2006 was a great year for the music business and an okay year for the record business. It is interesting how an industry that exists on such an exciting and hot product can be luke warm in its approach and down right chilly in the results.
Record companies are still struggling to grasp the future of digital downloads, while all signs are pointing to diminishing hard copy sales, fast approaching extinction. Brick and mortar record stores are becoming a thing of the past. Soon, they will be as difficult to find as a 45. Remember those?
Downloads rose 65% over last year. Although that is down from a 150% increase in 2005, there isn’t a business model in the world that would predict an increase of such drastic proportions. It’s growth other industries can only dream of.
Nielsen SoundScan tracks music purchases in the US exceeding 1 billion units for the second year in a row. 1.2 billion units were sold in 2006. That includes albums, singles, music videos and digital tracks. This reflects a 19% increase over the previous year.
A telling item in this multitude of figures is Album Sales. Albums, and this includes digital downloads, fell nearly 5% from a year ago. This, while individual downloads increased 40%. It proves that the audience remains unsatisfied with the quality of most albums. Record buyers still find their favorite songs, they just don’t find as many on individual albums.
It seems like such a simple thing: make better records. If it were just that easy.
Breaking records is much more difficult than in the past. With the restrictions on promotion now in place at all major labels, throwing product at the wall to see which will stick just doesn’t work any longer. Radio programmers are increasingly reluctant (if allowed) to go out on a limb and play new music. It’s a statement of fact that more new music is broken on the Internet than on radio.
However, there is a light, if only a vague one, on the horizon. Radio companies are cutting back (yet again) on expenses of individual stations. The biggest cutback this year will occur in the line item entitled: Call Out Research. The bane of both industries, call out research is going to be diminished significantly at most major chains. Some stations won’t do it at all for new music, only for oldies.
With the changing landscape comes the search for more information to provide a perfect picture for songs that should be programmed. That is why Music Biz is taking significant steps to better reflect the environment. Reporting industry news and gossip, although fun and entertaining, doesn’t really get the job done. What programmers want to know is, “Which records should I be playing.” What record company executives want to know is, “How do I get my message to programmers.” Music Biz will endeavor to do both.
With strategic partners unlike any other source, Music Biz will begin delivering a daily informational piece that covers sales, Internet activity, music in alternative medias (movies, TV shows, etc.), iTune action, BDS actual plays, uTube and myspace hits and downloads, plus a variety of other pieces of information to provide programmers with instant information that will help make decisions more informed, if not easier.
We welcome your feedback as we try to improve our resources to make Music Biz your source for information vital to the success of our industries.