I was inspired by Peter Kafka’s piece on the music business in Allthings D yesterday. Peter points out a few bright and shiny spots in an overall dismal picture for the industry as it continues to trade analog dollars for digital pennies:
- U.S. music sales, by unit, are up 1.6% for the year-to date
- Warner music reported an increase in sales this year
- The Beatles released their catalog in the fall of 2010 on iTunes
So, while it’s not all doom and gloom in the music business, there is a plethora of evidence that the bottom is still yet to come. This year has seen two all-time record low weeks for the #1 spot on the SoundScan charts: Cake, then Amos Lee both topped the charts at record-low numbers within three weeks of each other.
So where’s the innovation?
With the advent of digital music distribution, one innovation that I haven’t seen yet but that I’m curious to see explored, is album length and release timing. The industry continues to release LP albums based on a production cycle that used to involve larger budgets and longer lead times. It’s a bit of a chicken-or-the-egg subject, but I think the industry is driven to maintain this because their metrics haven’t changed yet. Here’s SoundSan’s recent reporting:
Total Albums w/TEA +1.6% (Track Equivalent Albums)
Overall Albums -1.5%
Physical Albums -8.3%
Digital Albums +16.8%
Digital Tracks +9.6%
This is reporting the metrics of an old business that still sells music in ten-twelve track bundles. Long form albums are a product of analog technology and year-long production / marketing cycles. With the adoption of digital media, short-lead press, social media, Internet radio and digital production techniques, albums should cost slightly less to make and a lot less to market. Why can’t artists start releasing five-track albums every quarter? The old cost-restrictions no longer apply in the digital world.
You Can’t Survive on Legacy
One other observation: if you notice the catalog sales growth in the stats above, and look at it against the increases in digital tracks and albums, another issue becomes apparent. The music industry is still surviving on catalog sales, which can’t last forever and won’t drive future growth. Michael Jackson and The Beatles are certainly timeless, but won’t float the industry until the end of time.
Even Concerts Are Innovating Ahead of Albums
Relevant to the music innovation conversation, I think the new Groupon/Live Nation partnership is a fantastic example of innovation for the concert industry that I plan to use often, assuming that Live Nation puts its money where it’s mouth is and actually provides decent inventory. Check it out: