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Music Media The Almighty Buck The Internet

Legal US Music Downloads Beat CD Single Sales 304

Kelly McNeill writes "I've received a lot of feedback from osViews readers (my site) asking about the music download survey that we've been conducting over the past few weeks, saying that osViews readership must be skewed in one particular direction to get the results we did. The primary reason given is not necessarily the fact that iTunes has significantly surpassed its competitors, but that the results show legal digital downloads surpassing even CD sales. I must admit that even I thought this a was a bit peculiar, but now, according to a BBC World news report, it seems the survey is correct. Digital downloads have surpassed even physical CD sales!" Update: 11/04 23:35 GMT by S : The BBC story refers to CD single sales, so Mr.McNeill maybe not be quite as right as he thinks, sadly.
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Legal US Music Downloads Beat CD Single Sales

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  • by Anonymous Coward
    every content provider is looking to incorporate more and more DRM as the quality, cost, and ease of creation of copies improves.

    the music industry doesn't care about people copying songs off the radio. it didn't even really get its panties in a bunch when CD-Rs first hit the market. or when mp3s hit the ftp servers. It went ballistic when anyone could download a single application and instantly find a never ending stream of perceptibility loss-less perfect digital copies.

    likewise with the MPAA and DVD en
    • "They want to cut out MythTV, Tivo, splitters, H-cards, and cable descramblers. It's becoming too easy to get at the current data, so they want a change."

      I think you're way off for comparing pirate-style technologies along with legitimate ones. H-Cards and cable box descramblers were never about getting access to data or information you had purchased. Anything relating in the defense of H-Cards and Descramblers is legaleze to justify theft. Tivo, MythTV, splitters, etc are making use of media/informatio
  • by Suppafly ( 179830 ) <slashdot@sup p a f l y .net> on Tuesday November 04, 2003 @07:10PM (#7391031)
    What's the surprise? People with any kind of feel for the pulse of technology have known for a long time that once digital sales of music finally started to not totally suck, they'd catch on.
    • Right on. It's all about the convenience of not waving around fragile little plastic discs.

      I hate CDs and DVDs so much that I built an IDE RAID-5 1 TB media library server for my home. I rip the DVD/CDs and free myself from the yoke of physical media.
    • by Pieroxy ( 222434 ) on Tuesday November 04, 2003 @07:25PM (#7391177) Homepage
      So that's it:

      1. Find what the customers want
      2. sell it to them
      3. Profit!!!

      At last, the end of the 1.2.3. jokes. We found the missing part!!!!
    • I agree (Score:3, Insightful)

      by whittrash ( 693570 )
      The music industry is finally catching on. They need to give people rights, not restrictions. That is what works. Why should I pay $16 for an album I can't play on my work computer. What is the point of that. I can download whatever I want for free and play it on my work computer or at home and then burn them to disk....hmmmmm, this isn't rocket science. $.99 is worth the convenience for a song I really want, but the price must come down if they expect me to buy songs to hear them once and throw them
      • Re:I agree (Score:3, Funny)

        by Pieroxy ( 222434 )
        The music industry is finally catching on.
        They have always been on top of things!!! What are you talking about?

        They need to give people rights, not restrictions.
        How do you want to control people this way??? They are not going to rely on trust, are they? Come on, this is not serious

        That is what works.
        Selling restrictions sounded more fun!

        Why should I pay $16 for an album I can't play on my work computer. What is the point of that.
        Well, because they want you to? Come on, these people would declare t
    • the surprise is that people are willing to put up with massive restrictions on the use of downloaded files, not to mention their willingness to have their purchases tracked in a fashion impossible in the bricks and mortar / cash world.
  • LP to CD to file (Score:4, Insightful)

    by apoplectic ( 711437 ) on Tuesday November 04, 2003 @07:11PM (#7391039)
    I guess album art is really dead? That's too bad as it is an artform in of itself.
    • Wrong, the iTunes music service includes the album art on each song file, viewable in iTunes by a button on the bottom-left, under the playlists. The album art lives on! Seriously, that's the ONE good thing about buying a physical CD and it's been retained. I don't mind spending money for just a file, I haven't used a CD for anything other than ripping in ages...
    • Online art is a buzzing phenomenon. I'm sure that Album Art will find its place when the realization kicks in that online music sales are to stay.

