Surprising endurance for the CD ....

[MrKnobs]

... at least to me.

 

Overall music sales last year held fairly steady at $15B globally, with physical sales (mostly CDs) roughly on par with digital. Download sales are declining and subscription sales have increased to reach a 23% share of the digital market. Vinyl has climbed to 2% total globally.

 

Some countries still prefer their music in tangible form, it seems. "Physical sales still dominate in a number of key worldwide markets including France (57%), Germany (70%) and Japan (78%)."

 

http://www.ifpi.org/news/Global-digital-music-revenues-match-physical-format-sales-for-first-time

 

Terry D.

[RoadRanger]

Physical sales still dominate in a number of key worldwide markets including France (57%), Germany (70%) and Japan (78%).

Also happen to be the best countries to tour in - the whole US music scene sucks.

 

 

[blue2blue]

I've been using paid subscription streaming for about a decade, and have bought a few download albums, but when buying, unless I get a substantial discount, my preferred purchase medium is CD, since it's a good backup copy. I'm going to rip it and upload it to my online locker in FLAC format where I can seamlessly integrate playing it with my normal stream listening, but I still like having the backup.

 

Where it gets tricky is if I have a choice between a used CD and a download album -- but it's rare when a used CD isn't still more expensive (maybe I should hit the thrift store instead of the trendy record store with its huge used vinyl and CD section).

 

I'll always prefer the 'new,' retail version -- since there are no artist or songwriter royalties derived from used sales in the US -- but I'm on a tight budget (until sometime around mid-century; oh, wait, I'll be dead).

 

Which was what attracted me to subscription streaming in the first place, since it a) gave me access to most of what's in my vinyl library [which for space reasons lives in the garage and is pretty buried at this time] as well as b) a gazillion more titles.

 

The 'downside' was that my $10/mo subscription was around twice what the average American music consumer spends on music a month -- but far, far less than the amount I'd spent on recorded music (not to mention going to see music in earlier times) for decades.

 

Yes, that change of purchasing behavior on my part was a net loss for the industry; but, no, there was no way that level of expenditure would continue. And I find it reassuring that the payouts have the potential for going to the songwriters and artists with very little intermediation -- few middle men.

 

As long as labels don't take advantage of artists -- or artists simply release their own material -- we see 'reasonable' payouts to the artists of a half cent to a full cent or more per stream from the on-demand services (even the freemium ones; Pandora, of course, is in a class of its own as a non-demand service that's argued as acting as a discovery mechanism -- like terrestrial radio broadcast [which in the US does not pay artists/labels for that very reason, although publisher/songwriters do get a fixed rate set by consent decrees with the PROs).

 

So where do the horror stories come from? First, many established artists have found that the contracts they signed with their labels put them at a serious disadvantage with the shift to streaming, with labels taking as much as 90% of stream revenue and even more (Portishead's Geoff Barrows apppoears to claim his label took 99% or so!) And second, some artists (as well as publishers and writers) have posted the tiny, tiny songwriting/publishing mechanicals from stream performance -- which are calculated by the rate courts as about 1/14,000th the amount of a terrestrial radio broadcast, since such broadcast is deemed on average to consist of about 14,000 listeners in the US (where there are about 15,000 broadcast radio stations) as if it was the ONLY stream revenue from a given song, when, in fact, someone was getting paid a half cent to a cent or so per stream.

[Iamthesky]

FWIW, I'm paying 1 cent per stream play for our mechanical license so we can put our Grateful Dead cover online. Just got the license last week through HFA, so that's an up to date number.

 

We're just putting it on the band website and reverbnation; it sounds like if someone famous put a cover on Spotify for streaming, they'd stand to lose a bunch if it was popular.

[MrKnobs]

FWIW, I'm paying 1 cent per stream play for our mechanical license so we can put our Grateful Dead cover online. Just got the license last week through HFA, so that's an up to date number.

 

We're just putting it on the band website and reverbnation; it sounds like if someone famous put a cover on Spotify for streaming, they'd stand to lose a bunch if it was popular.

