Is Flat Sales Growth Such a Bad Thing?

According to a Reuters news release dated Dec 10, "The growth in sales of digital downloads, which only last year had been marked and promising, slowed to a trickle, as more consumers plugged into Internet radio and video streaming sites."

The Entire article can be found at The Reuter's Site

The article makes several assumptions - first that growth is essential for the financial health of the music industry, and that this slower growth is due to consumers spending time using other entertainment sources. Both assumptions are suspect. Profitability, not growth, is the most important aspect of sales. Also, if you read through the article you will see that lower sales figure was due primarily to the lack of a killer music app, such as a new Michael Jackson album. The pop culture music machine needs blockbuster releases to maintain its sales growth, but this has little to do with the sales totals of most artists' releases.

Buried within the Reuters article is a most interesting nugget, "Nearly all of 2010's meager gain in track sales has come from albums. Sales of digital albums are up 12 percent through November 21, according to Nielsen SoundScan. At the same point in 2009, they were up 17 percent and finished the year up 19 percent." Older or more passionate music lovers usually purchase albums. This increase reveals a migration by album-oriented CD buyers into digital downloads. I see this as a good thing. As more audiophiles buy downloads, there will be more pressure on suppliers to make these downloads available in lossless formats as well as MP3.

So while Reuters considers 2010 a mediocre year for music sales, anyone who listens to entire albums should consider 2010 a watershed year, the year when major labels began to realize that albums are just as important as singles sales. Anything that makes it easier and more likely that audiophiles will download lossless albums should be considered progress.

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