      I think the big issues might be around a program to print the labels though. There are tons of Mp3 players but one format, how about a label-format that scales properly to most printers?
      • How interchangable are the label programs? I bought the memorex kit, and also bought some jewel case inserts with it. The case inserts were memorex too, so i could use the same program(eXpressit) to do the inserts and the labels. The cd labeling is nice, but i wonder if i could youse other companys or generic label sheets with the same software. Are all cd label sheets layed out pretty much the same way? The only friend i know of who has one also has memorex, as does my boss here at work.
    • Re:LP to CD to file (Score:3, Interesting)

      by RatBastard ( 949 )
      Album art died when CDs took over. The days of that glorious 12" record jacket and the detailed artwork it could hold have been gone for 15 years.

      As much as the idea sucks, it's a fact of life that things change.
    • If you only buy songs one at a time, and each song must stand on its own, unless they bundle them somehow, you will only rarely buy full albums. Why buy 22 songs when you only want 3 from that album. You will more likely have a folder with an artists name on it, and organize songs that way.
      • Because as Apple has found out nearly half of their sales have been album at a time. It may have to do with the pricing structure ($1/song or $10/album), but somehow I think most people still like the idea of a cohesive set of songs by a single artist. I guess eventually the format of the LP will be dead but it may take some time before we get there.
      • What you describe is true for the casual music listener. But some people are into bands that produce quality song after quality song - and those are called albums. They come with artwork and liner notes.

        There's still plenty of artists recording that can make 10+ good songs and ship them to you as a CD, some with killer artwork to boot. And for some artists, each album has it's own mood as well.

        The album isn't dead, it's just hiding.
  • by grasshoppa ( 657393 ) * on Tuesday November 04, 2003 @07:11PM (#7391040) Homepage
    ...Well no SHIT sherlock!

    Of course the number of units sold online is going to surpass the number of physical units sold. You have a higher availability of product, lower cost, and a greater transport for them that the consumer loves.

    Of course, I am above saying I told you so to people, so I will avoid that in this case towards the RIAA. However, I would like to rub their noses in it, literally, so if someone could work that out, that'd be great.
    • Let's keep it in perspective -- since CD single sales are dwindling away to nothing, it's not too significant to point out that "X bypassed CD single sales". It's a catchy headline, I guess...

      Note also that the reported number of tracks sold by digital download includes both tracks sold as 'singles' and tracks sold on 'albums.' Apple claims that 45% of the tracks sold on iTMS was on albums, so by extension that would imply that the sales of digital download singles is about 55% of the number of download tr
  • by jcruelty ( 602954 ) on Tuesday November 04, 2003 @07:11PM (#7391043)
    they're not talking about all cd sales, just cd singles vs online singles. DUH! hardly anybody buys cd singles anymore. it says nothing about people buying full cds vs online albums.
    • Thank you for pointing this out. I'm tired of this story being posted without the "CD Singles" verbage. Downloads aren't even CLOSE to touching album sales people. Last time I did the math, if Apple meets their 100M song goal for the year, that will be something like 1% of all record sales in the US. Quite a lot, but no where near "more than physical CDs"
    • by helix400 ( 558178 ) on Tuesday November 04, 2003 @07:16PM (#7391096) Journal
      Especially for someone who was so skeptical, yet found an article that "proved" his point. I guess he didn't bother to read even 4 paragraphs down to find these choice quote:

      "Some 7.7 million tracks were bought and downloaded since the end of June - compared with four million CD singles sold, Billboard magazine reported. But some say online and CD single sales cannot be compared because so few singles are now released on CD."
      • And yet the headline still reads, Legal US Music Downloads Beat CD Sales.

        BBC chose the name of the headline, not Hemos, and they chose it to hype up the story to more than it is. Legit downloads beating CD single sales after the discontinuation recording companies even releasing the damn things is not newsworthy. hence the article spun the title around to make the casual reader think that suddenly a new revolution in the music industry was taking place.

    • Reminds me of when the RIAA was quoting figures to show their sales declining, and the figures were for singles, not full albumns. Slashdot was up in arms, of course.

