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Oct 19, 2010

The state of the music industry

Yesterday independent music distributors Shock Records (one of the best, most efficient groups we deal with here at Johnnys) sent around a press release noting the success of o

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Yesterday independent music distributors Shock Records (one of the best, most efficient groups we deal with here at Johnnys) sent around a press release noting the success of one of their acts:


bring me horizonIn an industry where times are tough and naysayers are plentiful, Shock Records has recently seen stalwart acts, defiant of trends and gimmicks rise to the forefront. Just three months ago Byron Bay band Parkway Drive stormed the ARIA charts to arrive at a number two debut. To many it was an unexpected ambush but at Shock we have no reservations about the power of the punk/hardcore releases that we have become so well known for.

So it is with great delight that we announce that Sheffield metalcore band Bring Me The Horizon’s THERE IS A HELL BELIEVE ME IVE SEEN IT, THERE IS A HEAVEN LETS KEEP IT A SECRET has secured the NUMBER ONE position on this week’s ARIA Chart, thus delivering Shock Records it’s third ever ARIA number one album (The Offspring’s seminal punk rock release Smash, being the first).

Quite right that they should acknowledge this success, but it is interesting to note a news story this morning that kind of redefines what “success” means in the music industry these days.

The article notes:

RECORD sales in Australia have hit an alarming low with a British metal band hitting the No. 1 spot with just 3600 album sales.

British hardcore metal band Bring Me the Horizon made a surprising debut at No. 1 on the ARIA album charts yesterday, with just 3600 copies sold nationally.

This is the lowest sales to achieve a No. 1 album in Australia. The figure highlights the impact illegal downloading has had on record sales.

This is kind of breathtaking.  Back in the late seventies and early eighties when I was in music retail, working in a large record shop when the music industry was in rude good health, we would’ve sold 3600 copies of a number one album all by ourselves.

I mean, that would be a lot of copies for a single shop to sell, but we would’ve done it pretty easily on any number of albums, the obvious ones being various Floyd albums (Dark Side, The Wall); Rod Stewart’s Atlantic Crossing; Stardust by Willie Nelson; Dire Straits first album; various number ones by The Eagles or Linda Ronstadt or Fleetwood Mac and even Silk Degrees by Boz Scaggs.

The idea that the entire retail sales of a number one album in this country amounts to 3600 units almost does my head in.

As to why this is happening, well, I guess illegal downloads, as the article says, must have something to do with it, though I suspect it is much more than that.

Watching my fourteen year old son consume music, it is simply a fact that owning an album is far less of a priority for him than it was for an earlier generation.  It’s not that he is illegally downloading, it’s just that he is quite happy to watch a YouTube clip or stream a song from a MySpace page or one of any number of other of legal online outlets.

When he wants songs for his iPod, he might download a couple of tracks from iTunes, maybe even a full album, but this is fairly rare. Even rarer is when he will go into JB and buy a CD.  He does it, but only for artists he absolutely loves and not that often.

There was a particular mindset and a set of technological limitations that drove earlier generations to buy albums and/or singles that simply doesn’t exist any more.  In fact, it is quite interesting to think about that relationship — between the extant technology and the way that translated into particular consumer choices.

I guess it boils down to basic economics: the new technologies mean that labels/distributors simply can’t control the supply of their product in the way that they used to.  Demand is being met in a way that they can’t make a big buck out of any more.

You can’t help but think it’s a crappy time to be a musician but a great time to be a customer.

Thirty-six hundred copies to get to number one?  Amazing…

PS: The other thing about all this is that it renders the very idea of a “chart” meaningless.  I mean, how many copies to the number twenty album sell?  The industry needs to think of a better way to generate excitement.

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16 thoughts on “The state of the music industry

  1. Stephen Green

    There’s a few points I’d like to make (as someone working in the music industry) to some of the points raised.

