More evidence: Streaming music is the future

I hadn’t planned on writing three blog posts in a row about how music consumption is changing. But it’s becoming more apparent that 2014 will be remembered as the year when internet streaming took over as the clear favorite way to listen to music, elbowing its way past a relatively new format – buying digital downloads – and older physical media, such as compact discs and vinyl LPs, which are still occupy a niche.

The latest news in this evolution came Nov. 19, when Billboard, which has been tracking music popularity since before there were records or tapes, announced it will make a major expansion into the digital realm. The entertainment magazine made this announcement on its website: “The Billboard 200 albums chart will premiere its biggest upgrade in more than 23 years, transforming from a pure sales-based ranking to one measuring multi-metric consumption.

“Beginning with the top 10 revealed on Wednesday, Dec. 3, on Billboard.com … the chart, which currently tracks the top 200 albums of the week by sales alone, will be the first to include on-demand streaming and digital track sales (as measured by Nielsen Entertainment) by way of a new algorithm. It is the most substantial methodology update since May 1991, when Billboard first used Nielsen's point-of-sale data -- SoundScan -- to measure album sales.”

“The new methodology aims to provide a better sense of an album's popularity by reflecting not just sales, but consumption activity,” says Billboard. 

Billboard has already been counting streaming sources for songs. Its Hot 100 chart of song rankings is based on digital download sales, radio airplay, and internet streaming. But until now album ratings have been based solely on sales. The updated chart will calculate album equivalents for downloads and streaming music by using “accepted industry benchmarks”: 10 digital track sales from an album, or 1,500 song streams from an album, will be considered the equal of one album sale.

Billboard first started reporting on music sales more than 100 years ago, according to Wikipedia. In 1913, the magazine ran charts for sheet music sales and top songs in Vaudeville theaters.

Billboard’s announcement is another sign of the growing consumption of internet streaming of music. Over the first half of 2014, streaming music’s share of total music consumption almost equaled physical formats such as CDs and vinyl. Streaming had 27 percent of total consumption, physical formats 28 percent. Digital downloads led both of those formats with 41 percent. But consumption of streaming music is growing rapidly, while downloads and CDs are going the other direction. Nearly 80 percent of music fans say they have streamed music in the past six months, according to a Nielsen Entertainment.

For this longtime music fan, making the switch to a new musical format isn’t new. Since the late 1960s, I’ve consumed music as vinyl LPs, 45-rpm singles, eight-track tapes, cassette tapes, and compact discs. In the early ‘90s I converted a huge collection of vinyl (1,000 LPs) to compact disc. This year, I’ve been busy ripping a collection of 2,000 CDs, converting them into lossless FLAC files on a computer hard drive.

About the time I finish that chore, everyone will be listening to streaming music. 

Anybody else out there playing catch-up?

Sources:

Billboard 200 Makeover: Album Chart to Incorporate Streams & Track Sales. Nov. 19, 2014. Accessed at billboard.com website:

http://www.billboard.com/articles/columns/chart-beat/6320099/billboard-200-makeover-streams-digital-tracks

The times ARE a changing in the music biz. Artists told to embrace it

Yes, streaming music is the future of music consumption.

No, that doesn’t mean that royalties to artists will dry up.

In fact, many artists who are not as big as Taylor Swift should be able to take advantage of new possibilities created by streaming music, such as helping them find and cultivate a fan base.

This whole transition from CDs and permanent downloads to streaming music is likely to take a few more years to run its course.

These are some of the takeaway messages from a fascinating article on the CNet website by author Joan E. Solsman  titled “Attention, Artists: Streaming music is the Inescapable Future. Embrace It.” The entire article is well worth reading. A link is below.

Solsman’s article responds to the news last week from Taylor Swift, who pulled her new album, “1989,” and all her back catalog from Spotify, a popular music streaming service that is available in both free and paid subscription versions. Swift has complained about the small share of revenues that are trickling down to the musical artists. Several other hugely popular artists, including Jimmy Buffet, have aired similar gripes.

For a look at how quickly streaming musical services have gained a larger share of total U.S. music industry revenues in the first half of 2014, have a look at the Recording Industry of America (RIAA) mid-year report, also linked below. Total streaming services bring in about the same amount of revenue as physical music formats, such as CDs. Streaming accounted for 27 percent of the pie, physical formats 28 percent, and permanent downloads (think iTunes) have the biggest share at 41 percent. But streaming music’s share has been growing rapidly in recent years, while CDs and downloads have been shrinking.

Solsman’s article on CNet makes several important points:

First, artist royalties may be small now, but will get much larger as the music-listening public continues to make the transition to streaming music. When CDs began replacing vinyl LPs, they didn’t produce much in the way of royalties, either.