      Thanks for pointing this out.
  • Just Singles (Score:5, Informative)

    by pavon ( 30274 ) on Tuesday November 04, 2003 @07:11PM (#7391044)
    For the lazy, non-RTFA'ers, this is only compared to CD singles, not CD sales in general. So not that surprizing seeing as how small a market that is and how expensive singles are.
    • Re:Just Singles (Score:5, Insightful)

      by jc42 ( 318812 ) on Tuesday November 04, 2003 @07:18PM (#7391112) Homepage Journal
      Well, yeah, but people have been saying for years that most CDs have only one or sometimes two songs that most purchasers want. So in most caseds, a single-tune download has literally replaced a single CD sale.
      • Consider the headline, Legal US Music Downloads Beat CD Sales. Come on, even if legit downloads go on to replace CDs, it's not like they have already, which is what both the headline and the article imply with the title.

        • Whether or not the headline here on slash was misleading doesn't chage what jc42 is trying to say. Downloads are becoming the new CD single without a doubt. He/She's also right that this is something that most of us have complained about a lack of. Sure, the submitter didn't really RTFA, but that doesn't make the article or jc42's point less interesting to me - just misrepresented (not a first here, for sure). Someone with a Mod point please throw jc42's grandparent post an Insightful for me!
          • Whether or not the headline here on slash was misleading doesn't chage what jc42 is trying to say. Downloads are becoming the new CD single without a doubt.

            I agree, but what the grandparent is saying doesn't change the fact that the headline is misleading.

            Sure, the submitter didn't really RTFA, but that doesn't make the article or jc42's point less interesting to me - just misrepresented (not a first here, for sure).

            Yes, in fact, his point is the only interesting point that can possibly be derived from

    • Re:Just Singles (Score:3, Interesting)

      Not only that, but consider this:

      Some 7.7 million tracks were bought and downloaded since the end of June - compared with four million CD singles sold, Billboard magazine reported.

      If I recall correctly, CD singles usually are bundled with a few other miscellaneous tracks, AND cost more than a dollar to purchase. Suppose a CD single costs 2$. In which case the record companies have made 7.7 million dollars off of legit downloading (99 cents a pop), and eight million dollars off of CD singles.

    • Re:Just Singles (Score:5, Interesting)

      by RatBastard ( 949 ) on Tuesday November 04, 2003 @08:13PM (#7391550) Homepage
      Singles used to be a HUGE market. Bands used to release a stream of singles before releasing an album, and many times those singles were not even on the album that would later come out. If you missed the single, you missed the boat. Of, course, this was back in the day of the 45RPM record.

      I used to buy a fair number of singles on 45, especially from bands I otherwise didn't really care for. And for about a dollar a pop, it wasn't bad deal. When CDs killed off LPs and 45's, the market for singles pretty much died for a while. At least until they convinced kids to fork out $4.00 - $6.00 a piece for the little blighters.

      The market for singles died because the record companies refused to take a fair price for songs on CD. And sales forces were focused on the "album", which is odd since most albums of recent music are made up of a collection of seemingly random songs that have no central theme to hold them together. They might as well be collections of singles.

      I think that buying only what you want online is going to bring back the era of the single. I know I've spent more money on music since iTunes for Windows came out than I have for the last year. And why? Because I can buy only the one song I like buy that band I otherwise don't care for. And for a dollar a pop, that's not bad.
  • Doing Well (Score:5, Insightful)

    by Oculus Habent ( 562837 ) * <oculus.habent@gma i l . c om> on Tuesday November 04, 2003 @07:11PM (#7391046) Journal
    Convenience is really the key for online music stores. Browsing from your home at all hours of day and night, previewing a track - something you may not be able to do where you buy music - the ability to "impulse buy" a song you just heard or remembered, and the instant gratification of having it available only a few moments after you make your decision (unless you are on a slow connection) are big factors. The "what other people purchased" up-sell can be a way to broaden your music library as well.

    As the BBC article mentions, it's not a truly fair comparison because it's all tracks sold online vs. only singles. I purchased a number of my tracks as part of an album, and I don't often buy CD singles, either (never, actually). So, it would be nice if we could compare full album sales instead of the unbalance "tracks vs. singles".

