The music industry : From major to minor

The Economist ^ | Jan 10th 2008

[george76]

Last year was terrible for the recorded-music majors. The next few years are likely to be even worse.

IN 2006 EMI, the world's fourth-biggest recorded-music company, invited some teenagers into its headquarters in London to talk to its top managers about their listening habits.

At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. “That was the moment we realised the game was completely up,” says a person who was there.

In public, of course, music executives continued to talk a good game: recovery was just around the corner, they argued, and digital downloads would rescue the music business.

But the results from 2007 confirm what EMI's focus group showed: that the record industry's main product, the CD, which in 2006 accounted for over 80% of total global sales, is rapidly fading away. In America, according to Nielsen SoundScan, the volume of physical albums sold dropped by 19% in 2007 from the year before—faster than anyone had expected.

More worryingly for the industry, the growth of digital downloads appears to be slowing.

[Dinsdale]

Vinyl is still considered to produce the best sound.

By idiots.

[Professional Engineer]

At the end of the session the EMI bosses thanked them for their comments and told them to help themselves to a big pile of CDs sitting on a table. But none of the teens took any of the CDs, even though they were free. “That was the moment we realised the game was completely up,” says a person who was there.

Sounds like a kid we know.

[conservatism_IS_compassion]

Ping. Is the recording industry a “dinosaur medium”?

[gathersnomoss]

Eight tracks are the best format for listening to you favorite tracks in....hisssss....ca-chunk.....hisssss....your Buick Electra. And when you hop into the huge back seat with your girlfriend while grooving to the....hissss....ca-chunk....hissss....Moody Blues while lighting up a doober, you will settle into the mood and you know you are about ready to get a....hissss....ca-chunk....hisss....never mind. What are we doing here?

[RipSawyer]

your Buick Electra

>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Oh, man, a deuce and a quarter with breeze! Only the coolest need apply.

[RipSawyer]

They aren’t producing product that people want to buy.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Young people don’t seem to get excited about music like they used to, is it because there is no good new music anymore or is it just that young people don’t get excited about anything like they used to? They certainly don’t have the curiousity and desire that they used to have, at least the ones in my area don’t.

[Fire_on_High]

Ironically, Oakenfold is the one artist who I go out of my way constantly to find new stuff from...my latest thing has been catching rips of the Sirius broadcasts of Perfecto On Tour. Only “new” stuff I’ve had any interest in for years are his new sets as they’re released...most are magnificent! Not so crazy about his studio work, tho.

Current favs...Perfecto On Tour 52, and Club Spin...longtime favs, Homelands 2003, Goa Mix Gold, and a live bootleg from Sydney. You?

[Spktyr]

Far too much to list, actually. Electronica, 80s/90s (pre-Alanis) Alternative... lots more. :)

[MarkL]

Strange to think that CDs might be the end of the line for physical formats. I wonder if there's a new format in the works to replace them, or if it's just accepted that downloads are the future and CDs are the last of the physical Mohicans.

I rip my music CDs to MP3 (at least 320 Kb/s), then burn them to CD-R. This allows me to get at least 7 music CDs on a CD-R. But I'm starting to think that the next time I'm in need of a new car stereo (mine works fine with my MP3 CDs), I've seen that some of the newer ones actually have USB ports on them, I've been thinking that it might be nice to have one of those, especially given the fact that 4GB thumb drives are so cheap now, less than $25.

Mark

[weegee]

New vinyl is outselling both of the competing new CD audio formats.

[Myrddin]

It doesn't matter whether the medium is CD or digital download. The artists aren't producing anything I want to buy lately. I'm so busy working that I don't have much time to listen to the radio to hear any new stuff. When I do listen, I'm not hearing anything that inspires me to make a purchase.

[Jack Black]

True. The manufactured ones are much better than the CD-R’s. I still play the first CD I bought with out problems, Tom Petty’s first album.

[Jack Black]

The iPod connects to the car player, and on some cars the steering wheel controls auto-sync to it.

[Lexinom]

That's correct. For sheer sound quality, a high-end Linn Sondek with a quality diamond stylus and quality amp will outdo the most expensive system from Best Buy. The attention to detail and electrical decoupling is staggering: with the power supply separated, everything from end to end is designed to minimize noise and maximize quality. Also, many do not realize that in the remix from original LPs to produce digital format, the sound engineer often amplifies and attenuates the frequencies (non-flat equalization) resulting in loss from the original.

A friend of mine has a Linn Sondek setup - and a pair of Class A amps with giant heat sinks. It's not about how loud you can make things, it's about quality.

MP3s, using as they do a lossy compression format, are, um... disdained by audiophile standards.

[Lexinom]

You can hear a difference if you are listening to Classical music recorded on a Steinway or Bosie, and for much jazz. High aliquot frequencies produce a noticeable "fuzz" artifact in digital recordings absent from the same recording on LP. The piano is an amazingly difficult instrument to record.

For "noise" as from drums and electric guitar, you would not likely notice the difference and in that case I would agree with you: don't throw away your money.

[ashtanga]

I love crude music, but the stuff I hear today is too puerile to come up to crude. It is a shame that I have to even hear the junk in the stores, or at the gym. One can laugh at bad clothes, or bad haircuts, but the music today is unspeakable and sickening at every level. Are there exceptions? Well, the Elvis Costello-Burt Bacharach collaboration was a blessed exception....

[FormerACLUmember]

The music industry is dying. And this is bad because......?

[MarkL]

The iPod connects to the car player, and on some cars the steering wheel controls auto-sync to it.

Yes, quite a few do allow you to connect your iPod via USB connection, however there are also some that allow a direct connection of a USB flash drive as well.

I've currently got an Alpine car stereo that I'm perfectly happy with, but if something happens to it, or I break down because I really, REALLY decide that I want HD Radio, I might get one.

Mark

[abb]

Ping. Is the recording industry a “dinosaur medium”?

I think that's accurate. What has happened to the music industry is now happening to the movie industry. Technology and capital always flows to where the money is. In the case of the music industry business model, all the money was gobbled up by a marketing and distribution monopoly. That doesn't work any more.

[LukeL]

judging by the way the GOP is heading, you probably aren’t too far off.