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8% fall in global music sales….

April 22, 2009

Much predictable record company hand-wringing and gnashing of teeth over newly announced 8% fall in global music sales. See this BBC report for details:
http://news.bbc.co.uk/1/hi/entertainment/8012160.stm

CD sales are down, download sales are up but not enough to cover drop in revenue from CDs. That’s because downloads are cheaper, apparently.

No shit, Sherlock.

We have a small label. After any recording and mastering costs (which would be the same for CD or download), a run of 1,000 CDs might cost about £900 and then there’s the cost of distribution on top of that. Our last release, Remembering Machine by Secret Archives of the Vatican, was download only and it cost us about $40US to get it on all the main download sites for a year. That’s all the sites, not each.

So, downloads cost the big record companies an insignificant amount of money compared with physical formats. So, why are they losing revenue?

Could it be it because they have overcharged for CDs for so many years that people are fed up and are choosing an illegal, free, download over a CD? Because the big four record labels have been so slow to start adapting to the modern world, people had already become accustomed to free, illegal, downloads by the time the labels had started their own download services or provision. The labels’ digital marketing wings have left it too late to start evolving and have doomed the dinosaurs to extinction. They’re still trying to fit hurredly-adapted, slow dinosaur thinking into a world of rapidly evolving creative mammalian brains and it won’t work.

The future is small labels, netlabels, releasing decent quality formats such as WAV and FLAC at reasonable prices or free, with revenue coming from new and previously unexplored marketing paradigms.

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One Comment leave one →
  1. April 23, 2009 3:11 pm

    I was looking through my CDs a while ago and was shocked to discover I was routinely paying £15 for a single CD in the old days (1980s-90s). I wouldn’t dream of paying more than £7-8 these days for a “top of the chart” album from play.com or cd-wow.com, but I would be prepared to pay more to an independent artist on an independent label.

    Given what you’ve said, we really should be able to get downloads for, what, £2-3 per album? Yet we don’t.

    It’s simple really, this is the music BUSINESS, not the MUSIC business.

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