    Still, it is nice to see online music doing well - IMHO, anyway. DRM, as always, will remain a key issue here.
  • by dauvis ( 631380 ) * on Tuesday November 04, 2003 @07:12PM (#7391055)
    Of course, these reports will be meaningless to the music execs. Instead of acknowledging that the albums with only or two decent songs are on the way out, they'll continue to blame piracy for the decline of CD sales. I recently signed on with iTunes (for Windows) and I'm enjoying it. iTunes has (what I consider to be) reasonable use policies. I'm not about to give up my perfectly working MP3 player so I was wanting a service that will allow me to make MP3s using reasonable steps. Already, I've purchased more music that I have the past couple of years. And get this... they're all songs that I like; none of the filler crap.

    Eventually, they'll "get it" and realize that their business model is changing and you'll see more services like iTunes.
  • Ogg Vorbis (Score:2, Insightful)

    by Sp4c3 C4d3t ( 607082 )
    I'd buy if it was in .ogg format, but it's not. The problem with these download services is that they're using proprietary formats... like AAC for Apple's, and MS' will definitely use WMA. We should AT LEAST have the option of MP3 if we can't have ogg.
    • Re:Ogg Vorbis (Score:2, Insightful)

      by c0d3h4x0r ( 604141 )
      You're exactly correct... but it will never happen. These online music services are only thriving because they guarantee the record companies and musicians some level of distribution control via DRM (Digital Rape Mechanism). Since Ogg and any other DRM-less format would force the suppliers to completely give up distribution control, they are totally dead-set against it.

      Of course, people keep forgetting that if you can hear it, you can free it. You can rip high-quality copies from any audio device with a
    • And you know what? No one else gives a damn.
    • This is an excellent point, and I find it difficult to believe that so many Slashdot readers are buying into the marketing hype surrounding these snake-oil music download services. Want free, legal, music? Go to your nearest library. A lot of libraries have great music selections. But I digress. Sometimes it seems like slashdot is the cutting edge of intelligent thought and technology, but for some reason when it comes to music slashdotters are just as eager to jump on the bandwagon, even with all the
  • From the article:

    Some 7.7 million tracks were bought and downloaded since the end of June - compared with four million CD singles sold

    When was the last time you even saw CD singles for sale? This is a fairly bad comparison given the fact that the CD single is pretty hard to come by these days.
  • No Repair kits (Score:2, Interesting)

    by wud ( 709053 )
    You cant scratch an Mp3
  • by Anonymous Coward
    A saw an article a while ago that noted sales of online porn (mostly through adult websites) surpassed that of porn sold through traditional venues (e.g. adult video & books sellers). And that was a few years ago. The porn industry adapted to the new technology seemlessly, while making more money than ever.

    Regardless of your opinions of the porn industry (which often does things as shady as the RIAA), at least they know an opportunity when they see it. The RIAA refuses to get a new business model, unle
  • Almost everyone I know uses online sources such as iTunes (myself included) because it's the only way to get one song you like. No wonder more people are using it than buying CD singles, which are not only hard to find, but cost up to $5 for that same one or two songs. However, the same group of people wants an album, we're much more likely to buy it in the store to get the actual disc and the notes. I don't really think that will change unless CD singles get much cheaper and easier to find, or iTunes/Na
  • by NanoGator ( 522640 ) on Tuesday November 04, 2003 @07:19PM (#7391123) Homepage Journal
    ... would have made if this service was out in 1999.

    Granted, legal digital music has been successful, but how many people out there still hate the RIAA?
    To all of those who have called music downloaders thieves, all I can say is I told you so. People are basically honest, and they're willing to pay for good service.

  • ok, ok, we get it. It's about CD singles, not albums.

    But the more interesting thing would be to see how many singles were downloaded off KaZaa alone in the same period.
  • By volume? Or by revenue?

    If by revenue, then HOLY SHIT. Because downloads are a whole lot cheaper than CDs, they'd have to be FAR more popular. Woo hoo!

    If by volume, then BIG DEAL. Because an album on CD has like 15-20 songs on it, whereas a single song download has only 1 song on it. So to really eclipse CD sales, you'd have to see downloads at 15-20x the volume of album sales.

