Music: Now Less Important Than Ever?

Aug 27th, 2007 // 12 Comments

72124700.jpgDigital Music News has a brief item about the de-emphasis of music at major music retailers like Virgin Megastore and Trans World, which has chopped its music-specific inventory to 43% of its stores’ total offerings to last year’s total of 47%. And when you combine that with the below stats from the in-depth Billboard article on the current state of artist development (sub. req.), which is full of so much good/depressing information that I’ll probably be referencing it all day, the state of the recorded-music-selling business becomes even bleaker than previously thought (although at least it makes the Trans World/Virgin cutbacks seem a little less dire):

Independent stores and regional chains, known for embracing developing artists, are critical in helping labels develop artists market by market, so that eventually baby bands would garner enough sales to convince the big boxes to take a chance.

That process was easier in 1991, the year that Billboard began using SoundScan data to determine chart placement. Billboard estimates that, at that time, there were 4,700 traditional chain record stores–at least 10 chains each had 100 stores or more–aggregating to a 47% market share. Some 6,000 independent stores yielded a 15% market share, 8,000 mass-merchant stores took a 23% market share, and the record clubs and mail-order companies had a 15% share.

Today, following mass consolidation, price wars and bankruptcies–most recently underscored by the 2006 closures of Musicland and Tower Records–Billboard very roughly estimates there are about 1,400 traditional chain music stores with about a 6% market share; roughly 1,600 independent stores with a 5% market share; digital stores’ album sales including TEA (track-equivalency albums, or equating every 10 tracks sold by one artist with an album sale) are at a 24% market share; other nontraditional retailers like record clubs, Amazon, Starbucks and concert album sales account for about 8%; some 7,000 mass-merchant stores yielding approximately 31%; and about 2,000 consumer electronic and book stores with about a 26% market share.

Sure, these numbers are very rough, but they’re still staggering; in addition to the collapse of the chain-store backbone, the 71% drop in total chain music stores and a 74% drop in the number of indie stores in 16 years are pretty alarming when you look at the numbers in black and white. (Also, how about the near-total demolition of record clubs? Guess once those “10 albums for a penny” ads went away, so did the parade of suckers lining up to buy half-artworked albums six months after release date.)

Diversification Pushes CD Prospects Southward, Analyst [Digital Music News]
SEEDS OF DOUBT: ARTIST GROWTH [Billboard.biz, sub. req.]

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  1. the rich girls are weeping

    Gotcha. Low blood sugar dissonance/reading incomprehension moment.

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