Despite costly efforts to build buzz around new talent and thwart piracy, CD sales have plunged more than 20 percent this year, far outweighing any gains made by digital sales at iTunes and similar services. Aram Sinnreich, a media industry consultant at Radar Research in Los Angeles, said the CD format, introduced in the United States 24 years ago, is in its death throes.
“Everyone in the industry thinks of this Christmas as the last big holiday season for CD sales,” Sinnreich said, “and then everything goes kaput.”
It’s been four years since the last big shuffle in ownership of the major record labels. But now, with the sales plunge dimming hopes for a recovery any time soon, there is a new game of corporate musical chairs afoot that could shake up the industry hierarchy.
I’ll pause here to note that one of the features of the Chronicle’s online edition is a little box called “Search Results”, where they have links to related stories in their archives. One such piece is headlined Tough tactics give music industry new sales hope, dated January 14, 2004. It’s about how the industry’s combination of suing downloaders and aggressively entering the online music sales world would finally reverse four years’ worth of declining sales. So much for that.
For the companies that choose to plow ahead, the question is how to weather the worsening storm. One answer: diversify into businesses that do not rely directly on CD sales or downloads. The biggest one is music publishing, which represents songwriters (who may or may not also be performers) and earns money when their songs are used in TV commercials, video games or other media. Universal Music Group, already the biggest label, became the world’s biggest music publisher on Friday after closing its purchase of BMG Music, publisher of songs by artists like Keane, for more than $2 billion.
Now both Universal and Warner Music Group are said to be kicking the tires of Sanctuary, an independent British music and artist management company whose roster includes Iron Maiden and Elton John. The owners of all four of the major record companies also recently have chewed over deals to diversify into merchandise sales, concert tickets, advertising and other fields that are not part of their traditional business.
Even as the industry tries to branch out, though, there is no promise of an answer to a potentially more profound predicament: a creative drought and a corresponding lack of artists who ignite consumers’ interest in buying music. Sales of rap, which had provided the industry with a lifeboat in recent years, fell far more than the overall market last year with a drop of almost 21 percent, according to Nielsen SoundScan. (And the marquee star 50 Cent just delayed his forthcoming album, Curtis.)
There’s a lot of good reasons why the music industry is in the tank, from their sue-the-customer approach to downloading to the stagnation of radio. But don’t overlook the abundance of crappy music as a factor. I realize I’m nobody’s target demographic, but I can count on one hand the number of major-label CDs that have come out in the last year or so that have made me think “I really ought to buy that”. I may not be representative of anything, but I bet I’m not the only person who feels this way.
One more thing, on a personal note:
More than half of all music acquired by fans last year came from unpaid sources, including Internet file sharing and CD burning, according to the market research company NPD Group. The “social” ripping and burning of CDs among friends — which takes place offline and almost entirely out of reach of industry policing efforts — accounted for 37 percent of all music consumption, more than file-sharing, NPD said.
So far, I have not ripped any CD that we don’t already own. I’ve only approached one person about it, and that’s my buddy Matt, who was my roommate for many years and whose CD collection I still think of as partly mine. I have this bizarre sense of guilt about borrowing other people’s CDs to rip, which I can’t quite explain. It’s not like I didn’t borrow friends’ albums and CDs back in the day to tape them. I’m sure I’ll get over this, but it’s still weird.