A Manhattan subway train, inside and out, is turned into a Lady Gaga billboard, part of the marketing blitz to promote the
album 'Born This Way.'
(Credit: Greg Sandoval/CNET)
Album sales edge up 1 percent for just the first half of the year and suddenly it seems everybody in the music industry is
giddy.
That's likely due to the fact that since 2004, all the news about sales has been bad, bad, bad. Consider that the music
industry hasn't
wholesale abercrombie fitch seen growth since George W. Bush was preparing
for a second term as president, the Boston Red Sox were breaking the curse of the Bambino, and Mark Zuckerberg was founding
Facebook.
Last Wednesday, research firm Nielsen SoundScan announced that the industry recorded a 1 percent increase in overall U.S.
album sales for the first six months of the year, snapping a dismal seven-year run of sales declines. Digital music helped
power the gains as sales of digital tracks rose 11 percent, a rebound from the 1 percent growth for all of 2010. Digital
albums grew at a healthy 19 percent.
Nobody is dancing in the streets, but the numbers have stirred hope among some connected to the business that a decade-long
revenue slide--which they trace to Napster and the onset of illegal file sharing--may be over. "I think the rise in album
sales certainly gives one cause for cautious optimism," said John Marmaduke, CEO of Hastings Entertainment, a chain store
that sells books, DVDs, and CDs.
Of course,
discount moncler there's nothing to say that the
second half of the year won't bring more losses and it's not clear whether the rise in unit sales will translate into
revenue growth. Nielsen tracks unit sales and not the revenue generated. The Recording Industry Association of America
(RIAA) collects that data but doesn't report until after the end of the year. And the last full year that revenue was up
was--you guessed it--2004. Total music sales were more than $12 billion then. They tumbled to $6.8 billion last year.
The graphic below charts the amount of revenue generated by overall music sales for the years 1996 through 2010. Note that
2004 also halted a string of revenue declines, but in that case the upturn was short-lived. The obvious question here is
whether the recent sales boost is also an anomaly?
The above chart illustrates the revenue generated by overall music sales for the years 1996 through 2010.
(Credit: Recording Industry Association of America)
It might be
christian louboutin replica easier to answer that question if we knew what
triggered the sales increases. Nobody seems to know for sure, but some of the experts and people on the front lines of
music retail agree several factors likely played a part.
Death of LimeWire
The four largest record companies took down LimeWire, at one time the most popular way to download music illegally. NPD
Group, a research firm, reported in March that 56 percent of everyone who downloaded music illegally with a peer-to-peer
service in the third quarter last year did so with LimeWire.
The RIAA prevailed last year in a copyright case it brought against the company behind the peer-to-peer network and founder
Mark Gorton. A federal judge found Gorton and the company liable for copyright infringement and ordered the service be shut
down. Gorton,
cheap uggs who closed the service down
in October, later paid RIAA members $105 million in damages. NPD reported that the percentage of Internet users who download
music via P2P services in the fourth quarter of 2010 was 9 percent. For the same period three years earlier, the percentage
of users downloading via P2P was 16 percent.
