In Shift to Streaming, Music Business Has Lost Billions

[oblique strategies]

http://www.nytimes.com/2016/03/25/busin ... s.com&_r=2

[Tarekith]

Interesting that vinyl generated more royalties than streaming, that really puts things in perspective.

[chrk]

Interesting that vinyl generated more royalties than streaming, that really puts things in perspective.

Read that again:

For instance, the growing but still specialized market for vinyl records is generating more revenue than the music on YouTube, one of the biggest destinations on the Internet, but that’s because YouTube pays royalties in the tiniest fractions of cents.

On-Demand Streaming (Ad-Supported): revenue from royalties M$385.1
LP/EP: M units shipped 16.9, revenue M$416.2
while the paid subscription alone generated M$1,218.9 through 10.8 M "annual average number of subscriptions"
Numbers from the original RIAA press release.

I think the real perspective lies in the number of music consumers reached through the ad-supported streaming (like Youtube) versus the pennies (or fractions therof) those services pay.

[Tarekith]

That's exactly what I thought was interesting, not the sheer numbers of units sold or streams. The difference in revenue payouts are huge, and I think this puts that into context nicely.

[doghouse]

When Napster first started all the controversy over online music many predicted this would benefit musicians. Instead the new delivery systems pay out even less.

Meet the new boss, same as the old boss.

PS the vinyl comeback is sweet for the record labels. An LP only cost about $9 at the dawn of the CD era, today they cost $25 and up, some are over $40. Meanwhile CD prices are still about $15, which was considered exorbitant at first.

[chrk]

PS the vinyl comeback is sweet for the record labels.

It's actually starting to backflip on the labels, especially the smaller ones. The whole foodchain of the manufacturing industry simply isn't there anymore. There's not many firms producing laquer masters, the last lathes must have been made in the late 1980s, pressing plants have been reduced to a handful worldwide... now, those are thriving. But they hardly really expand, since no one is prepared to provide the machinery they need on short notice.

[granted]

All it will take is a 3D printer that can print LPs. If there isn't one already.

[sonik777]

Sorry, but the return of vinyl as a major market is mostly a fad.


New LP’s are $15-$30, requires equipment investment, and not portable (listening wise).

The CD is half the cost, sorta portable, and most people probably have a player somewhere even if they don't use it.

Downloads are a third the cost, and portable with some minor hassle.

Streaming is essentially free, and if you have signal, portable without a second thought.

Let’s see which format wins out amongst younger consumers.


Of course there are always exceptions, and some people (hipsters) will buy the occasional one just because they think it's cool.

Hell I've got a decent turntable and over 500 LPs but rarely listen to any of them; it's just so much easier to play the digital file.

*shrug*

[Martin Gifford]

Funny to see the big acts complaining. They were way overpaid to begin with and arrogantly thought it was their right to be paid so much money.

This issue comes down to audio quality too. The last time I listened to good quality music was on an old Marantz Hifi back in the 80s. I wouldn't even know how to set up a high class audiophile system any more. What do they recommend in the audiophile shops? Is it plugging in your computer to an amp and speakers, or a CD? Vinyl? No clue.

[snakedogman]

If you want to stick with Marantz, they have something like this.
Of course you would be insane to then play mp3's on that, so I expect people who buy that would rip their CD collection to FLAC or some other lossless format, then put everything on a network drive and play through a media player like that.

Of course some people still would have a CD and/or record player as well but I'm sure that group is getting smaller and smaller.
For me, I find myself still occasionaly buying CD's. Bizarrely it's often cheaper to buy and send the physical CD as opposed to buying mp3's. Then I'll just rip to FLAC and play from my computer.

[beats me]

Only skimmed the article but I’m willing to bet that what they failed to acknowledge is the thousands upon thousands of artists who get their music to people’s ear holes without the involvement of a label and who don’t give a shit if they are making money off it. The major labels are an ever shrinking piece of the pie.

[Stromkraft]

Sorry, but the return of vinyl as a major market is mostly a fad.

You have no basis for vinyl not being or becoming a potential market. A "major market" is just silly straw man argument as no-one claimed that.

[sonik777]

Sorry, but the return of vinyl as a major market is mostly a fad.

You have no basis for vinyl not being or becoming a potential market. A "major market" is just silly straw man argument as no-one claimed that.

I also never said there wasn't a market for vinyl.

Vinyl will no doubt continue to still gain some steam for a little while before sales level off. However for most artists it's probably still going to be a niche market at best.

And who hasn't seen an article (or many) over the past couple years claiming vinyl to be the saviour of music sales?

[ark]

I once attended a talk by Andrew Odlyzko about "behavioral economics" -- the study of people's actual economic behavior (as opposed to how economists think people should behave).

He claimed that there are many industries with high fixed and low variable costs, such as theater, railroads, airlines, telephone service, and so on. In other words: It costs a lot to set up to provide a service, after which (up to a point) each new customer costs very little.

He found that all such industries had several points in common:

1) The most efficient way to manage such an industry is "differential pricing:" Different people pay different prices for the same service. Consider the phenomenon of people paying wildly different prices for adjacent seats in the same airplane.

2) When customers find out that differential pricing is in effect, they usually get angry.

3) This anger usually leads to government regulation.

We shall see whether this happens in the music industry as well.

[shlomo]

http://www.negativland.com/news/?page_id=17