    1. The person saying that digital saves everyone and who cares about CDs anyway….. the chart figure includes digital sales.
    2. To those saying that artists have never had it better, try looking beyond the easy headlines. The artists who grew up in the OLD music economy where the record companies have already made them stars ARE doing much better because they reap the rewards of being able to negotiate awesome record deals or remaining independent and DON’T have the expense of needing to break into the marketplace, but what about the new artists? People are rightly observing that there’s not a lot put into artist development anymore and why would there be if the chances of getting to number one are slim at best and if you do, you make bugger all anyway? The problem is that while artists make a heap more cash by touring and selling merch (as has always been the way), the payoff for making less on the records was that the record companies did all their marketing for them. You went to the Pink Floyd concert because you heard them on the radio or saw them on TV and who footed the bill for that? The record company. So now there’s a situation quickly rising where record companies are either slimming down or disappearing to the point where there’s far less chance for an artist to have their marketing subsidised. To head off the argument that you don’t need money now because you can market on the internet, that’s only partly true (I run a new media marketing company, so I have a fair idea of what does and doesn’t work online). New media is a brilliant outlet, particularly to build a buzz and push a campaign forward, but if you want platinum sales, I defy you to do it with no traditional media. These days, if you are a new artist and want to have a hope of selling out the entertainment centre, then you can, but you need to pay your own marketing. John Butler is a great example of an artist who keeps all the profits and pays his own marketing and all other expenses and does very well out of it. But there is a cost, and its a huge cost that not every artist can or chooses to bear themselves. For sure there’s a new economy opening up and the industry is being turned on its head, but removing a record company from the equation will have financial ramifications on artists that are far more than the headlines of “artists have never been better off” that people like to tout. In a free market, don’t you think that if the record companies seriously ripped artists off for absolutely no benefit to the artist, that something else wouldn’t have come along? Why now when the independent road is so available (and I actually think its a brilliant road), do artists still look to major labels to release their material? Artists CHOOSE this because THEY see a benefit, so there must be a reason and no offence, but they who are negotiating the deal probably know better than you do. It’s their music, it’s their choice. I really get offended by people who suggest that they know better than the artists they purport to support so will rip off their music but justify to themselves that they are helping by buying the concert ticket they were going to buy anyway. It’s very possible to market and build an audience yourself, but if you choose to outsource, why is that not possible?
    3. “funny how the old stuff still sells”. It actually doesn’t. If it did, then Rod Stewart and Santana would be number one, not an unknown metal band.
    4. I reckon both Gudinski and Handlin care a LOT.
    5. Getting rid of the chart? No way! Then how would media know what to play and write about? Surely you’re not suggesting that radio music directors and mainstream journalists use their knowledge and experience to choose music that they believe will resonate with their listeners/viewers BEFORE someone else tells them it does? Now you’re talking crazy talk.
    6. Absolutely agree with the person that said about cathedral builders. If music isn’t viable, then the market will take care of it. The fact I make my money in the music industry is not a right and if my position disappears, then the market has spoken. Just don’t expect a GREATER quality of music to come from an industry with less investment to make in creating it.

  2. Johnfromplanetearth

    It might have a lot to do with the fact that so much stuff being released is pure drivel!
    Linkin Park and Kings Of Leon have just released new albums that are very ordinary at best. Who really wants to listen to a whole album of Katy Perry? While people like Michael Gudinski was selling his remaining 51% of Mushroom as a protest at the Governments new parallel import laws he should have been focusing on the effect new technologies were going to have on the new generation of music consumers. A whole new generation out there now do not know the joys of actually owning the product, looking at the cover, reading the liner notes and being a part of the artists vision of the work, and when they do they get crap like Linkin Park and Kings Of Leon who have both done much better work than their most recent efforts. I wonder if they care? The Big Day Out sells out in 5 minutes with a mediocre line up, you could have 3 bands up there farting for 45minutes and people would turn up because music is not the main reason you go to the Big Day Out anymore. It’s an alcohol and drug festival these days. Illegal downloads, crap bands and the massive closure of venues around the country have ended it all. People will still go to an event, they just won’t buy the whole album anymore. It still amazes me that 50 year old frump from Blackpool was the biggest seller in 2009!! Michael Buble sells bucketloads singing old standards? Rod Stewart has Songbook V out this week singing…old standards! Santana released a new album 2 weeks ago playing classic rock songs! Funny how the old stuff still sells and the new is just not happening. One of the best albums of the year is the new Arcade Fire album, it sold for about 2 weeks, it will be in bargain bins before Christmas! Make the new releases $10 retail and you might start seeing some sales close to 100,000 again! It won’t bother Gudinski in Toorak or Handlin on the North Shore! They both don’t give a stuff!

