We are part of the digital age where we can sale, create
businesses, and even meet people online. The digital age has made a big
progress for society in so many ways, and has helped independent artists and musicians
to get ahead of the game competing with the big conglomerate networks. Before iTunes
and YouTube, an artist need it to be signed to a record label to get
distribution and promotion through radio and network channels. Now anyone can
be heard, be seen, become “YouTube Famous,” or popular online through social
media channels like Vine, Twitter, and Instagram (just to name a few); you only
need a camera, show some type of talents, and mainly have an interesting
personality.
At the same time, digital age has affected the overall music
industry through piracy. The creation of Napster in 1999, lead the way for people
to pirate music and a big decline in music sales in the overall industry. In
2000, According to the Recording Industry Association of America (RIAA), the
music industry were making 13.36 billion dollars in album sales, but by 2014,
the sales dropped to less than 4 billion dollars. The decline in sales
represent a 76% of loss for the industry.
Source: RIAA Year-End Industry Shipment and Revenue Statistics (2000-2014)
The music industry has had a share of waves in changes for
the way music has been consumed through 2000 to now. Consumer behavior for consumption
in the digital market started shifting from 2005 where it dominated the music
for phones, like ringtones and ring back, until 2008 with a sudden collapse of this
sales. Digital sales of music started booming until 2013 where consumers
started shifting to revenues from ad-supported music streaming and subscriptions
base services. RIAA estimated that 7.7 million internet users paid for on-demand
streaming in 2014.
Source: Pixabay
Music sales have dropped dramatically, but is music
streaming helping the industry? In 2015, music streaming sites helped to boost
digital sales by 6.9%, and finally the industry sees a stop to the catastrophic
decline in revenues for music sales. Japan, the second world’s largest music
market, for the first time in five years, had a growth in digital revenue.
In America, by 2015, most of the revenue came from streaming
with a 34.3%, Digital downloads accounted for 34%, 28.8% for Physical sales,
and 2.9% from Synch. Physical sales is still the number one choice for consumers
in other markets like in Japan where 78% of the music sales revenue comes from
CDs, Germany physical sales of CD’s account for 70% of the revenue, and in Africa
they get 62% from physical sales.
Opinion – Consumers now has the option to choose to buy a
single, before you would need to buy the entire album to listen to your favorite
song from the artist. You didn’t had the option to listen to the songs whenever
you wanted, only listen it in the radio. All this pushed consumers to obtain
the CDs, but now there is no incentive to buy the entire album, with exception
of just being a supportive fan. So if a consumer only bough one song instead of
the 10, that’s a 90% loss. The music executives’ needs to find this incentives
to give to consumers to buy the entire album, whether eliminating some of the current
digital options and loss part of the streaming revenue with hopes consumers
would have the incentive to buy, or find new incentives to give the consumers
to buy the entire album.
Main Photo source: Pixabay
By Christian Gabriel