 

Doesn't 1 cent per stream play paid out cut pretty hard into your revenue?

 

Terry D.

[blue2blue]

One interesting resource for no-up-front-cost cover licensing: Loudr.fm.

 

They have some pretty good deals on conventional licenses (HFA-style) -- but much more interesting to me is that -- for a not insubstantial slice of revenue -- 15% -- they will pay all cover licensing up front and ongoing for sale in their 'direct-to-fans' store -- where you can also sell originals. The latter is essentially free, except for credit card transaction fees.

 

For another 15% they will 'aggregate' distribution of your originals and/or covers to the online stores and/or stream venues you choose, subject to their current partner roster (which are mostly the bigs, your iTunes, Amazon, Play, Spotify, Deezer, Rdio, Pandora -- I thought they had Beats, but?)

 

[Beck]

As far as the USA goes... surprising comeback for the CD. I remember a few years ago vinyl was surpassing CD, at least in brick and mortar stores, but that was partly due to the increase in download sales. There was a trend back to vinyl for physical media. I remember the article, but will have to search to find it back. There were photos of stores like Best Buy and Borders Books with larger vinyl sections than CD sections. It seems very unpredictable and difficult to trend over the long term. I'm surprised at the low 2% stat for vinyl, especially that it took an increase of 54.7% to get there. I'm sure the data I saw years ago was for USA only.

[blue2blue]

 

Doesn't 1 cent per stream play paid out cut pretty hard into your revenue?

 

Terry D.

 

I've been with my current paid subscription service for 14 months. In that time, my most frequently played album had earned ~$21 off my plays. That's something that definitely gets played a lot; still, it's only got 13 tracks. Those pennies can add up. Still, I suppose that's a definite outlier. I just added up another album I play fairly often and it came to $4.10. And there are quite a number of albums in my play history that have paid out over a dollar in that time and many, many more where my plays have racked up between 50 cents and a dollar in a little over a year. Compare that to the cuts we've traditionally seen from physical sales by labels -- but remember, these are ongoing revenue streams; as long as people are playing the tracks, you keep getting new monies.

[Anderton]

There's something about a shiny disc you can hold in your hand...

 

I finally got my CD collection moved here from Santa Fe. My first thought was "I should put all of these on hard drives and save myself a lot of space." But even with artwork that's tiny compared to an album, it's still artwork and the little booklets have info on the CD...so I'd need to save those somehow, and I wouldn't want to spend the rest of my life scanning images.

 

So then I thought about CD binders, because I could put the booklets in those...but you can't look over a bunch of CD case spines and have your eye caught by something you weren't even thinking about playing.

 

Okay, so I like streaming. I'm listening to Cascada on some European pop station that TuneIn carries. And that's great, but for me, it replaces radio, not the CD.

 

As to vinyl...I tend to think it's a blip, but it's a significant blip. It means there are a whole bunch of people who value music sufficiently they're willing to go through a ritual to play it. They know that music is special.

[Iamthesky]

 

Doesn't 1 cent per stream play paid out cut pretty hard into your revenue?

 

Terry D.

 

Not in the volumes we're talking about, and it's free streaming, not selling it. I consider it part of the marketing budget to pull in the local Deadheads. If it starts to cost too much then it's already succeeded in driving traffic and we can pull it down. I'm not expecting more than the 5000 plays I've licensed, which is $66 through HFA with their fee.

 

If it's worth it, we'll put it on a physical media or download to sell, in which case the license is a more but the margin is massively greater and easily covers it.

[MrKnobs]

 

Not in the volumes we're talking about, and it's free streaming, not selling it. I consider it part of the marketing budget to pull in the local Deadheads. If it starts to cost too much then it's already succeeded in driving traffic and we can pull it down. I'm not expecting more than the 5000 plays I've licensed, which is $66 through HFA with their fee.

 

If it's worth it, we'll put it on a physical media or download to sell, in which case the license is a more but the margin is massively greater and easily covers it.

 

Very reasonable business-wise!

 

I was wondering what percentage of your stream pay that 1 cent is. I guess you don't want to say and that's OK!

 

Terry D.