Album Sales Week of 2/9 and Industry News

 |  February 17, 2010
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album sales week of 2/9/10

Sade “Soldier of Love” – 501,665 (18% digital)
Jaheim “Anotha Round” – 112,000 ( 9% digital)
DJ Kayslay “More Than Just a DJ” – 5,900 (25% digital)
Gil Scott-Heron “I’m New Here” – 3,680 (40% digital)
Georgia Anne Muldrow “Kings Ballad” – 290

And now, onto industry news

The Future of recorded music (and my spin on what the future is for indies)

Glenn Peoples over at Billboard is one of the most forward thinking and on-point commentators on the music business I’ve encountered.  In this article (linked above), he outlines 5 crucial steps for creating a successful transition to the “access” model (as he calls it), also known as “streaming” or “the cloud.”

Here’s the basic idea: the only way for labels (and artists) to profit from an access model is for the model to operate on a massive scale (read: tens of millions of users).  The fact that the average payout-per-stream (which is currently somewhere around 1/2 a cent), and average revenue per user (which is exponentially lower than it was with a CD or even an mp3 purchase) is going to have to be offset by the massive scale of users.  In order to get such a large user base, labels are going to have to accept growth through other means, as there aren’t tens of millions of people willing to pay for a premium streaming service, just as there aren’t millions of people still willing to buy any given album.  This is where bundling and partnerships (with mobile carriers and cable/broadband service providers) come into play.  I know you’ve heard me talk before about how I’m unwilling to pay $10 for a CD, but won’t second guess my $100 + phone and internet bill every month.  So this idea is that in order to get revenue from every user, there have to be “clever” ways of accessing it, that are not about directly purchasing music, but purchasing access to data, and having data include music, and having music companies enjoy revenues from the greater generic data-access plan.  Finally, (he says), labels need to take a leap of faith, and trust that although revenues will go down during this transition period, having millions and millions of listeners with a lower average revenue per listener/user is a good thing in the long term, if it means higher revenues.

All this makes sense, for the major labels.  But to me, this feels like raising taxes on the middle class.  What’s going to happen to the indie label and musician in this model?  Someone who will never be able to get 5 million paying fans, but who IS able to subsist on selling 15,000 albums a year and playing shows to 300-person crowds?  If this revenue model is based on small payouts per listener/fan, but high numbers of fans, are we doomed to live in a Black Eyed Peas, Lady Gaga, Susan Boyle and Jonas Brothers dominated world?  Part of the whole beauty of the independent music scene is that you get truly dedicated fans, who are willing to spend $50 – $100 / year on their artist, which will actually make a tangible difference to that artist.

Does this mean that while majors will be whoring themselves out to every phone company, cable provider and mobile network, that indies will still be making CD’s, or relying on downloads, because there’s a higher profit margin, and much higher revenue per fan?  Or does this mean that the whole indie distinction is going to be washed away, in a world where people will have access to all data, all the time, everywhere?

What do you think?