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Rory Cellan-Jones

Green shoots in the music industry?

  • Rory Cellan-Jones
  • 16 Jul 09, 08:52 GMT

Is it possible that the music industry has finally spotted the light at the end of the tunnel - and it's not the flashing light on the oncoming Pirate Express locomotive?

Man listening to musicThis week a big piece of research has come up with two startling conclusions - that illegal downloading amongst young music fans has actually gone into a decline, and that the CD is still the most popular format, even amongst teenagers, and is not ready to be sent to the digital graveyard just yet.

The research, by a media agency The Leading Question and a digital music consultancy Music Ally, questioned 2,000 music fans about their habits.

It found that 73% of them preferred CDs to downloads, and even amongst teenagers the figure was 66%. But what the industry will really latch onto is the figures from the same survey released earlier this week.

They showed that the percentage of fans file-sharing had fallen 22% in the same survey in December 2007 to 17% in January 2009. And the fall amongst 14-18 year olds was much more dramatic - down from 42% to just 26%

The conclusion drawn by the researchers is that habits amongst those digitally aware consumers who don't buy CDs are changing - they're moving from downloading illegally to streaming legally.

They're still not paying for online music then, but at least they're using legitimate services. And here in the UK, it's one business, Spotify, which is getting a lot of the credit for that change.

The ad-supported streaming service was among those involved in a debate in London last night about the future of music entitled "Who Pays the Piper?". Like many such events, it reached no firm conclusion.

On the one hand, the new media types trotted out their usual refrain about the glacial pace of music industry change - and showed a touching faith in the likelihood that advertising and gaming would pay for us all to have free music.

On the other, we heard a counterblast from Helienne Lindvall, a Swedish songwriter and music blogger, who lashed out at the Pirate Bay, YouTube and last.fm for profiting from music without being willing to reward artists.

Overall, there was a sense that progress was finally being made in the search for a business model which would work for the artists, the labels - and the fans. But there were a couple of sobering moments.

First the audience was asked who had used Spotify - everyone in the room put a hand up. But when we were asked who had paid for the premium service (unless that takes off Spotify is unlikely to have a long-term future) and just one hand went up.

And there was a sobering message from an American in the audience who claimed to have spent decades in the industry, from a spell as Little Richard's PR man to a role in a new legal version of Pirate Bay. "Everyone has overvalued the music," he told us, "it's not worth as much as content owners think it is." That seems indisputable - the days of the £15 CD are now a distant memory and music market deflation probably has some way to go.

But industry bosses think they've finally started coming up with services that might woo young users away from the likes of Limewire and Pirate Bay. All they have to do now is find advertisers - and consumers - willing to pay for the music.

Comments

  • Comment number 1.

    A very interesting artice, good work.

    By the way, a small clarification: when you say "Down 22% to 17%" do you mean it dropped from 39% to 17%, or do you mean it dropped from 22% to 17%?

  • Comment number 2.

    This research shows how little the music industry knows about, well, their own damn industry.

  • Comment number 3.

    Sorry I find it hard to believe that 6/10 teenagers would prefer to get their music on a CD and not just instantly download it off the net.

    We have all been saying along that once more reasonable services come along that we will stop using pirated stuff.....finally that is slowly beginning to happen.

  • Comment number 4.

    The days of the the £15 CD are only over if you are buying pop rubbish. If you are interested in classical (perhaps less so), jazz, folk, etc - i.e. what is seen as 'unpopular music - you are still paying through the nose. I paid £19 for a new CD from an obscure (to most people) Australian Jazz/Blues guy from HMV last week. Which I resent, but it's the only time I ever saw it for sale, it's so obscure the guy's not even listed on itunes!

  • Comment number 5.

