Thursday, August 9, 2007

Music Sales Down Again

Vinyl outsells DVD Audio and SACD combined, RIAA gooses their numbers by adding ringtones...

By: Jerry Del Colliano

The RIAA has released their 2006 sales report for recorded music, and the downward trend continues for yet another year. Overall sales are down 0.6 percent to 12.27 billion, which is slightly misleading because the RIAA is now counting the lucrative, new market of cell phone ringtones in their overall sales numbers. Without ringtones in the mix, overall music sales slipped even further in 2006. The low-resolution, audio-only Compact Disc format continues to age, leaving today's kids buying video oriented DVDs, high-definition video games and all sorts of content for their handheld devices such as, cell phones, PDAs and beyond.

While downloaded music boomed in 2006, with 174.5 percent growth, the more profitable, physical discs, including CDs, DualDiscs, SACD, DVD-Audio and vinyl fell in sales 7.9 percent to 11.9 billion dollars. Amazingly, or not so amazingly when you consider the total lack of label support for high-resolution music, the total sales of DVD-Audio and SACD combined reached a measly 1,000,000 units versus 1,300,000 units for records sold on vinyl.

The music business, now led by Apple Computer, has taken the path of least resistance when it comes to selling music. This basically means an abandonment of selling music by the album. In doing so, they have tossed their business model in to a free fall. While music executives have been complaining of illegal downloads for ten years now, they have done little to sign landmark, new artists that define a new generation's music. Instead they rely on selling their back catalog as singles, in low-resolution, downloadable formats.

Perhaps looking at releasing music with collateral video, surround sound and other goodies on one of the HD DVD or Blu-ray formats would be worth consideration, as the discs get $20 or more from early adopters, and come complete with HDCP copy protection and one cable (HDMI) connectivity. Imagine an album mixed in surround sound being played back with HD video content on one of the 2,000,000 HDTV sets sold per month, and you can see a business model that could replace the rotting carcass known as the Compact Disc.