Truth In Numbers: Six Music Industry Takeaways From Year-End
Feb 19, 2015 19:53:07 GMT -6
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Post by Johnkenn on Feb 19, 2015 19:53:07 GMT -6
www.forbes.com/sites/zackomalleygreenburg/2015/01/22/truth-in-numbers-six-music-industry-takeaways-from-year-end-data/
In recent days, a handful of important year-end music reports have been published–from varied outlets including Nielsen SoundScan, Next Big Sound, Morgan Stanley MS -0.11%, TechNavio and Concave Brand Tracking–and, as usual, the numbers contained in them reveal valuable insights about the state of the industry.
Despite the well-publicized struggles of the music business, there are plenty of positive takeaways.
“Music fans continue to consume music through on-demand streaming services at record levels, helping to offset some of the weakness that we see in sales,” said Nielsen’s David Bakula in a statement. “The continued expansion of digital music consumption is encouraging, as is the continued record setting growth that we are seeing in vinyl LP sales.”
But who’s got time to comb through hundreds of pages of statistics and analysis? FORBES does–and we’ve done exactly that to bring you a few of the highlights.
1. More people are consuming music than ever before.
It’s just coming through streaming services, not album sales. According to the Next Big Sound report, released yesterday, there were 434,695,663,626 total music streams across Spotify, YouTube, Vevo, Soundcloud, Vimeo and Rdio. That’s a 95% gain from 2013 and a 363% gain from 2012. Streaming isn’t just the future of the music business, it’s the present.
“The music industry has gone down a path it probably won’t come back from,” the report stated. “As harsh as it may seem, if you’re not already on board, you’re probably irrelevant.”
Which leads us to the next point…
2. Digital downloads are dying.
Here at FORBES, we’ve been hammering this point for quite some time. But it’s getting clearer and clearer with each passing year. Nielsen SoundScan’s year-end report reveals that digital album sales dipped from 117.6 million to 106.5 million, a drop of 9.4%. Digital track sales slid from 1.26 billion to 1.1 billion, down 12.5%.
Given the rise of streaming, it’s hard to see that trend changing. For better or worse, consumers have been conditioned to expect free music–first with Napster and the like, and now with the advent of YouTube and free streaming.
The next great hope for the music industry lies in convincing more casual users to start dishing out $9.99 per month for Spotify and the like, with artist payments theoretically rising in lockstep. Market research firm TechNavio predicts global annual digital revenues will soar from $8 billion last year to $16 billion in 2019.
3. The album will live on–in vinyl.
Album sales are down on the digital front, and even more sharply when it comes to CDs–sales slipped 14.9%, from 165.4 million to 140.8 million–but vinyl is still rocking.
That trend has been noted in this publication and others, but this year’s numbers reveal that the trend is continuing at an ever-growing rate. There were 9.2 million LPs sold last year, a 51.8% gain over the 6.1 million moved in 2013.
“This is the ninth consecutive year of growth for vinyl sales,” the Nielsen report stated. “Vinyl now comprises over 6% of physical album sales.”
Truth In Numbers: Six Music Industry Takeaways From Year-End Data
4. Rock isn’t as dead as one might think.
Part of vinyl’s success has to do with the enduring popularity of rock music. The genre accounted for 71% of LP sales last year.
And it’s not just classic rock: both the Beatles and Lana Del Rey had two albums in the top ten. The top two overall were Jack White’s Lazaretto (86,700 copies) and the Arctic Monkeys’ AM (58,700).
On the streaming front, pop-rock is the dominant genre, taking up 24% of the digital airwaves according to Next Big Sound. That’s more than double the next closest competitors, rap (11%) and electronic (9%). Then again, classification is full of gray lines.
5. Radio still rules.
There are 320 million people in the United States, and at the end of 2014, 298 million of them were active listeners of AM/FM radio , according to Morgan Stanley’s report. That’s more than double the total of Pandora (79 million), SiriusXM (27 million) and Spotify (14 million)–combined.
