Music Industry: Is digital making up the difference?

(Lots of graphics and embedded text links. The source-page is worth visiting.)

The Long Tail
April 03, 2006



On Friday, the RIAA released the official sales figures for 2005. You've seen the press accounts ("Music Sales Post Their Sixth Year of Decline"), but when you look closely at the numbers it doesn't look quite as bleak as that.

I've charted it all out below. A few points to note:

* Although CD sales have fallen off a cliff, digital sales appear to be making up most of the difference. However, there are a few statistical nuances...
* In 2005, the RIAA started tracking ringtone ("mobile") and subscription (Rhapsody, et al) digital sales. In 2004, it started tracking digital download sales (iTunes, et al). Obviously there were sales in all three categories in previous years, but they just don't show up in these numbers. So 2005 looks slightly better than it really is.
* Nevertheless, those distortions aren't huge. In revenue terms the industry did about as well last year as it did before, and it's worth noting that the margins on digital distribution are considerably higher because there are no physical goods to manufacture and ship. So 2005 may have been more profitable than 2004 (it certainly was for Warner Music Group). Who knew?



Posted by Chris Anderson in Media Meltdown

look at the graph..notice that 1999, the year after napster, and other programs that followed suit, like kazaa and such, boasted the highest cd sales in the past 10 or so years, with just small decreases in sales in 2000 and 2001...its funny really...sales increase after p2p music sharing programs were released...

also note that there has been a decrease in sales since 2003, when the lawsuits began...more riaa butt-backwards methodology

In the chart on the linked page, the black line represents the number of CDs produced, right? Did it occur to them that if they less, people buy less?

Also, weren't CD sales up slightly in 2004?

"In the chart on the linked page, the black line represents the number of CDs produced, right? Did it occur to them that if they less, people buy less?"

read the fine tiny print...that is the growth percentage of sales from the last fiscal year

the scale is on the right side...not the left

Also, weren't CD sales up slightly in 2004?

slightly...but thats not the point....if you ask me...the amount sold is proportional to riaa lawsuits and the use of p2p networks

in 2004, if i remember correctly...riaa lawsuits didnt receive much media attention...the general public quickly forgot or those that didnt have a computer/internet then didnt know...and got this great little program that allowed them to download music...so when you look at it....p2p is good for the riaa....

old news aint it


BTW....srry bout the tripple post

"read the fine tiny print...that is the growth percentage of sales from the last fiscal year"

I see now. I misunderstood the chart.
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I should have been more specific about the 2004 CD sales. I was saying that they were up a little which means that statements like "Music Sales Post Their Sixth Year of Decline" aren't really true.

I do see what you're getting at with lawsuits, though.