2008 « Digital Media Digest

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Ken Barnes – USA Today

January 16, 2009 at 4:48 am | In ...And I Quote, Music Business | Leave a Comment
Tags: 2007, 2008, Album, Downloads, Ken Barnes, Math, Music, Physical, revenue, Sales, TEA, USA Today

“Americans bought more music in 2008 than ever before, but album sales — the music industry’s main source of revenue — dropped for a fourth year” – Ken Barnes – USA Today

For starters…this quote doesn’t make any sense (It’s okay…read it again if you didn’t catch it). I’m not sure Ken even read his own article because his numbers don’t add up. Yes. Ken Barnes reports in his recent article on the Music Industry, Music Sales Boom, but Albums Fizzle for ‘08, that $535.4 million is actually greater than approximately $585 million.

“Even combining album and track sales…, the 535.4 million total is still down 8.5% from 2007″

Perhaps it would be wise for USA Today to require an entry level math test in their job application process.

Math According to USA Today = 535 > 585

Math According to Everyone Else = 535 < 585

Okay. So of course I’m being facetious and maybe a little to harsh on Ken. We all know what he means, but this strikes a chord of frustration with me. Americans aren’t buying more music if music revenue is down 8.5% because the price of music hasn’t dropped 8.5% in the last year, which means this is a volume issue. There are reports about how people are consuming more music than ever before and I can legitimately buy into that reasoning, given the number of free music channels, but Americans did NOT “buy” more music in 2008.

They bought LESS. Almost 8.5% LESS

As a matter of fact, according to Ken, 2008 revenue is “30% below” that of the year 2000 so Americans certainly didn’t buy more music “than ever before”. A consumer may buy 5 songs from 5 different artists and therefore consume more types of music and perhaps even execute 5 entirely different monetary transactions, but only generate about half of the revenue that an album would generate in addition to only buying about half of the musical content found on one typical album (see TEA).

You all know this. The reality isn’t shocking. The numbers aren’t even shocking anymore (especially for those of us in the music industry). It’s the spin that drives me crazy. Let’s just be honest and admit that until we see a percentage increase in sales, American’s are not buying more music.

Q4 2008 – Media Industry Shrinkage Recap

December 31, 2008 at 2:42 am | In Music Business | Leave a Comment
Tags: Media, 2008, Music Industry, EMI, revenue, Walmart, Shrinkage, Q4, Layoffs, Bankruptcy, Administration, Circuit City, Yahoo, Sirius, iPod, Best Buy, Economy, Borders, Electronic Arts, Warner, Sony, Atlantic, Live Nation, Ticketmaster, Dell, BitTorrent, Employees, Tweeter, eMusic, iMeem, Worldspace, Pandora, Sony Ericson, Thumbplay, Buzznet, Radio, Woolworths, Pinnacle, Real Networks, Viacom, Fusion, NPR, Last.fm

This list is compiled mostly from Digital Music News headlines and Tech Crunch. I wanted to put together a very quick time-line on the state of media/web industry shrinkage in Q4 2008. While there was growth in small doses, the economy fallout served as an overarching force of destruction industry-wide. These selections are ones that stuck out to me. For a more complete list, try the links above.

Dec. 20 – Electronic Arts (EA) lays off 1,000. Plans to shut down nine of its 50 facilities
Dec. 19 – Circuit City vacates 154 leases on stores earmarked for shutdown
Dec. 18 – Equity Music Group shuts down
Dec. 17 – Best Buy offers voluntary layoffs
Dec. 15 – Layoffs at Sandisk
Dec. 12 – Last.fm reaches 20% reduction (20 employees)
Dec. 10 – NPR downsizes 7% (64 jobs)
Dec. 9 – Layoffs at Sony (8000)
Dec. 9 – Fusion enters Bankruptcy
Dec. 8 – Alliance Entertainment announces downsizing
Dec. 5 – Real Networks (130) and Viacom (859) downsizing
Dec. 4 – NBC lays off 500
Dec. 4 – Pinnacle Distribution (UK) enters into Administration (Bankruptcy)
Dec. 3 – Brightcove lays off 15 (25%)
Dec. 2 – Borders reduces floorspace
Nov. 30 – Woolworths (UK entertainment distribution) finds itself in Administration (Bankruptcy)
Nov. 26 – Warner Music Group announces a “sell” stock rating with little chance of recovery in the near future
Nov. 26 – Altantic records hits 51% digital. Evidence of a deteriorating physical revenue stream
Nov. 26 – Radio Revenues slip 9%
Nov. 25 – Sirius XM stocks continue to plummet
Nov. 25 – Year-over-year album sales in Oct 2008 down 19.4%
Nov. 23 – Layoffs at Buzznet
Nov. 20 – First iPod sales decline projected
Nov. 20 – Live Nation stocks hit all-time low
Nov. 18 – Warner Music Group stocks hit all-time low
Nov. 16 – Layoffs at Siriux XM
Nov. 14 – Layoffs at Thumbplay (15 employees/20%)
Nov. 11 – Ticketmaster Earnings Down
Nov. 11 – Wired.com lays of 12
Nov. 11 – Virgin Mobile lays off 2200
Nov. 10 – Circuit City declares Bankruptcy
Nov. 10 – More layoffs at Sandisk and Sirius XM
Nov. 10 – Dell shelves it’s $100 mp3 player due to economic reasons
Nov. 9 – BitTorrent cuts 18 more employees (50% of workforce)
Nov. 7 – Circuit City lays off 800
Nov. 6 – EMI looks to outsource physical distribution after a disastrous quarter
Nov. 5 – Tweeter announces store closings
Nov. 4 – Plunging automobile sales produce less demand for Sirius XM dashboard models
Nov. 4 – Walmart threatens more shelf space shringage
Nov. 3 – Circuit City sheds 155 stores
Oct. – EA lays off 600
Oct. 30 – EMI posts annualized loss of 757 million pounds
Oct. 30 – Layoffs at eMusic
Oct. 29 – SonyBMG posts $57 million loss in Q2
Oct. 23 – Layoffs reach highest level since 2001
Oct. 22 – Ticketmaster Lays off 300 (5% of global workforce)
Oct. 22 – Layoffs at iMeem
Oct. 22 – Dell lays off 8900 (10%)
Oct 21 – Yahoo Lays off 1500
Oct 21 – Worldspace files for Bankruptcy
Oct 19 – Pandora lays off 14%
Oct. 16 – Sirius XM lays off 50
Oct. 14 – Layoff Documents emerge at Sirius XM
Oct. 3 – Ebay lays off 1300
Oct. 1 – Sony Ericson starts Layoffs (2000K jobs)