Archive for: report

Digital Music Rides High in 2009 – Neilsen Soundscan Report

Neilsen gathers information from both bricks and mortar and online stores in the US, and has released a full report of music sales in 2009. The album charts are more or less what you might expect, apart from the last minute addition of Susan Boyle, who sold almost as much in the 5 weeks after her debut was released as Taylor Swift, the next biggest selling artist of 2009.  Michael Jackson’s death in the Summer undoubtedly caused his high chart position, but dear old Lady Gaga has smashed into the number 4 position from practically a standing start. Shows what you can achieve if you’re prepared to take your clothes off in a college bar, dole out some pizza and start selling your hair.

Best Selling Albums 2009

1. Fearless / Taylor Swift ~ 3,217,000
2. I Dreamed a Dream / Susan Boyle ~ 3,104,000
3. Number Ones / Michael Jackson ~ 2,355,000
4. The Fame / Lady Gaga ~ 2,238,000
5. My Christmas / Andrea Bocelli ~ 2,207,000
6. Hannah Montana: The Movie (soundtrack) / Hannah Montana ~ 1,823,000
7. The E.N.D. / Black Eyed Peas ~ 1,787,000
8. Relapse / Eminem ~ 1,735,000
9. The Blueprint 3 / Jay-Z ~ 1,515,000
10. Only by the Night / Kings of Leon ~ 1,398,000

In terms of an artists’ overall units, rather than single albums, MJ topped the list, with the Beatles (whose catalogue is owned by the Jackson estate) making a surprise appearance at number 3, presumably supported by their Rock Band license deal.

2009 TOP TEN SELLING ARTISTS

(based on Album sales from 12/29/2008-1/3/2010)

1. Michael Jackson  ~   8,286,000
2. Taylor Swift     ~    4,643,000
3. Beatles    ~     3,282,000
4. Susan Boyle    ~     3,104,000
5. Lady Gaga     ~    2,813,000
6. Andrea Bocelli    ~     2,668,000
7. Michael Buble     ~    2,280,000
8. Eminem       ~      2,166,000
9. Carrie Underwood   ~    1,895,000
10. Black Eyed Peas   ~   1,881,000

Another widely expected, but still pleasing phenomenon is that while the CD slides sickeningly into obscurity, vinyl sales are up: 33% in a single year, to 2.5 million albums. The Beatles and Jackson feature high on the list in the vibyl format, resting on a bed of heavy listening, serious music fan music like Fleet Foxxes, Animal Collective and Radiohead.

2009 TOP TEN VINYL ALBUMS
(12/29/2008-1/3/2010)

Abbey Road/ Beatles       ~       34,800
Thriller/ Michael Jackson      ~       29,800
Merriweather Post Pavilion/Animal Collective  ~   14,000
Wilco/ Wilco        ~       13,200
Fleet Foxes/ Fleet Foxes       ~      12,700
Backspacer/ Pearl Jam         ~        12,500
Veckatimest/ Grizzly Bear       ~      11,600
Appetite for Destruction/ Guns N’ Roses    ~     11,500
Big Whiskey & the…/Dave Matthews Band    ~    11,500
In Rainbows/ Radiohead         ~        11,400

2009 TOP TEN VINYL ARTISTS
(based on vinyl album sales from 12/29/2008 – 1/3/2010)

Radiohead       ~      45,700
Beatles       ~      38,800
Michael Jackson    ~     30,400
Metallica       ~      30,200
Wilco          ~       29,600
Bob Dylan       ~      24,500
Animal Collective     ~    20,600
Pearl Jam       ~      19,900
Bon Iver       ~      17,100
Iron & Wine      ~       16,600

Digital Music Stores Compared

A lot of people get in touch with us to ask how many digital stores we distribute music to, and what proportion of the digital music market they represent. We also hear comments on the relatively small number of people we deal with in comparison to the huge lists of partners at some of our competitors, e.g. CDbaby, Emubands, IODA…(without mentioning the duplication in the last two).

The simple truth is that while a long list of digital music stores might look good, beyond the top 3 or 4 retailers it makes very little difference to overall sales how many your music’s in. It’s fairly common knowledge that iTunes is the biggest player in the market, but the scale of their dominance is pretty staggering. Neilsen (the ratings and market reporting firm) reports total US music sales of 1,513 million units in 2008, with 1070 million of those sales being digital downloads. That’s a billion digital music downloads across the entire US.

In 2008, across all territories, iTunes sold more than Two Billion tracks.

Apple iTunes Store Music Sales
Date	Tracks Sold (Millions)
01/08/2004	100
16/12/2004	200
02/03/2005	300
10/05/2005	400
18/07/2005	500
10/01/2006	850
23/02/2006	1,000
12/09/2006	1,500
10/01/2007	2,000
09/04/2007	2,500
31/07/2007	3,000
15/01/2008	4,000
19/06/2008	5,000
06/01/2009	6,000

Excuse the horrid old excel graph, I’m still running Office ’03…

It’s difficult to get a believable estimate for the size of the global digital music market, but given that the USA is the biggest single economy by a long way (the whole of the EU only just beats it in the CIA factbook at $14.98 trillion to $14.58 trillion), you begin to get a picture of how much of a monopoly iTunes has. Their competitors are of a different order: Amazon weighed in at 27 million digital tracks sold in the first six months of 2008, and the CEO of eMusic (David Pakman) estimated that Amazon have got about 4%-5% of the US music market, which going from Neilsen’s estimates puts them at about 48,150,000 tracks annually. Pakman also claims an approx. 10%-15% market share for eMusic, with 7 million downloads sold monthly (7*12 = 84).

By browsing eMusic’s sales milestone press releases, you can plot a rough course for their sales:

eMusic Digital Music Sales
Date	Tracks Sold (Millions)
01/09/2004	0
01/12/2004	3
01/12/2006	100
25/09/2007	160
14/04/2008	200
20/11/2008	250

I’ll spare you another ugly graph. eMusic has sold 250 million tracks since it’s relaunch in 2004, and Amazon’s only been going for about a year now, 300 million tracks let’s say, which pales beside iTunes’ 6 billion total sales.

One can argue with the estimates, but the main thrust of my argument is hopefully becoming clear. A conservative 15% market share between Amazon and eMusic, along with iTunes’ >80% doesn’t leave more than 5% for any other players in the USA: with just those three selling your music for you online, you’ve got 95% of the market covered. It’s not that the remaining 5% isn’t worth catering to, but the law of diminishing returns kicks in, and customers in the last few percentiles get harder and harder to chase down, especially given the plethora of blossoming and failing little music shops that appear and dissappear. We concentrate our efforts on the vendors that matter.

P.S.

The controversial bulk of music discovery and consumption in the electronic wilderness, outside the paid-for enclosure, is happening on torrent sites like the embattled Pirate Bay, and the more respectable Limewire and Mininova, and promoting RouteNote artists on these channels is something we’re looking into. Ubiquitous innovator Trent Reznor or NIN positively encourages people to download his music from P2P networks, in order to drive sales of his ‘premium’ paid for content.

Universal Music, Are They Starting To Adopt Digital Business Models Correctly?

In the last year or so it has been tough times for the major record labels. The majors have not really been moving into the digital as fast as they should, whilst at the same time not understanding the digital business models.

Whilst this still remains the case Universal have released their lastest quarters results, and they seem very surprising to me.

• $3.97 billion revenue for first 3Q’s of ’08
• + 3.5% without currency fluctuations
• + 33% for digital sales which “”more than offset” lower CD sales
• Earnings 21.8% to $516M before deduction of interest, tax and amortization
• Net is lower due to restructuring costs
• Full press release