2014: A Great-Terrible Year for the Music Industry
The march toward music as cheeseburgers continues, with 164 billion songs streamed in 2014. CNBC reports that's a 52-percent increase over the previous year, according to Nielsen Music. Rolling Stone notes that 78.6 billion of those were purely audio streams, with the other 85.3 billion being videos.
Billions and billions served, so what's the beef?
It certainly isn't with vinyl sales which, like streaming, saw an over 50-percent increase in sales over the previous year. With 9.2 million records sold in 2014, vinyl now accounts for 6-percent of all physical album sales.
This year's hand-wringing is all about CD sales and digital downloads, both of which appear destined for the "dead format" pile according to the sales trends. Consumers purchased 140.8 million CDs last year, which sounds impressive but is a 15-percent drop in an already declining market. Downloads declined from 117.6 million in 2013 to 106.5 million in 2014. (That's a 9.4-percent drop.)
So here's what we know:
- Album sales: Up
- Streaming: Up
- Downloads: Down
- CDs: Down
What does this tell us? The trends suggest that music consumers fall into two distinct camps: 1) collectors/audiophiles; 2) casual listeners.
Both are enthusiastic about the music they consume, but in very different ways. The casual listener just wants to hear the song, thus the dramatic increase in streaming. The collector wants an artifact. A third category -- the slightly more than casual but less than collector listener -- is also implicit in the CD numbers.
Downloads appeal to none of these camps as there is some degree of ownership, i.e., one has to purchase the digital file, but they are worthless as fetish items to be collected. Digital downloads are no more than a delivery mechanism, and streaming is more efficient in that regard.
CDs, on the other hand, appeal to folks who aren't yet on board with digital services. Perhaps they are older, or maybe they have kids who want to hear the same things incessantly and Mom doesn't want to max out her data plan. Maybe this group of buyers drives older cars with CD players; regardless, this is a group who prefers the utility and perhaps the permanence of physical media, but aren't necessarily collectors.
Those are reasonable yet unsupported assumptions; fortunately, Nielsen provides another level of detail that helps to prove them. By looking at 2014's biggest sellers by format, we should be able to get some sense of which music fans shop for which format.
The Top 5 CD sales last year are also likely the Top 5 CDs in the center console of your mom's minivan. This seems like ample evidence to support the "late to adopt digital formats" theory:
- 'Frozen' soundtrack, various artists
- '1989,' Taylor Swift
- 'That's Christmas to Me,' Pentatonix
- 'Partners,' Barbara Streisand
- 'In the Lonely Hour,' Sam Smith
Here are the Top 5 vinyl albums of 2014. Lana Del Rey is a bit of a wildcard, but otherwise this is strong evidence of collectors/audiophiles. If I wore a hat, I'd bet it that all of these purchases were made by folks who covet the entire music experience -- the packaging, the history, the ownership, and so on.
- 'Lazaretto,' Jack White
- 'AM,' Arctic Monkeys
- 'Born to Die,' Lana Del Rey
- 'Abbey Road,' the Beatles
- 'Legend,' Bob Marley & the Wailers
Finally, we have the most streamed songs of 2014. It is a list of the moment -- the kind of music that has always been wildly popular for a month and then completely forgotten over time. Don't believe me? Boyz II Men's 'On Bended Knee' was Billboard's No. 1 single for most of January 1995. Twenty years later I don't even remember that song existing, much less what it sounds like.
- 'Dark Horse,' Katy Perry feat. Juicy J
- 'Fancy,' Iggy Azalea feat. Charli XCX
- 'All About the Bass,' Meghan Trainor
- 'All of Me,' John Legend
- 'Let It Go,' Idina Menzel
The implications for the music industry seem pretty clear:
- Keep printing the alt-indie and collectible artists on vinyl
- Keep the Disney soundtracks and 'Michael Bolton Sings the Songs of Barry Manilow' CDs coming
- Stream the stuff with an expiration date
Some of us like McDonald's, some like Olive Garden, and others want a farm-to-fork artisanal meal. The restaurant industry recognizes that which one is best is a matter of taste, and so it serves all three markets. The music industry has to do the same.
A handful of startups are trying to bridge the gap separating the digital world and the artisanal experience. As reported here recently, Neil Young's Pono is poised to fill the hi-resolution gap in the digital market. Other companies like VNYL and Vinyl Me, Please offer a subscription service that sends vinyl records to your home for a monthly fee. Old-timers remember this model from the Columbia and RCA record club days, but this time around it strives to hit that "farm-to-fork artisanal meal" button rather than the "11 records for a penny" switch. Mic.Com reports:
Vinyl Me, Please is the perfect way to experience records. The service, which costs $23 to $27 a month, sends subscribers a record and pairs each one with a commissioned art print and cocktail recipe suited to that album's style. It's meant as a multisensory experience to get listeners to sit down and fully soak in the music, even if it's not a genre they'd be inclined to pick themselves. Each album is curated and agreed on by the company's founders as essential listening.
Whether these services will succeed long term remains to be seen, but 2014's sales trends make one thing perfectly clear: No matter how many billions of Iggy Azalea are downloaded, no matter how many 'Frozen' CDs are sold, you're going to have to pry the vinyl from some of our cold, dead tonearms.