    There are some things that should be cleared up here. The research you mentioned is actually quite misleading. Firstly, the sample size was actually quite small for something that claims to represent all teenagers (just 1000), and it ignored certain key elements of file-sharing. It didn't take into account people emailing songs to each other, or offline file-sharing, like exchanging whole hard drives of music and blue-toothing tracks between phones. Now that people know there are higher risks involved in using illegal download sites, many are just moving to methods that are more difficult to track.

    Also, you should point out that while a lot of people are saying that the advertising model is the future of music, there are no companies who have yet managed to make this model work. True, the recession has had an effect on this to an extent, but it wasn't exactly taking off in the first place.

    Part of the problem with these 'music industry' events is that they're generally attended mainly by tech people who don't really understand the music industry. There's this myth that bands can give away all their recordings and make all their money back on T-shirt and gig ticket sales. The truth is, most bands don't sell that many T-shirts and, until you've hit a certain (usually major label-funded) level of success, you aren't going to make that much money from touring. And what about artists who don't tour? Not everything exists to be played live - large amounts of electronic music, for example.

  • Comment number 6.

    "The conclusion drawn by the researchers is that habits amongst those digitally aware consumers who don't buy CDs are changing - they're moving from downloading illegally to streaming legally."

    Or one of them is downloading and then passing CDs and DVDs full of MP3s round to their friends, or even passing the original CD (or a copy of it) to their friends.

    People have always swapped music and nothing the music industry can do will ever stop that, and of course we all remember "Home taping is killing music" which turned out to be just a rather bad lie: 25+ years on and music is still going.

  • Comment number 7.

    Research done by one company will say one thing, and research done by another company will say another.

    In the words of Churchill: there are lies, damned lies... and then statistics.

  • Comment number 8.

    "The days of the £15 CD are now a distant memory..."

    Have you been into HMV or Zaavi recently? Plenty of CDs for sale there for more than £15.

  • Comment number 9.

    @ #1
    Mathematically a 22 per cent drop to 17 would be from 22 per cent.
    22 per cent of 22 being 4.84
    22 less 4.84 basically being 17.
    I also think that 39% to 17% is MORE dramatic than 42% to 26% - as it is 22 percentage points versus 16 percentage points.

    Anyway no journalist ever presents maths correctly.

    As to what music is worth - what we are preapred to pay?
    Another angle. If I am a small artist likely to sell only 10000 albums and it costs me £10000 of studio time to make my album, plus £1 to produce each CD + cover sleeve, then I need to sell each album for a minimum of £2.

    If I am a bigger artist and will sell 1000000 albums and it costs £100000 to make the album, but now only 80pence to produce each CD + cover, then I need to sell each album for a minimum of 90pence to break even.

  • Comment number 10.

    @8 - no one has been to Zavvi recently, there are no more shops called Zavvi. My local one is now called Head... No idea if they where bought out and the new owner changed the name or if my local store is now another company but either way there are no more Zavvis.

  • Comment number 11.

    This tells us nothing, so 6/10 teenagers prefer CDs to downloads, well 10/10 would prefer prime steak to cheap burgers, that doesn't mean that they are all buying steaks instead of burgers does it?

    Meanwhile yes filesharing probably has reduced somewhat, however that is due largely to the increase in use of services like youtube, lastfm, spotify and myspace as legitimate free sources for music.

    People in general, including teenagers, will only spend so much on music, the rest will be got for free.

  • Comment number 12.

    Statistics can say anything you want them to say.

    The fact is this: today's generation no longer see music as a product you buy; they see it as something you hear, like then get.

    Everyone in my school sends music to each other via Bluetooth on their phones and they rip the audio from music videos on YouTube.

    Extracting the audio from Spotify streams is quite easy too.

    All of these things have just become routine, instead of thinking about buying music from iTunes they get the video from YouTube.

    This is how culture has evolved and no amount of legal action by the entertainment industry can change that. Instead, the industry itself has to change to adapt to this, and I'm afarid they may have done - and be doing - too little too late.

  • Comment number 13.

