A new digital status quo for artists and the record industry
Are artists and labels ready for how changes in people consume music is going to further hit their bottom line?
The following may well be the scariest words any record label exec or music act will read this week: “digital tracks sales are on the decline and the trend is accelerating”
That’s how Billboard opened its news story on the latest US sales figures. In the words of Status Quo, it’s all down, down, deeper and down with nearly every single possible stat for sales of digital product on the slide.
Yet, at the same time, music has never been so popular with an abundance of streaming services now very much in vogue. Surely this can only be a good thing as fans flock to ad-supported services to hear music and the labels and acts benefit from these deals?
The problem is the amount of cash the interested parties are receiving from the various services is not quite as good as the money from downloads. And, as we all know, the take from downloads is nowhere near as good as the take from physical sales. With every change in music consumption, the price point has got lower and the revenue for labels and acts has fallen.
You have to hope that the label reps who did the deals with Spotify and their peers were prescient about the changes that were coming down the track. While there’s been a lot of vexed fuming about the low payouts which eventually dribble down to the acts, you can be sure the streaming services are handing over a whole lot more in the first instance before it’s divvied up.
Maybe, though, we’re underestimating the labels. After all, Jay-Z did a canny deal for himself with Samsung, netting way more than he would from iTunes or Spotify for his new album “Magna Carta Holy Grail”. Wonder was he as tough a negotiator with telecoms and tech companies when he was the main man at Def Jam?