For music buyers, the times they are a changin'

Digital download or streaming, Taylor?

Tipping point has become an overused phrase, in my opinion. But I also think it’s the best way to describe 2014 when it comes to how people buy music and listen to it. Recent months have seen several articles about music buying and listening preferences from industry watchers.

Links to the articles are at the end of this post, but here are the headlines:

Earlier this year, Billboardbiz.com reported that year-to-date total sales of digital albums exceeded those of CDs for the third week, a first. You might think digital albums have outsold CDs for several years, and downloads of SONGS had been surging for years. But when sales of ALBUMS are compared, digital formats didn’t quite get over the hump. There are two ways of counting digital downloads of albums, by the way. One way is to count only the downloads of entire albums. Another is to include Track Equivalent Sales, which count 10 song downloads as an album. A little over 11 million albums in each format – download and CD – in the first month of the year.

At the same time as digital albums appear to be overtaking CDs, the total sales from digital downloads is in a free fall because of streaming services such as Spotify. Midyear figures from Nielsen Soundscan showed that total album sales, digital album sales, digital track sales, and CD album sales all posted double-digit declines from the same point in 2013. On-demand streams increased by 42 percent.

The problem with streaming music services is that artists don’t get as much revenue as they do from digital or physical sales. Some artists are complaining, or taking action. Taylor Swift pulled her new album “1989,” and all her old albums, from Spotify because artists get very little of the revenue from subscriptions to streaming services.

What does it all mean?

I’m not sure there’s a common thread here. Rather, data points keep piling up that document that the way people consume information (including the way they listen to music) is changing faster than ever in the digital age. Just ask newspapers and radio stations. 

But there seem to be several trends. CDs, which have been around for about 30 years, continue to give way to other forms of music consumption. It’s unclear whether the new dominant format will be digital downloads or streaming music. Digital downloads seem to be on the decline, just a few years after their emergence as a distinct musical format. Streaming music seems poised to leave them both in the dust.

But will there be any new music to stream if all the artists are starving because they aren’t getting paid for making albums? If anybody can bring attention to that issue, and possibly change it, it’s Taylor Swift.

Sources:

CD Album Sales Fall Behind Album Downloads, Is 2014 The Year Digital Takes Over? By Keith Caulfield, Los Angeles. February 11, 2014. Accessed at: http://www.billboard.com/biz/articles/news/digital-and-mobile/5901188/cd-album-sales-fall-behind-album-downloads-is-2014-the

Digital music sales are in a free fall, as Spotify does to iTunes what iTunes did to CDs By David Holmes. July 3, 2014. Accessed at: http://pando.com/2014/07/03/digital-music-sales-are-in-a-free-fall-as-spotify-does-to-itunes-what-itunes-did-to-cds/

Nielsen Entertainment & Billboard’s 2014 Mid-Year Music Industry Report: Overall Music Consumption – Sales & Streaming Activity –Down 3.3% from Last Year. Accessed at: http://www.nielsen.com/content/dam/corporate/us/en/public%20factsheets/Soundscan/nielsen-music-2014-mid-year-us-release.pdf

Taylor Swift Pulls All Of Her Albums From Spotify By Pamela Engel. Nov. 3, 2014. Accessed at: http://www.businessinsider.com/taylor-swift-pulled-all-of-her-albums-from-spotify-2014-11#ixzz3J11et4og