. Only Cain seems disgruntled. Um... is that new or something? Nope.
You know...I'm glad someone said that. Why is 100k in 2013 for a Walmart only release that bad? I'm not saying its not mildly disappointing...but geez.
It's as good as most other tier bands out there for sure.
NOT a flop.
I think Walmart would disagree...pretty strongly, too.
I don't think so. 100k of ANY media product in this day is good.
Monker wrote:Andrew wrote:Monker wrote:Andrew wrote:Eric wrote:brywool wrote: I think for a non-promoted, poorly released album, that 100,000 in sales is pretty darned good. I think that Cain needs to realize that the world has moved on and it's not 1983. They either do this cuz they love it and can make money, or they realize that they're not getting any joy out of it. If you look at the Neal and Arnel interviews of late, looks like they're having a ball. Only Cain seems disgruntled. Um... is that new or something? Nope.
You know...I'm glad someone said that. Why is 100k in 2013 for a Walmart only release that bad? I'm not saying its not mildly disappointing...but geez.
It's as good as most other tier bands out there for sure.
NOT a flop.
I think Walmart would disagree...pretty strongly, too.
I don't think so. 100k of ANY media product in this day is good.
You print as many copies of your MRCD"s as Wal-mart printed of Eclipse...and then see how you feel when sales do not justify what you printed.
Jeremey wrote:It matters not to Journey how many copies Wal Mart sold on Eclipse. It's a sweetheart deal for the band, because they pay for the production of the CD and then sell the units directly to WalMart - so they may have "sold" 100,000 copies of Eclipse through WM, but the actual band Journey's sales count only toward the order that was filled with WalMart, which was probably on the order of about 250k copies. So the bad news for the band is, sure they got paid for the 250k units up front, but Wal Mart sure as shit won't be distributing any more Journey records, nor will any other major label (barring Steve Perry in the vocalist slot), so the onus falls on Journey to once again record a record on their own, give it out at concerts, sell it on iTunes, and get a world distribution deal with Frontiers. In other words, too much fucking work for the band to even worry about. So that's why you're hearing the "I think we're done making new albums" comment. It's a business, plain and simple.
lowdbrent wrote:Jeremey wrote:It matters not to Journey how many copies Wal Mart sold on Eclipse. It's a sweetheart deal for the band, because they pay for the production of the CD and then sell the units directly to WalMart - so they may have "sold" 100,000 copies of Eclipse through WM, but the actual band Journey's sales count only toward the order that was filled with WalMart, which was probably on the order of about 250k copies. So the bad news for the band is, sure they got paid for the 250k units up front, but Wal Mart sure as shit won't be distributing any more Journey records, nor will any other major label (barring Steve Perry in the vocalist slot), so the onus falls on Journey to once again record a record on their own, give it out at concerts, sell it on iTunes, and get a world distribution deal with Frontiers. In other words, too much fucking work for the band to even worry about. So that's why you're hearing the "I think we're done making new albums" comment. It's a business, plain and simple.
Bull.
It does matter what Journey sells, to Journey, to the largest brick and mortar retailer in the world. If you can't sell a record where the majority of people in the USA shop, then that is not good for you as a band. Who else is going to give Journey an exclusive and a blank check to produce it? If it did not work for Walmart, it will not work for anyone else.
VirgilTheart wrote:I haven't posted here in quite awhile for various reasons, but reading this thread ignited the desire to speak up.
It's been almost two years since Eclipse came out, and I admit it wasn't quite as good of an album as I thought it was initially. Yes, the songs did occasionally drag on, and yeah a few of Neal's solos were too much. But it's still a great album, and one of my personal favorites from the band.
Part of my personal issue with how the band handled promoting the album when it came out was the downright idiotic choices of what songs to play live in their shows in the states. I was present at a show in Hawaii back in 2009 where the band played multiple songs off of Revelation and all got a good reception from the audience. You have to pick songs that work well in a live setting, and Journey failed to do that with the Eclipse material in 2011. Instead of playing City of Hope and Edge of the Moment, they should have played Anything Is Possible and Resonate. I strongly feel both songs would have gotten a better reception from the audience, especially Resonate. And of course, the album was horribly promoted.
I saw that someone here made a comment that Eclipse didn't sound like Journey. I would like to respectively call bullcrap on that and kindly point to Frontiers and Trial By Fire, two Steve Perry era albums that have a very similar sound to Eclipse.
I'd also like to say that it perplexes me how fixated some fans here are on the sales of modern Journey albums VS classic Journey albums/Greatest Hits. No matter what, even if the band were to reunite with Steve Perry, the sales of Greatest Hits will always outmatch whatever new album Journey releases. It also doesn't help that whenever the band does release something new, the media just spams Don't Stop Believin' and the other Dirty Dozen songs. It's like some folks here have really unrealistic expectations of what the band should accomplish, and then act like it's the band's fault for not hitting multi-platinum sales.
Last year, I spent some time with the Van Halen fanbase when their new album with DLR came out, and the vibe there was entirely different. Did folks want the band to get good sales? Yes, but they made efforts themselves to help support the band and understood that no new album would ever reach sales like 1984. And now I'm spending time with Queensryche fans (the Todd La Torre lineup), and it's also really positive there. No one's expecting the band to reach sales like Empire (granted Tate kinda drove the band into the ground so that'd be hard regardless), but they just want to support the band and help them sell the best that they can.
I understand everyone here has opinions on the band, and I can't really say anyone here is definitively right or wrong. But I'm surprised at how generally negative many here are about Journey in comparison to a lot of other band fanbases I've seen elsewhere.
That said, I hope you all are doing well and wish you all the best!
Jeremey wrote:...and get a world distribution deal with Frontiers. In other words, too much fucking work for the band to even worry about. So that's why you're hearing the "I think we're done making new albums" comment. It's a business, plain and simple.
The_Noble_Cause wrote:Jeremey wrote:...and get a world distribution deal with Frontiers. In other words, too much fucking work for the band to even worry about. So that's why you're hearing the "I think we're done making new albums" comment. It's a business, plain and simple.
After Red 13, Jon said something to the effect of "we got our asses handed to us." As if he & Neal thought they could independently put out a non-Perry album and have it sell Escape or TBF type numbers. Get real. Even in terms of micro-targeting and appealing to your diehards, Journey is fucking horrible.
steveo777 wrote:The_Noble_Cause wrote:Jeremey wrote:...and get a world distribution deal with Frontiers. In other words, too much fucking work for the band to even worry about. So that's why you're hearing the "I think we're done making new albums" comment. It's a business, plain and simple.
After Red 13, Jon said something to the effect of "we got our asses handed to us." As if he & Neal thought they could independently put out a non-Perry album and have it sell Escape or TBF type numbers. Get real. Even in terms of micro-targeting and appealing to your diehards, Journey is fucking horrible.
I thought they were one of the best bands ever. I guess I was mistaken.![]()
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