Kudos to Mr. Jobs and Mr. Nicoli for announcing what should have been a reality five years ago. But, as a dear friend of mine says, you can never put toothpaste back into the tube, so
while I applaud the companies who have come together, you won’t see me saying that this is going to save the record industry.
Ask me why I am a little jaded?
Well, the answer is simply in the numbers.
· In 2006, total music sales slipped $624 million, despite a $1 billion year-over-year
increase in online sales.
· Online music adoption (excluding ringtones, etc.) grew 93% year-over-year in 2006.
· According to the International Federation of the Phonographic Industry, retail music sales totaled about $18 billion globally, down 8%
year-over-year. Additionally, digital music sales were $1.2 billion and mobile audio sales were about $850 million.
· Online music
currently represents about 7% of total music sales (this includes CDs, sell-through downloads, and online subscription as music sales; not ringtones), versus about 3% in 2005 and 1% in 2004.
· In 2006, approximately 582 million tracks were downloaded, up 65% year-over-year, and up 100% CAGR (compounded annual growth rates) since
2004.
· In 2006, 54 songs sold more than 500,000 digital copies (the RIAA’s threshold for “gold”) and 11 albums
sold more than 100,000 downloads, versus, respectively, about 22 songs and three albums in 2005.
· Nielsen
Soundscan reports that digital song sales have risen 54%, while album sales -- both in physical and digital form -- have dropped more than 16% so far in 2007.
Source: Nielsen Soundscan, Maxim Group LLC.
Don’t bother me with the growth in digital -- it won’t save the music business, but it may help in
keeping artists from running helter skelter from the labels. Or will it? Tomorrow never knows. Have thoughts on whether or not we can work it out with consumers -- or is the
damage that the digital revolution caused the music industry irreversible? You tell me why.