An Interesting Chart

pafufta816 · Post by **pafufta816** » Sun Feb 20, 2011 9:36 pm

my guess is that the representation for digital sales doesn't include the niche market distributors like beatport or juno. they probably only included itunes and amazon.

patrick bateman · Post by **patrick bateman** » Mon Feb 21, 2011 9:39 am

http://digitalmusicnews.com/stories/021711disruption

ChrisCV · Post by **ChrisCV** » Mon Feb 21, 2011 1:34 pm

shepard... you're right you can't glean an entire conclusion from one graph... and yes statistics can be used for good and evil....

but from this graph it gives you an interesting insight at a high level to the general music business... Its a good starting point for the forming of questions and opinions.

like an interesting thing to observe is the massive increase in turnover across the industry between 1987 and 2001.. this growth (approx 200%) massively exceeded the inflation growth (57% - i used this to get this figure http://www.halfhill.com/inflation.html). was this growth expected to last forever? why was it growing so much... was that demand for music real or over inflated?

This also feeds into the drop off... can this all be attributed to piracy... does this steep drop off directly correlate to an equally steep uptake of broadband subscribers and napster/kazaa users? or can a lot of it be proportioned to a over bloated system correcting itself due to few big players and little competition...

roland · Post by **roland** » Mon Feb 21, 2011 1:50 pm

if the market is correcting itself as you mentioned, it would imply that in 2001 music was consumed more than today.. i highly doubt that to be honest.. back then there weren't even ipods.. imo it's obvious that during the last 10 years music has even stepped in new markets for example the very young ones.. only thing is they aren't paying

ChrisCV · Post by **ChrisCV** » Mon Feb 21, 2011 2:27 pm

roland wrote:if the market is correcting itself as you mentioned, it would imply that in 2001 music was consumed more than today.. i highly doubt that to be honest.. back then there weren't even ipods.. imo it's obvious that during the last 10 years music has even stepped in new markets for example the very young ones.. only thing is they aren't paying

no it does not imply more people consume music in 2001 than now because its not a graph about units sold... we can't gain that information from the detail that we have here... its just a graph about the global turnover of the music industry between the 70s and now... the money the labels generated from the sale of music... (don't forget this isn't the profit)

higher revenue might mean more demand... or it might mean a higher unit cost... or it might mean both things happened at the same time... i'm inclined to think its the latter... there was more exposure to music, more people wanted music.. albums and singles increased in prices... i bet you the price of an album on CD didn't increase/decrease proportionally to the change in overheads compared to vinyl. i can guarantee it was more because it was something new, better.... whilst the overheads for producing a CD are significantly lower.... So the turnover in comparison to the demand could be inflated because of this...

which is way i believe the decline is partially due to a market correction... you can't keep inflating beyond its means forever... people catch on, have a realisation... what we're seeing now is a decrease in demand some of it due piracy, but also to changing needs of the consumer (singles over albums, alternate approachs, etc)... combine that with the drop in prices... digital singles at one point 99p/£1.49...

so i reckon its a double whammy of things happening causing the fluctuations.... but i'd imagine the big spike through the CD phase was inflated hugely through the pricing thing than an exponential increase in demand... i mean what happened in 1987 for everyone to suddenly start buying loads more music than before?

its not a new thing kids listening to music... and for free... there was this medium called radio that used to do something similar... back then there also these things called walkmans...

Opuswerk · Post by **Opuswerk** » Mon Feb 21, 2011 3:21 pm

Here's an interesting reply to that very same graph. It does put it in a new light imo:

http://www.businessinsider.com/these-ch ... try-2011-2

ChrisCV · Post by **ChrisCV** » Mon Feb 21, 2011 4:42 pm

ahhh nice one... those graphs are much better...

so they attribute the drop off in revenue to the death of album sales which back in the day was the most lucrative form of music to be sold...

i guess back in the CD days you'd pay £10 or more for an album.. and anything between £1.99 to £3.99 for a single... i would always by an album because after purchasing a few singles you technically could have bought the entire album.... you might not buy every single from an album, but if you go straight for the album each time that's more money they've made off you...

but with mp3s lowering singles costs for the consumer and i guses a shift towards wanting just individual songs.. the album sales have taken a hit... and thus hits the revenues...

Shepherd_of_Anu · Post by **Shepherd_of_Anu** » Mon Feb 21, 2011 7:36 pm

Interesting thoughts Chris. Its hard to really say what the exact cause of the decline is but I do not think that it can be chalked up to piracy alone. I am old enough that I remember in my early teen years people still used cassette tapes. Then came CDs of course. I can say with assurance that people passed around music as voraciously then as they do now except that with today's technology it is much easier for groups like the RIAA to track this sharing. They can create software to penetrate file sharing networks and monitor torrent sites. You couldn't do that when it came to people just passing around music between friends. I remember when one of my friend's dad bought him a computer with a new thingamajig called a CD burner kids would pool their cd collections or spit on the cost of a new CD from the store and suddenly everyone music collection would expand exponentially.

Speaking of cassette tapes... I found a box of tapes in my basement with mixtapes passed out by djs at raves. Gave me a good chuckle.

I think there are a few bigger reasons for the decline. For sure, the consumers ability to only buy the tracks they actually want is a huge factor. Lets be honest, out of 12 songs most albums have maybe 3-4 good ones if you are lucky and the rest is just filler you had no choice but to swallow. It is the most aggravating thing in the world to be at a record store with only $20 to spend and two CDs where one CD has 1 song you love and the other has 4 you like. There is no reason we should be faced with such decisions.

That has already been talked about though. It seems to me that people may be overlooking something bigger. Maybe people just consume less music in the traditional sense. The decline of music sales seems to coincide with the explosion of media in general. Now days there are so many different distractions directed at the people who have historically been the primary consumers of music that its not hard to conceive that their attentions are directed elsewhere. Now days we have 300+ cable channels, On Demand movies, Xbox, Playstation, Wii, Online gaming, Internet videos, websites and social media. There are a lot more things for people to do there there was 20 years ago.

I think this has something to do with it. Lets not forget that the baby boomers are getting old. As far as I know they still make up a big chunk of the population but I don't get the feeling there is much music being made which they are too interested in. As they get older they will buy music less and less no doubt. Thats just the way of the elderly.

Gonna bring those images in here...

Raw (unadjusted, US data only)

Adjusted for inflation & population