Rolling Stone has a scathing article on the self-immolation of the record industry. It's a must-read for anyone interested in music.
From RollingStone.com
This is the first part of a two-part series on the decline of the record industry. Today we're including Brian Hiatt and Evan Serpick's report on where the music business went wrong, from the current issue of Rolling Stone, as well as an interactive graphic illustrating the industry's slide. Tomorrow, check back with RollingStone.com for interviews with industry leaders on the future of the music business.
For the music industry, it was a rare bit of good news: Linkin Park's new album sold 623,000 copies in its first week this May -- the strongest debut of the year. But it wasn't nearly enough. That same month, the band's record company, Warner Music Group, announced that it would lay off 400 people, and its stock price lingered at fifty-eight percent of its peak from last June.
Overall CD sales have plummeted sixteen percent for the year so far -- and that's after seven years of near-constant erosion. In the face of widespread piracy, consumers' growing preference for low-profit-margin digital singles over albums, and other woes, the record business has plunged into a historic decline.
The major labels are struggling to reinvent their business models, even as some wonder whether it's too late. “The record business is over," says music attorney Peter Paterno, who represents Metallica and Dr. Dre. “The labels have wonderful assets -- they just can't make any money off them." One senior music-industry source who requested anonymity went further: “Here we have a business that's dying. There won't be any major labels pretty soon."
In 2000, U.S. consumers bought 785.1 million albums; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums), according to Nielsen SoundScan. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006, the top ten sold just 25 million. Digital sales are growing -- fans bought 582 million digital singles last year, up sixty-five percent from 2005, and purchased $600 million worth of ringtones -- but the new revenue sources aren't making up for the shortfall.
Continue...
From RollingStone.com
This is the first part of a two-part series on the decline of the record industry. Today we're including Brian Hiatt and Evan Serpick's report on where the music business went wrong, from the current issue of Rolling Stone, as well as an interactive graphic illustrating the industry's slide. Tomorrow, check back with RollingStone.com for interviews with industry leaders on the future of the music business.
For the music industry, it was a rare bit of good news: Linkin Park's new album sold 623,000 copies in its first week this May -- the strongest debut of the year. But it wasn't nearly enough. That same month, the band's record company, Warner Music Group, announced that it would lay off 400 people, and its stock price lingered at fifty-eight percent of its peak from last June.
Overall CD sales have plummeted sixteen percent for the year so far -- and that's after seven years of near-constant erosion. In the face of widespread piracy, consumers' growing preference for low-profit-margin digital singles over albums, and other woes, the record business has plunged into a historic decline.
The major labels are struggling to reinvent their business models, even as some wonder whether it's too late. “The record business is over," says music attorney Peter Paterno, who represents Metallica and Dr. Dre. “The labels have wonderful assets -- they just can't make any money off them." One senior music-industry source who requested anonymity went further: “Here we have a business that's dying. There won't be any major labels pretty soon."
In 2000, U.S. consumers bought 785.1 million albums; last year, they bought 588.2 million (a figure that includes both CDs and downloaded albums), according to Nielsen SoundScan. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006, the top ten sold just 25 million. Digital sales are growing -- fans bought 582 million digital singles last year, up sixty-five percent from 2005, and purchased $600 million worth of ringtones -- but the new revenue sources aren't making up for the shortfall.
Continue...
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