Interestingly enough I just discovered this. a translation by 'Pyrolse Bred' of an article in French from Jan 2009 here.Is the music business in crisis?
If by “crisis” you mean something similar to the steel industry in the 1970s or the automobile industry now, then the answer is no. The music industry had its heydays at the end of the 1980s and the beginning of the 1990s, when people replaced their vinyl records by CDs, while still buying new releases. Those exceptional days are over, but the industry is still doing well. In France, money collected by the Sacem (the main institution responsible for collecting and redistributing royalties) increased from 600 millions € in 2000 to 750 millions € in 2005.
This “crisis” is in fact a crisis of the CD, their sales declining steeply (by 20% in 2008). But this decline is offset by an increase in revenues from live shows and public broadcasting. The sales of digital music (like ringtones and so forth) are fast increasing (+ 26.8%) and music on demand has increased by 85%.
Are illegal downloads responsible for the decline in CD sales?
There’s actually no proof of that. One downloaded song doesn’t mean one lost sale. First, because the song might not have been purchased otherwise. Second, because the discovery of an artist thanks to a free download may induce the purchase of albums or of derived products (ringtones, concert tickets, video games etc).
Are CDs and DVDs the main source of revenues for artists?
No. The sales of records represent only a fraction of their revenues. In 2007 they represented (only) 16.5% of the money collected by the Sacem. Artists earn more money from live shows and public broadcastings (radio, TV, nightclubs).
How many artists suffer from the decline of CD sales?
If we imagined a sudden collapse of sales, only a few music writers would seriously suffer: the ones who never get played on the radio and never give any concerts. Others would see their revenues go from very comfortable to comfortable. In fact, in their vast majority, artists sell too few CDs to be hurt financially by illegal downloads. Only 5% of artists could be earning money from the sales of records. The issue for the remaining 95% of artists is to be known, not to fight piracy.
How come so few artists live off the sales of CDs?
Major record companies are largely responsible for this situation.
From the year 2000 onwards, they focused their marketing strategies on a small number of “safe” artists. Between 2001 and 2004, the number of artists who had a contract with one of the 4 majors has strongly decreased. The result is that by 2006 less than 6% of the artists represented 90% of the market.
Radio stations have also played a big role in impoverishing the market. A 2006 report by the “Observatoire de la musique” stated that on 31 radio stations (making up 92% of the audience) less than 3% of the songs played represented ¾ of the broadcasting time. And on radio stations aimed at young people the situation was even worse: the presumed 40 most popular songs represented 60% of the broadcasting time.
Who is the biggest loser of the decline in record sales?
The record companies: Universal (25% of the market), Sony BMG (21%), EMI (13%) and Warner (11%). They’re the ones who collect the biggest chunk of money from the sales of records. Off the price of 15-20€ for a CD, 19.6% is VAT, 21% goes to the distributor and 50% is collected by the record company. The main artist, writers and musicians collect together about 9%. In theory. Because record companies often deduct the costs of recording, marketing and shooting the video(s) from those 9%.
Could music be cheaper without ripping off artists?
Yes. Right from the start CDs were sold at a price 50% higher than vinyl records. But the manufacturing costs have quickly dropped below that of vinyl LPs. Moreover, in 1987, VAT on records went from 33.6% to 19.6%. The price of CDs on the other hand has only dropped by a mere 8%, and it subsequently never decreased further. Needless to say, artists are still not being better paid now than in the 1980s …
michelle shocked's story on how she came to sue her record company mecury records for breaking the 13th amendment, the one that outlawed slavery in the US, in reguards to her record contract and how she was released from the contract and had all ownership of her albums return to her is a story evreyone should hear.
ReplyDeleteIt tell you the truth, these companies are just plain evil.
"Record Companies know how vulnerable creativity is and that the slightest attack can make artists feel like abused children and they'll retreat. I refuse to look at them as my parents. I just look at them as equals in a power struggle."
Michelle Shocked