2013 has just come to an end and the analysis has begun. Across the globe, analysts are comparing numbers from 2012 to 2013 for each industry and none is more scrutinized than the music industry. For years now, pundits have been predicting our demise, as digital downloads radically change everything about the industry.
For a while it seemed the industry might stabilize to a less profitable degree, in the form of digital downloads, even amongst the mass pirating that has become common in this era. Now even that logic is being tested, with many fearing the worst yet again. For the first time since iTunes become a household name, digital sales for music declined.
Nielson SoundScan has reported that digital track sales fell from 1.34 billion to 1.26 billion in 2013. To put that in more common language, a whole lot less individual tracks, or ‘singles’ were purchased this past year than in 2012. 5.7% less to be exact. That is a massive drop, and one that has the industry on its heels. Fortunately, digital album sales didn’t fare as poorly, only dropping 0.1% on the year, down from 117.7 to 117.6 million in 2013.
Album sales suffered overall, dropping 8.4% and the CD medium dipped even lower, dropping 14.5%. The one small triumphant kicker to all of these bad numbers is that vinyl is continuing to make it’s way back into the fold with a niche market following, growing from 1.45 million units to a total of 6 million for the year in 2013.
Even with these ugly numbers, download stores have no right to call 2013 the year that it all started to unfold. Quite the contrary, iTunes actually managed to grow in market share, up to 40.6% of U.S. album sales, while brick and mortar merchants Target and Walmart dropped 16.3%, and chain stores faired even worse, with Best Buy and Trans World declining a full 20%. So in actuality, while sales may be declining world wide, the rate of decline is much slower digitally, which gives a small amount of stability to the industry, even if unnoticeable at first glance.
All of these hard numbers aside, the music industry may be less profitable at the moment, but it is more popular than ever before. SoundScan has yet to release numbers for the year in 2013 about streaming, but it is believed globally that streaming has cannibalized a great part of the digital download market and companies like Spotify and Deezer may have finally managed to take a good chunk out of the market.
We’re witnessing the evolution and change of an industry in a very short amount of time. While it is becoming less profitable at the moment, there is almost no barriers of entry, which promotes good competition. That generally means that better music will be produced, but it may be difficult to find.
That makes me cherish the idea of streaming.
In theory, streaming rewards those that make good music, not the ones whom are most popular and have the highest marketing budgets. Once there is a profitable formula made for streaming, it is only a matter of time until the industry rebounds. Every industry has its peaks and recessions, we can only hope that this time change leads to even greater heights.
Here’s to hoping 2014 leads to a more positive outlook on the industry!