One thing is clear when it comes to the digital music market. It is constantly evolving. Apple is trying it’s hardest to retain its competitive advantage as streaming services start to reduce the number of downloads they sell. We can safely say that Apples monopoly on download sales is more or less over.
Across the board, song downloads are down and digital album sales are down. CD sales have been declining for a long time as well.
So what do we have at the moment. Streaming is growing in popularity and YouTube is still there, the unofficial streaming monolith. As fans of music we are using our smartphones to stream music instead of downloading it.
So if you are a metal or a rock label like Frontiers, Century Media or Nuclear Blast and you have all the above information in front of you, what do you do?
1. Don’t hold back music from streaming services. It’s not about sales anymore. It’s about who is listening to it.
2. Corporate deals/exclusives alienate the fans while it brings a return on investment to the record label.
3. If piracy sites make so much money from offering mp3’s for free, why don’t the record labels get into the same act. Get into bed with BitTorrent. High piracy rates today will lead to payola in the years to come. Volbeat were streaming stars in Denmark and Sweden before they even broke through in America. Moby’s “Innocents” BitTorrent bundle was downloaded 8.9 million times. Expect 20% of those customers to purchase the next album and expect 50% of those customers to attend a live show from Moby.
4. iTunes is finished as a main income source much in the same way CD’s are over. Sure, hobbyist will still purchase, however the fans have moved to streaming.
5. Streaming is not the enemy. To use a non-metal or rock example, hip hop artist Schoolboy Q had his “Oxymoron,” album heavily promoted on Spotify. In a smart promotional move, they released the album on Spotify months ahead of the album physical and digital release and by the time it got released, 3.3 million streams got racked up and in its first week of release it sold over 130,000 copies. The first two earlier albums, “Setbacks” and “Habits & Contradictions,” sold 17,000 and 48,000 units respectively.
6. It’s not a great marketing strategy to dictate to fans how they can consume that band’s music. People want uniqueness and those special packages. People want to stream. People want to download mp3’s for free. People will download mp3’s and pay for it. People will buy a CD/DVD package. People will download a free app, if they know that it contains the whole album. If “Flappy Bird” was making money from a free app, why wouldn’t music artists make money.
7. The label is in the recording business to make money. The best way to make money is to have deals in place that is a win-win for both the label and the artist.
8. Sales are not a measure of success anymore. I was following the band Otherwise after their album “True Love Never Dies” was released in 2012. Each week they moved 400 to 700 units in the U.S. They were also on tour with 3 Doors Down and Daughtry. By delivering on stage, they saw sales resonate. Eventually all those small amounts started to add up into 10,000. Then 20,000 and so on. Spotify shows the song “Soldiers” at 937,417 streams. The song “I Don’t Apologize” with 768,304 streams. “Die For You” has 402,458 streams. The “Soldiers” official video on the Century Media channel has over 1.7m views.
Smaller returns today, will lead to greater returns in a few years. It’s all about longevity.
As a label, YOU WANT YOUR ARTISTS TO LAST and STAY TOGETHER. It is about outlasting the competition.