Second, artists have always made less money from recordings than from merchandise, touring and sponsorship, and that’s still the case. “Streaming actually bolsters those,” according to Solsman. Streaming and the audience data it produces can allow enterprising artists to take advantage of opportunities to target certain concert venues, as well as market opportunities for fans to have personal experiences with artists.

Third, streaming services offer the artist instant access to massive worldwide audiences, which was harder for smaller, independent artists to attain when exposure depended on making physical product available for sale.

As I said, the entire article is well worth reading. It paints a convincing picture of a future music industry that makes not guarantees to struggling, young artists, as has always been the case. Hell, there aren’t any guarantees for established or famous artists, either. But the changing landscape opens up opportunities that weren’t there before, especially for new, independent artists.

Sources:

Attention, Artists: Streaming music is the Inescapable Future. Embrace It by Joan E. Solsman. Nov. 14, 2014. Accessed at CNet: http://www.cnet.com/news/attention-artists-streaming-music-is-the-inescapable-future-embrace-it/

News and Notes on 2014 Mid-Year RIAA Shipment and Revenue Statistics. Joshua P. Friedlander, Vice President, Strategic Data Analysis, RIAA. Accessed at: http://www.musicrow.com/wp-content/uploads/2014/09/RIAA-2014-Mid-Year-shipments-memo-and-2-yr-table.pdf

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

The Allman Brothers call it a career

A long, strange yet remarkable chapter in the history of popular music ended early the morning of Oct. 29. The Allman Brothers Band played the last encore of its last concert ever, capping a 45-year, off-and-on career marked by the deaths of two original members, All-World guitarist Duane Allman and bass guitarist Berry Oakley, and the firing of a third founder, co-lead guitarist Dickey Betts. Between 1969 and 2014 the Allman Brothers Band also experienced other personnel comings and goings, as well as drugs, celebrity marriage and divorce, decline, dissolution, redemption, and a resurgence over the past decade during which they played their improvisational blend of rock, blues and jazz with as much fire and daring as the early, glory days.

The Allman brothers formed in March 1969. They were just achieving creative and commercial breakthroughs by 1971, when Allman died in a motorcycle accident. Oakley died on a motorcycle a year later. The band might have folded. But Allman was replaced by a pianist, the gifted Chuck Leavell, and Lamar Williams filled Oakley’s bass seat. The newcomers joined original singer-keyboardist Gregg Allman, guitarist Dickey Betts, and drummers Butch Trucks and Jai Johanny Johanson, and by 1973 the band had its biggest hit, “Ramblin’ Man,” as well as the reputation and fame to headline stadium shows and massive rock festivals. But wealth and celebrity soon helped blow out their creative spark amid drugs, betrayal, and conflicting loyalties.

The Allman Brothers Band spent much of the 1980s on hiatus while some of the members pursued solo projects. In 1989 they re-emerged. With Allman, Betts, Trucks and Johanson joined by new second guitarist Warren Haynes, bassist Allen Woody and percussionist Marc Quinones, a re-energized band issued several studio and live albums in the ‘90s. But they couldn’t tolerate success again, and by the turn of the century, Haynes and Woody had left and Betts had been fired.

Yet the Allman Brothers Band reinvented itself again. Betts was replaced by Derek Trucks, the young nephew of Butch Trucks. Haynes returned, and bass guitarist Oteil Burbridge joined Quinones, Gregg Allmann, Trucks and Johanson. Their 2003 release “Hittin’ the Note” might have been their best album since 1973. They released a series of archival concert recordings from the early 1970s, some of which were very nearly as good as the classic 1971 “Live at Fillmore East.” And they have been releasing pristine-sounding CDs of virtually every concert they have played in recent years. A fan can go on their website today and order a box set of their entire last stand of shows at New York’s Beacon Theatre. As I write this, I’m waiting for my mail carrier to deliver a 3-CD set of the final concert, which according to several published reviews was marked by fiery and precise playing and singing matched only by a few concerts over the decades.

So this time, it appears that the reports of the death of the Allman Brothers Band will stick.

A fan video (not professional quality) of “Blue Sky” from the Allman Brothers’ final week of shows at the Beacon Theatre at New York:

Sources:

Allmusic.com: http://www.allmusic.com/artist/the-allman-brothers-band-mn0000745964

Allman Brothers Band website: http://www.allmanbrothersband.com/

Paul, Alan: Allman Brothers put focus on Duane at final Beacon Theatre Show”  posted Oct. 29, 2014, at Billboard.com: http://www.billboard.com/articles/news/6297018/allman-brothers-band-final-beacon-theatre-show-new-york