Digital Media Digest

Ships vs. Scans vs. Revenue.  Only 1 of these is valid in today’s market, but there is a strong resistance against realizing this fact.

Ship numbers give us hope.  Hope that if we put enough product out there, if we just badger enough people, if we just show up for the party…we will have a chance to win.  This is irrelevant and a false sense of security.  Demand moves product, not availability.

Scans give us a false sense of success or even failure at times.  A scan is a unit, but the unit price is variable.  If you scan a 100K units but it’s because your sales team was selling the product in at a greatly reduced rate, success is just a ruse.  On the flip side, if you scan 100K units when you meant to scan 150K, but your tracks sales, which don’t count towards scans (see TEA) tally 500K because you had a hit single at radio, what have you lost?  You may need to readjust your strategy for greater success in the future, but the bottom line is still, at present, sitting pretty safe.

Revenue is the only gauge for success anymore.  The number of revenue streams and channels available for monitizing changes the game entirely.  It’s not about a format.  it’s not about a silicon disc.  It’s about supply and demand.  It’s back to the basics of business.  At the end of the day who cares if your artists sold 50 times more tracks than albums and 100K ringtones instead of cummulative track downloads.  The beauty is that consumers are transacting and every time they do, they communicate who they are, where they are, and what they want.  It’s our job to adjust and maximize the potential in every corner of that market.

I leave you with a quote from Rio Caraeff, EVP of UMG’s Digital Division.

“We don’t focus anymore on total album sales or the sale of any one particular product as the metric of revenue or success.  We look at the total consolidated revenue from dozens of revenue lines behind a given artist or project, which include digital sales, the physical business, mobile sales and licensing income.”