And it pays. Morgan Stanley figures that terrestrial broadcast radio accounted for 44% of total U.S. music industry revenue last year, easily topping No. 2 live music (26%) and satellite radio subscription (10%).
It may not always be that way–the report figures revenue growth for broadcast will decline by 1.4% annually over the next five years, while digital streaming advertising will soar at a 22.1% rate–but radio isn’t going anywhere anytime soon.
6. Brands and bands are growing closer.
Just yesterday, Motley Crue appeared on CNBC’s “Closing Bell” and, among other things, defended their shilling for Dodge. That shouldn’t come as a surprise: like it or not, brands and bands are more inextricably intertwined than ever.
According to Next Big Sound, brands spent about $1.3 billion on music partnerships last year. A report by Concave found that the most visible brands in music videos were Adidas, Beats and Apple. The latter two’s $3 billion deal resulted in a $620 million payday for Dr. Dre last year, the highest single-year sum for any musician in history. There’s no better proof than that.
As a final note, it’s clear that all the outfits providing this data are creating plenty of value themselves. Next Big Sound has raised over $7.5 million, and data outfit Semetric (parent of Musicmetric) was recently purchased for an undisclosed sum by–who else–Apple.
For more about the business of entertainment, check out my Jay Z biography Empire State of Mind and my new book Michael Jackson, Inc. You can follow me on Twitter, Facebook and by signing up for quarterly email updates.
World's Highest-Paid Musicians 2014
1 of 34
Chelsea Lauren/Getty Images for BET The World's 30 Highest-Paid Musicians of 2014
Page 2 of 2
Page 1
Truth In Numbers: Six Music Industry Takeaways From Year-End Data
4. Rock isn’t as dead as one might think.
Part of vinyl’s success has to do with the enduring popularity of rock music. The genre accounted for 71% of LP sales last year.
And it’s not just classic rock: both the Beatles and Lana Del Rey had two albums in the top ten. The top two overall were Jack White’s Lazaretto (86,700 copies) and the Arctic Monkeys’ AM (58,700).
On the streaming front, pop-rock is the dominant genre, taking up 24% of the digital airwaves according to Next Big Sound. That’s more than double the next closest competitors, rap (11%) and electronic (9%). Then again, classification is full of gray lines.
5. Radio still rules.
There are 320 million people in the United States, and at the end of 2014, 298 million of them were active listeners of AM/FM radio , according to Morgan Stanley’s report. That’s more than double the total of Pandora (79 million), SiriusXM (27 million) and Spotify (14 million)–combined.
And it pays. Morgan Stanley figures that terrestrial broadcast radio accounted for 44% of total U.S. music industry revenue last year, easily topping No. 2 live music (26%) and satellite radio subscription (10%).
It may not always be that way–the report figures revenue growth for broadcast will decline by 1.4% annually over the next five years, while digital streaming advertising will soar at a 22.1% rate–but radio isn’t going anywhere anytime soon.
6. Brands and bands are growing closer.
Just yesterday, Motley Crue appeared on CNBC’s “Closing Bell” and, among other things, defended their shilling for Dodge. That shouldn’t come as a surprise: like it or not, brands and bands are more inextricably intertwined than ever.
According to Next Big Sound, brands spent about $1.3 billion on music partnerships last year. A report by Concave found that the most visible brands in music videos were Adidas, Beats and Apple. The latter two’s $3 billion deal resulted in a $620 million payday for Dr. Dre last year, the highest single-year sum for any musician in history. There’s no better proof than that.
As a final note, it’s clear that all the outfits providing this data are creating plenty of value themselves. Next Big Sound has raised over $7.5 million, and data outfit Semetric (parent of Musicmetric) was recently purchased for an undisclosed sum by–who else–Apple.
For more about the business of entertainment, check out my Jay Z biography Empire State of Mind and my new book Michael Jackson, Inc. You can follow me on Twitter, Facebook and by signing up for quarterly email updates.