  3. Adam

    I agree with Trevor. I really do think that thanks to the internet in this day and age bands have never been better off. Most bands have never relied too heavily on album sales due to the rude percentage of the sale they get (around 10% I think) and most make their money through touring and playing live shows. The exposure bands can get through Myspace and what not these days is far greater than in the past.

    Bands are now not as beholden to the big major labels these days as they were in the past. So many independent niche labels have sprung up in this day & age. Look at a label like Ipecac Recordings owned by the legendary Mike Patton of Faith No More fame, they have a great stable of unique bands & artists putting out consistently original music over the last decade or so and also have an Oz distribution deal through Shock. They return a far greater percentage of album sales to their bands but in return trade off of the reputation of the label by doing minimal to zero advertising to keep costs down.

    It’s just a different time now I mean I used to love going into Big Star and getting CD’s (especially in their second hand section in the basement) but then a JB pops up selling albums $7-$8 cheaper than they did and now sadly Big Star is no more. I know JB do massive business and are a billion dollar company who’s CEO is considered one of the best CEO’s in the country but then they too will have to start reducing prices to compete with the likes of Amazon. With the aussie dollar so high it’s cheaper to buy CD’s/DVD’s through Amazon than at JB now even after factoring in shipping costs.

    I’m with Trevor in that I think it’s the middle men who used to bleed the bands dry who are not doing as well as they used to but a savvy band can garner a greater audience (especially around the world) these days than previously thanks to the internet.

  4. ggm

    Q: what have farmers, miners and the music industry got in common?
    A: a sense that they’re owed a living irrespective of the change in economic circumstances.


    PS I don’t download. I do buy secondhand, and itunes. I know that my purchases have declining value to the artist, I also know that culture dies on economic rationalist arguments. Notably few fresco artists around these days, likewise cathedral builders. I don’t like that, I’d love both to flourish but patronism is in short supply. Maybe we need to make Murdoch a new pope?

    I resent having to buy the same music for each format conversion. I don’t think the remixes justify it (I doubt beatle john would have liked what beatle paul did, and its clear the zep remix was a total f*ckup). I have enough LPs in playable condition I can and do make my own MP3s, but thats hardly helping the income stream.

    OTOH I bought Derek Han’s 3CD set at the concertegebouw for EUR10, and was delighted to do so. The ticket was only EUR25 to start with. Queensland Performing Arts venues could think a LOT about that because I haven’t seen a decent first-rank performance under $AUD 90 in years.

    Clapton for $160 at Boondal was a waste of money.

    Good local brissie bands can be seen for very low $ in the declining venues we have left. Who got rid of Brisbane’s festival hall? Why did the council do this, after cloudland?

    The future of music should be sessions in the pub. It might not earn a living but its a damn sight closer to my heart than a mixing desk.


  5. nw

    Hey man,

    I was thinking about what motivates people to buy tangible mediums of music, like records and cd’s etc and why that could be in decline at the moment, here’s what I came up with.
    – We’ve been taught by record companies for the past 20 years that content is next to unimportant in record company’s list of priorities. A quick glance at video hits on a saturday morning illustrates this very quickly.
    – Time and money are not spent by record companies on music with lasting, artistic qualities, its simple, the product being sold is less good.
    – The physical product being bought, predominantly CD’s are redundant. Why would you buy something which a) is as fragile as a CD, b) is uninspiring, plastic, generally poorly printed and too small to see the artwork and c) outdated by faster, more convenient versions of the same digital stuff on CD’s but more easily accessible?

    Don’t get me wrong there are moral and nostalgic motivations to purchasing CD’s (I guiltily buy CD’s of my favourite artists) but the purchasing experience doesn’t offer any real VALUE to us the consumers. I NEVER buy a CD and feel inspired by what I am holding, sure the music might (and often is) great but what then? I love the process Wilco went through to bring us their most recent http://wilcoworld.net/records/disco.php album, releasing electronic versions and an INCREDIBLE vinyl LP sold on the website and shipped upon release.

    I’d love to see some focus on quality from the big labels, some value given to their products and maybe then we might see more sense in participating more happily.


  6. Trevor Nowak

    Its a crappy time to be an ARIA chart topping artist sure, but musician… I don’t think so.


    (yes I know its on a torrent friendly site and hence they would say that, but I’ve read similar else where this was just the first, similar article google returned)

    So thanks to the Internet musicians are actually doing better. The middle men who use to make a killing selling other peoples stuff… well, not so much.

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