    Of course, there's a lot of crappy songs on most of those albums, which we'd all be better off without. So there's probabl
  • How many of these legal downloads are from the big burst in emusic.com downloads before the (idiotic) change in policy? I know I have loaded up a lot in the last couple of weeks? A lot more than I would have normally.

    This 7 CD set, that 10 CD set, etc, etc.
  • My windows machine has no speakers and no CD-R. I'd love to use iTunes, but the DRM-laden AAC files cannot be freely copied (from what I have been led to believe). My only option at this point seems to be to buy a CD-R (okay, they're cheap), and then burn the tracks to CDs, then rip the tracks back from the CDs and re-encode as high-quality Oggs. There's two problems with that approach though: first, it's a pain-in-the-ass, and second, I'd be multiplying two lossy compression alogrithms onto the music, w
    • iTMS tracks can be freely copied between any number of computers. Up to three computers may be authorized to play your purchased tracks at any time.

      I don't know of any restriction that keeps you from keeping your tracks on 20 computers, and authorizing and de-authorizing them as needed. The authorization process takes an internet connection and about 20 seconds.
  • by mabu ( 178417 ) *
    Isn't it amazing what happens when industry decides to innovate rather than regulate?

    This should be a lesson to all the dumbass music distributors that if they pay some attention to their consumers' needs and interest, and spend more time exploring ways to enhance and expand their market's choices and experience, they will profit.

    Then again, they could just go about suing more people, raising prices and marketing even more crap music, and then go back to whining about how they're suffering.
  • by dbrower ( 114953 ) on Tuesday November 04, 2003 @07:29PM (#7391221) Journal
    This page [history-of-rock.com] suggests that 45 rpm singles were going out at a rate of 1 million/month from the single vendor (RCA) six months after the format was introduced. People needed to buy new players, and the population was lower than today; I don't have any volume figures for 78rpm single volume.

    The question I'm wondering is: how many 45 rpm singles were being sold at the height of their popularity, into what population?

    We are guessing that 7.7M + 4M/month is way low compared to the peak, which I might guess was 10-15 million/month for a smaller population.

    -dB

    • What the hell is a 45rpm single? Is that some type of CD/MP3?

      Did iPods play those? Is that some new hip-hop artist?
    • this page [sympatico.ca] Says that 45 rpm sales finally passed the older format (78 rpm) in 1955.

      If you assume that "hits" are always the bulk of sales, the RIAA Award database [riaa.com] says that ther were 53 "gold" singles awarded in 1968, which I guess to be a representative near-peak sales year for singles. Since "gold" was 500,000 units, it says that top sellers were at least 25M units that year. If you guess that is 1/4 to 1/2 total unit sales, then likely there were 50-100M single sales a year around 1968 in the U

  • Sorry if I act unsurprised, but isn't this really the point we (the "hacker community," if you will) have been making all along? And isn't this exactly the same point that we (or, at least, I) have been flamingly livid with the bozos at the RIAA and MPAA for Just Not Getting? These freaking morons think that new technology is something to be scared of, instead of (*gasp*) exploited.

    Duh.

    Thank God in Heaven above that legit services -- with DRM or no -- have come about, and finally we have some real figur
  • legal music downloads beat sales of 45s and 78s. Woo hoo.
  • Selling more singles online vs meatspace is not going to get the RIAA's attention in the magnitude that the typical Slashdot Music Lover wants it to.

    What will get the RIAA to grab a clue is when one or more of the following happens:

    1) More music is distributed online then in meat space.
    2) Profits from downloaded music surpass the profits from sales of CD's.

    The music downloads allow a way around the CD price fixing that led to the RIAA's problem. Once the online services surpass the RIAA, the RIAA will
    • The music downloads allow a way around the CD price fixing that led to the RIAA's problem. Once the online services surpass the RIAA, the RIAA will really be in an Adapt or Perish situation.

      Except for the fact that all the songs on the services are licensed from the RIAA, and they are all paying fees to the RIAA. Apple gives half the money they make to RIAA members.
  • by nizo ( 81281 )
    The collective DUH from the slashdot crowd sounded just like the Taos hum, only louder.
    • I want the physical media for storage and backup. I'll rip it myself.
    • I want the full quality CD. 128kbps just doesn't cut it.
    • I want the cover art, inserts, etc..
    • DRM
    • All the above
    • Kazaa
    • CowboyNeal
  • The headline should read "Legal US Music Downloads Beat CD Single Sales".