World's Highest-Paid Musicians 2014
1 of 34
Chelsea Lauren/Getty Images for BET The World's 30 Highest-Paid Musicians of 2014
In recent days, a handful of important year-end music reports have been published–from varied outlets including Nielsen SoundScan, Next Big Sound, Morgan Stanley MS -0.11%, TechNavio and Concave Brand Tracking–and, as usual, the numbers contained in them reveal valuable insights about the state of the industry.
Despite the well-publicized struggles of the music business, there are plenty of positive takeaways.
“Music fans continue to consume music through on-demand streaming services at record levels, helping to offset some of the weakness that we see in sales,” said Nielsen’s David Bakula in a statement. “The continued expansion of digital music consumption is encouraging, as is the continued record setting growth that we are seeing in vinyl LP sales.”
But who’s got time to comb through hundreds of pages of statistics and analysis? FORBES does–and we’ve done exactly that to bring you a few of the highlights.
1. More people are consuming music than ever before.
It’s just coming through streaming services, not album sales. According to the Next Big Sound report, released yesterday, there were 434,695,663,626 total music streams across Spotify, YouTube, Vevo, Soundcloud, Vimeo and Rdio. That’s a 95% gain from 2013 and a 363% gain from 2012. Streaming isn’t just the future of the music business, it’s the present.
“The music industry has gone down a path it probably won’t come back from,” the report stated. “As harsh as it may seem, if you’re not already on board, you’re probably irrelevant.”
Which leads us to the next point…
2. Digital downloads are dying.
Here at FORBES, we’ve been hammering this point for quite some time. But it’s getting clearer and clearer with each passing year. Nielsen SoundScan’s year-end report reveals that digital album sales dipped from 117.6 million to 106.5 million, a drop of 9.4%. Digital track sales slid from 1.26 billion to 1.1 billion, down 12.5%.
Given the rise of streaming, it’s hard to see that trend changing. For better or worse, consumers have been conditioned to expect free music–first with Napster and the like, and now with the advent of YouTube and free streaming.
The next great hope for the music industry lies in convincing more casual users to start dishing out $9.99 per month for Spotify and the like, with artist payments theoretically rising in lockstep. Market research firm TechNavio predicts global annual digital revenues will soar from $8 billion last year to $16 billion in 2019.
3. The album will live on–in vinyl.
Album sales are down on the digital front, and even more sharply when it comes to CDs–sales slipped 14.9%, from 165.4 million to 140.8 million–but vinyl is still rocking.
That trend has been noted in this publication and others, but this year’s numbers reveal that the trend is continuing at an ever-growing rate. There were 9.2 million LPs sold last year, a 51.8% gain over the 6.1 million moved in 2013.
“This is the ninth consecutive year of growth for vinyl sales,” the Nielsen report stated. “Vinyl now comprises over 6% of physical album sales.”
Truth In Numbers: Six Music Industry Takeaways From Year-End Data
4. Rock isn’t as dead as one might think.
Part of vinyl’s success has to do with the enduring popularity of rock music. The genre accounted for 71% of LP sales last year.
And it’s not just classic rock: both the Beatles and Lana Del Rey had two albums in the top ten. The top two overall were Jack White’s Lazaretto (86,700 copies) and the Arctic Monkeys’ AM (58,700).
On the streaming front, pop-rock is the dominant genre, taking up 24% of the digital airwaves according to Next Big Sound. That’s more than double the next closest competitors, rap (11%) and electronic (9%). Then again, classification is full of gray lines.
5. Radio still rules.
There are 320 million people in the United States, and at the end of 2014, 298 million of them were active listeners of AM/FM radio , according to Morgan Stanley’s report. That’s more than double the total of Pandora (79 million), SiriusXM (27 million) and Spotify (14 million)–combined.
And it pays. Morgan Stanley figures that terrestrial broadcast radio accounted for 44% of total U.S. music industry revenue last year, easily topping No. 2 live music (26%) and satellite radio subscription (10%).