    There is another aspect of the problem of the music industry which has not been touched on. That of reproduction quality. The vinyl disk was replaced by the CD - and things got better. Then the CD was invaded by the MP3- worse, then the MP3 was supplanted by Streaming - much worse. So that today we have a music distribution system that is getting poorer and poorer.

    What we need to see is a file download system which actually improves the quality of the music reproduction. Son smaller record labels (for example Linn Records) are doing this, making available downloads - without the dreaded DRM - of music that is at least technically two times better quality than CD and perceptually many times better.

    Yet the industry does its best not to support this improvement, it has crippled both DVD-Audio disks and Blu-Ray audio with encryption and DRM.

  • Comment number 14.

    @4 I got something that might even be classed as fairly mainstream in the US that didn't take off in the UK, and similarly something reasonably mainstream in Australia that didn't take off in the UK, so only available via Amazon import or similar. Both of these about the £16 mark. So, it's not just in classical and jazz (although I have seen it in both) where expensive CDs exist.

    @8/@10 for mainstream stuff, Zavvi/Virgin was probably overpriced compared to its competitors - that's why it went bust. Head seems to have opened in some old fopps - didn't know it was doing the same with old Zavvis too.

    @9 - good points

    @13 I suspect that the Linn downloads are technically two times better, but perceptually only 10% better. I think that a well recorded CD played on a good system will sound a lot better that most people would expect. My system is far from the top end of CD reproduction, but still sounds very good, and really don't think even the "perfect sound, as it should sound, made by the perfect format, better than SACD or DVD-Audio on the perfect system" would be twice as good to my ear.

  • Comment number 15.

    @13 - very few people care about the reproduction quality because when it's played on MP3 capable devices via headphones the difference between formats is barely noticeable.

    @9 - that begs the question that if CDs are so cheap to produce why are they so overpriced?

    @4 - I am a fan of Iron Maiden (a proper british heavy metal band) along with some others as well and I very rarely see any of their albums for under 10GBP unless their old or second hand, that's of course assuming I can find a shop which sells music in the commercial black hole commuter town that is Braintree, Essex.

    The music industry reap what they sow. They killed off Napster instead of embracing it and turning it to their advantage, now their profit margin is allegedly being squeezed. Oh ce la vie.

  • Comment number 16.

    @syganymede and indeed, @ravenmorpheus,

    There is an incredible culture of distrust of MP3 and OGG formats among audio enthusiasts. I mention those formats specifically, since they are lossy compression codecs - codecs that destroy certain information from the raw CD audio, in order to save space.

    The truth is, MP3/OGG files can be of incredibly high quality, if they are encoded properly, and encoded at a high enough quality. I fear that the mentalities that you have both presented exemplify the attitudes of many people, even today, since they are too used to the common, poor quality 128kpbs MP3 file, that tends to be poorly encoded.

    I suggest you get one of your CD's, encode one of the tracks to WAV or FLAC (lossless compression formats), and then encode it to a high-quality MP3 or OGG file. Do you hear a difference? I don't.

  • Comment number 17.

    @synthil - well as I'm not an audio enthusiast I find the MP3 files I have, which btw are 192kpbs, usually, to be perfectly adequate.

    The average joe doesn't care about the quality as it's irrelevant when the song is being played on a mobile phone, which often has a very poor speaker, or via headphones from said mobile phone or MP3 player.

    Audio enthusiasts are just that, enthusiasts, and by and large the term "enthusiast" is synnonymous with minority.

    I'm sure a whole other blog about lossless formats vs MP3 could be written (and perhaps as Rory would care to do some research and write such a blog?) but at the end of the day average joe doesn't care as long as the MP3 file he/she has is of acceptable quality and he/she can play it on their device of choice as much as they like and it costs them 0p or as near as.

    And quite frankly like the average joe I couldn't be bothered to re-rip a CD in WAV or FLAC (after finding the correct codecs or a ripping program that will do it) to then re-encode it in a high quality MP3 or OGG file when a straight rip to a 192kbps MP3 file is perfectly acceptable.