    The comparison implied by the "Legal US Music Downloads Beat CD Sales" is broken in several ways:

    1) "Legal US Music Downloads" includes both album and single sales, while "CD Sales" refers only to CD Single sales. So it's not an "apples to apples" comparison.
    2) "CD Sales" actually refers to CD sales, which are vanishingly small compared to CD sales (e.g. 2% according to Soundscan) so it's not only wrong, it's misleading by a factor o
    • The headline should read "Legal US Music Downloads Beat CD Single Sales".

      The comparison implied by the "Legal US Music Downloads Beat CD Sales" is broken in several ways:

      1) "Legal US Music Downloads" includes both album and single sales, while "CD Sales" refers only to CD Single sales. So it's not an "apples to apples" comparison.

      2) "CD Sales" actually refers to CD Single sales, which are vanishingly small compared to actual CD sales (e.g. 2% according to Soundscan) so it's not only wrong, it's misleadin
  • Give people something close to what they want with liberal use policies and people will buy into the service. True, the DRM is still present, but it doesn't really get in the way (other than having to burn the songs to CD then rip to get the music to an open format). Give the providers some time to ramp-up the selection and these services should do very well.

    On the negative note, I still think the songs are too expensive by about $0.30 (on the RIAA side). Drop the price overall and further on some for some
  • by ryantate ( 97606 ) <ryantate@ryantate.com> on Tuesday November 04, 2003 @07:46PM (#7391330) Homepage
    I didn't even need to click. I've been doing the math to figure how big a deal this iTunes thing is (not big, at least not yet).

    Here are the numbers. The U.S. record industry sold $12.6 billion [riaa.com] worldwide in various formats (almost all CDs) in 2002. This is off a bit from the peak $14.6 billion in 1999. It's important to keep in mind that, even at those levels, we're talking about nine weeks revenue for IBM [yahoo.com].

    Assuming the Windows side of iTunes Music Store continues to sell at the initial rate [macworld.co.uk] of 1 million songs/$1 million revenue in the first 3.5 days, that's only about $104 million per year. The Mac side sold $13 million in tunes in the first six months [nytimes.com], so we'll put that side at $26 million per year.

    That's $130 million per year for all iTMS. Even if the store doubles its sales, and then the other stores collectively match its sales, you'd be talking about total online sales of $520 million per year, still a drop in the bucket.

    The growth will need to get exponential before there is any comparison with offline music sales. I'm not saying it won't happen, but that's what we're talking about, and that's how I instantly new the hed on the posting was wrong.
  • This is a silly comparison... I've never seen a CD single that contains fewer than 2 tracks, with 4-5 being most common. So 4 million singles = 16-20 million tracks, compared with 7.7 million tracks downloaded. Getting impressive, but still not quite there.

    [TMB]
  • If Digital sales quickly surpass physical disk sales, perhaps rather then the RIAA suing 12 year olds, RIAA stockholders can start suing the RIAA for fucking up their stock value for so long by resisting digital distribution.

    (I know that the RIAA is made up of multiple companies, but they pretty much act as one..)
  • the poor artists (Score:4, Insightful)

    by thanjee ( 263266 ) on Tuesday November 04, 2003 @08:50PM (#7391904) Journal
    It is good that people are now paying for the music they download, but a lot of people don't understand that the artists get very little of this money. Generally a band will only get 10% - $1 for the entire album downloaded, whereas the record company gets $9 for each album downloaded.

    In the CD world, 10% ($2) was a good deal for the band because the record companies had to pay for manufacturing, cases, booklets, shipping and publicity, which is quite costly. But now they don't have to do anything - it is pure profit for the record companies, so they should be passing on a higher percentage of the profit to the bands.

    Until They change how much the bands get payed for digital downloads I will stick to buying CDs. Plus I like getting booklets :)

  • Why "sadly" (Score:3, Insightful)

    by geekee ( 591277 ) on Tuesday November 04, 2003 @10:57PM (#7392800)
    "The BBC story refers to CD single sales, so Mr.McNeill maybe not be quite as right as he thinks, sadly."

    Who cares which is outselling the other, as long as the consumer has the option to buy either.

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