The internet is killing music sales (by increasing them)

Music sales went up another 10.5% in 2008, largely due to over one billion (yeah, with a “B”) digital song sales. There were 428 million full album sales as well, but as the online market explodes (32% increase from last year) physical CD sales drop accordingly (down 14%). This is not surprising to anyone who can look at this rationally. If you have a potential market of 100 people and they can only buy in one format, then the people who will buy will all buy that format. So let’s say you sold 60 CD’s to those people. The next year you release a second album, and allow the new one to be purchased online as well. This time, 66 albums are sold, 40 hard copies and 26 digital.

Are sales down? No. You sold six more albums, and increased your sales over the last album’s by 10 percent. You should be happy about that, not complaining that you sold twenty less CD’s. In fact, if anything, you would be happier, because you have eliminated the cost of creating those CD’s from the process, which gives you a higher net profit from an album sale (and/or allows you to lower the price, thus potentially attracting more customers).

So when you hear the big labels, the RIAA, and the anti-digital music loons claiming that piracy and online music distribution in general is killing music sales and hurting artists, remember that this screwed-up logic is what they’re using. Also remember that countless artists have spoken out against the harmful (and ineffective) tactics used by the RIAA to “combat piracy,” culminating in the creation of a copyright czar cabinet post under the new Obama adminstration, some artists going to far as to drop their labels entirely and finding great success in doing so. Nine Inch Nails and Radiohead both had incredible and well-documented success with their independent online album releases, and many other bands have dropped their larger labels to found independent labels for artists seeking to leave the stifling, anti-consumer attitude propagated by the RIAA.

In addition to the obvious benefits of online music sales over traditional music sales, what has traditionally been described as “piracy” by lawyers and the media is often one of the artist’s best tools to spread his music around and reach ears he would otherwise be unable to. The classic success story here is Jonathan Coulton, who came out of nowhere and distributed his music via his website (with the option to pay, but not forcing you to) and now makes more money off his music than he ever did as a software engineer. I’ll leave you with a 2001 statement from David Draiman, lead singer of Disturbed, that kind of sums up why even the typical examples of piracy given by the RIAA and its ilk are not quite what they seem:

[I’m] Very positive about the internet, Napster. I think it’s a tremendous tool for reaching many more people than we ever could without it. When you release music you want it to be heard by people. Artists really want to have their music heard. They want to have their creation heard by people. Nothing is going to do that better than Napster. I can’t tell you how many kids have come up to me and said, ‘I downloaded a couple of tunes off Napster and I went out and bought the album.’ Or they say, ‘I want to come see you play.’ I don’t really make money off of record sales anyway.

And again in 2003, on the series of lawsuits brought against file sharers:

This is not rocket science. Instead of spending all this money litigating against kids who are the people they’re trying to sell things to in the first place, they have to learn how to effectively use the Internet. For the artists, my ass… I didn’t ask them to protect me, and I don’t want their protection.

The internet as a method for music distribution is (still) exploding. It’s time to jump on the train, not hold on to the boarding station for dear life.

2 thoughts on “The internet is killing music sales (by increasing them)”

  1. Amen… Remember when cassette recording was killing it? The music industry is the definition of conservative- someone who doesn’t want anything to happen for the first time.
    They don’t seem to realize that no one needs a music industry anymore… but as McLuhan said “the dinosaurs didn’t realize they were going extinct either…”

    thanks for a good read on one of my favourite issues….

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