It may not always be that way–the report figures revenue growth for broadcast will decline by 1.4% annually over the next five years, while digital streaming advertising will soar at a 22.1% rate–but radio isn’t going anywhere anytime soon.
6. Brands and bands are growing closer.
Just yesterday, Motley Crue appeared on CNBC’s “Closing Bell” and, among other things, defended their shilling for Dodge. That shouldn’t come as a surprise: like it or not, brands and bands are more inextricably intertwined than ever.
According to Next Big Sound, brands spent about $1.3 billion on music partnerships last year. A report by Concave found that the most visible brands in music videos were Adidas, Beats and Apple. The latter two’s $3 billion deal resulted in a $620 million payday for Dr. Dre last year, the highest single-year sum for any musician in history. There’s no better proof than that.
As a final note, it’s clear that all the outfits providing this data are creating plenty of value themselves. Next Big Sound has raised over $7.5 million, and data outfit Semetric (parent of Musicmetric) was recently purchased for an undisclosed sum by–who else–Apple.
For more about the business of entertainment, check out my Jay Z biography Empire State of Mind and my new book Michael Jackson, Inc. You can follow me on Twitter, Facebook and by signing up for quarterly email updates.
World's Highest-Paid Musicians 2014
1 of 34
Chelsea Lauren/Getty Images for BET The World's 30 Highest-Paid Musicians of 2014
Page 2 of 2
Page 1
Truth In Numbers: Six Music Industry Takeaways From Year-End Data
4. Rock isn’t as dead as one might think.
Part of vinyl’s success has to do with the enduring popularity of rock music. The genre accounted for 71% of LP sales last year.
And it’s not just classic rock: both the Beatles and Lana Del Rey had two albums in the top ten. The top two overall were Jack White’s Lazaretto (86,700 copies) and the Arctic Monkeys’ AM (58,700).
On the streaming front, pop-rock is the dominant genre, taking up 24% of the digital airwaves according to Next Big Sound. That’s more than double the next closest competitors, rap (11%) and electronic (9%). Then again, classification is full of gray lines.
5. Radio still rules.
There are 320 million people in the United States, and at the end of 2014, 298 million of them were active listeners of AM/FM radio , according to Morgan Stanley’s report. That’s more than double the total of Pandora (79 million), SiriusXM (27 million) and Spotify (14 million)–combined.
And it pays. Morgan Stanley figures that terrestrial broadcast radio accounted for 44% of total U.S. music industry revenue last year, easily topping No. 2 live music (26%) and satellite radio subscription (10%).
It may not always be that way–the report figures revenue growth for broadcast will decline by 1.4% annually over the next five years, while digital streaming advertising will soar at a 22.1% rate–but radio isn’t going anywhere anytime soon.
6. Brands and bands are growing closer.
Just yesterday, Motley Crue appeared on CNBC’s “Closing Bell” and, among other things, defended their shilling for Dodge. That shouldn’t come as a surprise: like it or not, brands and bands are more inextricably intertwined than ever.
According to Next Big Sound, brands spent about $1.3 billion on music partnerships last year. A report by Concave found that the most visible brands in music videos were Adidas, Beats and Apple. The latter two’s $3 billion deal resulted in a $620 million payday for Dr. Dre last year, the highest single-year sum for any musician in history. There’s no better proof than that.
As a final note, it’s clear that all the outfits providing this data are creating plenty of value themselves. Next Big Sound has raised over $7.5 million, and data outfit Semetric (parent of Musicmetric) was recently purchased for an undisclosed sum by–who else–Apple.
For more about the business of entertainment, check out my Jay Z biography Empire State of Mind and my new book Michael Jackson, Inc. You can follow me on Twitter, Facebook and by signing up for quarterly email updates.
World's Highest-Paid Musicians 2014
1 of 34
Chelsea Lauren/Getty Images for BET The World's 30 Highest-Paid Musicians of 2014
