Extinction-The Future of The Recording Industry Part 1
April 02, 2008 at 10:56 PM
Extinction-The Future of The Recording Industry Part 1
Looking back, it is generally agreed that the year of 2000 was the most successful year ever, for record sales. With acts like Britny Spears, N’Sync, Backstreet Boys, Mariah Carey, J-Lo, Cristina Aguilara, etc selling between 10 and 25 thousand units. This was the beginning of consolidating labels, labels being bought out by non-musical corporations etc. Now this really wasn’t a new trend, but a trend that peaked that year.
I recall reading an article the same year that said the average release sells approx. 800 units. Now let’s qualify that statement. What is considered a release? Well a release is basically anything that has a UPC or Barcode. So if you make a cd of yourself laughing and decide to go to a manufacturer, like Discmakers, and buy a UPC code—Guess what? You have a release! So if you order 1000 cds, and then sell 100 through Amazon, CD Baby etc, you have a cd with barcode and were scanned, so this factors into overall cd sales annually. If you make a cd, don’t get a barcode and sell it at gigs, it wont count. Only scanned units with bar codes. A bar code cost about $30. So there is where your average of 800 is determined. Janet Jackson sells 25 million units, joeblow sold 200. As you see, there are more releases that sell small numbers.
The industry has been on a steady decline ever since. If you observe the closing of most brick and mortar stores like Tower Records, it’s become a bit scary. On the upswing you have online retailers like Amazon, Cd Baby etc. You also have the ever popular legal downloading from companies like I-Tunes etc. Illegal downloads still happens, but has been slowly declining. So to go and buy a cd in a brick and mortar store is almost gone. Your choices are online, online downloads and at live shows.
What are the Major Labels doing? The same thing as the rest of us, trying to figure out a way to make money.
In the past a label would be happy if they had 2 or 3 mega stars and a dozen or so of other acts. The few mega stores would sell 10-25 million units. The other artists would sell between 50 thousand and a million. So in part the mega star would help pay for the other artists, who would sell as much. A label would sometimes take a chance on an artist who would only sell 50 thousand units because it gave them credibility with fans who thought they might not be cool because their marquee artist is considered a bubble gum project the label put together.
That was then, this is now. To be considered a mega star now, your looking at selling 2 million units instead of 25 millions. The chance they would take on a “cool” or artsy artist is gone. Just like the numbers dropped for the mega star, it follows suit with the “cool” artist. This artist may only sell on average of 25 thousand units. The label can in no way to make money off of this artist.
So if you’re an up and coming artist, with a bit of integrity what do you do? Are you a folk singer? Are you a Metal Band?
Do you fit on American Idol?
In my 20 plus years of playing and having moderate success, a show like American Idol represents everything that is wrong with the music business. However, I think it is the most watched show every week. It also creates the most searches on Google and Yahoo, after every show. I understand if you want o be a pop singer, it is a great outlet. Most labels that have a major artist under contract are sending their artists to perform on American Idol. Conveniently it usually corresponds with an artist’s new release. American Idol has become the best way for an artist to promote. An average of 25 million viewers per episode. Even if only 1% of the viewers buy an artist new cd, it will represent an incredible spike in sales.
I am into capitalism as much as the next guy, however I also believe in integrity. Remember Adolph Hitler? He was very popular. Being popular, doesn’t equate to being right or good. Does it?
In Part 2 we will discuss how to get your music heard.
Earl Smith