  • Comment number 18.

    Well, as this particular blog expresses the increase of CD sales, I would suggest that it is the enthusiasts, the 'minority', that is fuelling this increase. People buying CD's in mass quantities from cheap delivery websites.

    I never suggested you rip from WAV/FLAC to then re-encode to MP3 or OGG. Rather, to rip one track to a FLAC or WAV, another track to an MP3 or OGG at a high bitrate like 256kbps, and then to compare the two in terms of audio quality.

  • Comment number 19.

    Hmm ...

    A) "you can have free music as long as you get adverts or DRM with it" or
    B) "you can have free music, no DRM, no adverts, nothing but the music".

    What would you choose?

    I plumb for B every time, why? Simple! "Music" these days is not worth the CD it's written on. Manufactured rubbish after manufactured rubbish.

    Please, perhaps if we had music that was worth buying and offered Ad-free, DRM free and at a reasonable price, maybe we would? Or perhaps there are people who think like me, download the cd, like it? Pay to see them - make a donation to the artist directly and cut out the middle-men, afterall, what input do they have to the emotion, creativity and scenarios sung about? None. They just cream off the money for themselves - don't believe me? Ask Simon Cowell to sing. He can't. His "talent" is spotting people with talent - in fact, I don't think that's right, I would say his talent is spotting people that the common "heat" magazine and celeb-obsessed idiots would hand over their money to him for.

    Piracy has always been around and always will, the propaganda surrounding it will also be around - you're hardly likely to see the truth as it's designed to vilify the people who download music for free. It's not killing anyone and perhaps if you wanted a true idea why people download illegally, ask them but don't be afraid to write their thoughts and responses just in case the internet police will think you condone it.

    For example, if I wrote on here that "I pirate music and my reasons are xyz" then the BBC would not publish my comment; they refuse to hear why I would do this. A pirate is not a bad person, just because *you* would d rather pay money for something, that sir, is not my problem. I'd rather have it free and better quality then what you've just forked out £10+ for.

  • Comment number 20.

    You know, I swear if every major label out there started making vinyl albums again, people would buy the.

    Yes, I know they are worse quality than CD (and before anyone shouts at me, I am a recording engineer, so this bit I actually know about), and I know that they are a pain to look after, but if every high street had a small store with a coffee/soda bar, a duke box with the best indie stuff on it and sold albums and record decks, we would see a big change in the industry

    And what is more, many teenagers could be weaned off these wretched PCs!

  • Comment number 21.

    what makes you think vinyl is worse quality than cd? It's much better! That is vinyl that is well manufactured.
    @14 don't knock high resolution downloads until you have tried them. Several labels are now offering studio master downloads which are way beyond the petformance of cd. If more labels start to record at high resolution it may well be the end of CD.
    There's nothing better than sitting down at the end of the day and enjoying listening to music properly - and that means not some crappy mp3 through your phone. They were designed for phone calls and not to listen to distorted music.

  • Comment number 22.

    Gurubear

    A friend of mine is saving up for a Vinyl record press.
    They're not cheap but if you love that Vinyl sound and maybe if you've got enough friends who'd be happy to chip in then it may be a worthwhile investment.

    They are becoming more popular again thanks to DJ's, there are so many kids who have their own Decks & Mixer at home these days that demand for Vinyl has gone up quite a lot recently, we've got a few good record stores around here and you've got to get in quick to get the new records as they're selling out far faster than a few years ago.
    There's also a lot of new on-line Vinyl specialists that have started up in the last few years, some of the good ones let you buy directly from the artists and just charge a couple of pounds for p&p and administration costs. This means a lot of independent artists are able to sell their music without a record label.

    Check these out:
    https://www.vinylium.ch/page/content/view.asp?MenuID=22&ID=19&Menu=1&Item=10

 

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