The infographic from Information is Beautiful to the left has been doing the rounds recently, and causing some debate (there’s also been mucho discussion previously over at GYBO about digital distribution models vs streaming and physical CDs which this drops quite nicely into).
Steve Lawson says quite rightly it’s comparing different things, that streaming services such as Spotify isn’t about selling but promotion…I would take that further and say the problem with the graph – or more likely those who read it -is there is an implied top to bottom causal relationship, that a comparison is taking place which doesn’t happen in the real world.
One namely of ‘footfall’ – how does one discover something? – but also that the categories aren’t exclusive – a streaming service could lead to a CD or digital sale, a CD sale could lead to streaming revenue cos the person has left the CD at home or lent it to a friend who’s given it back. Spotify although small in revenue is the way things are going, as Steve points out not as a primary revenue stream but a promotion stream, but as the millions go into 10s or 100s then of course revenue will be higher – we may scoff at 4 million views needed at the moment, but I’m thinking in the future that’s going to be seen as small-fry as the US & other areas get Spotify and other services.
When the world gets Spotify, it’s going to be touching the billion for a very popular track, as people listen to it more than once….
Also not included is the likelihood of a purchase. Yes a self-made CD-R from the artist WILL create the most profit for the artist… but how many people will either get the chance to do that or want to – the perception that the music or object has some worth is quite intangible & hard to graph but it’s part of the sale. Yes a hand-drawn scribble from some unknown artist MIGHT be worth millions in future years – but how many people would plunk down the change to buy it? That’s not to diminish CD-Rs or napkins – because the old adage is ‘if you like it, buy it’ is very true – but the mental marketing perception that it’s a good well-made packaged thing be it a house, desk or a piece of music – is ever-present in everyone’s head. Is it quality? So cheaper modes of production do not always win, which is why 7″ vinyl and special limited edition digipaks and handmade covers still survive. Also the personal/limited aspect is part of it, that can also imply value (even as a future eBay sale) in the mind of the buyer.
The future will be a blend of these, and yes some people will always want a physical product, some will prefer digital, some will prefer streaming services. It’s a multichannel approach, and to say ‘ooh this means I’m going to put out only CDs and not use Spotify’ is blind to the fact that new discovery of music comes across many channels now – not just the old radio/broadcast model. And streaming services, along with YouTube, Facebook, Twitter, podcasts, blogs et al are part of that.
Interestingly the original post the first graph comes from was intending to debunk the theory that artists can make a living from digital revenues as stated in the Digital Economy Bill, to I’m guessing point out the Act is protecting no-one and that the piracy fight is a pointless one. A far more useful graph for doing that is so even though album sales are down the industry is still making massive profits, and now 4.2 billion on online sales alone? Piracy, what piracy? Look at that graph when the industry claims it’s being destroyed by pirates and filesharers, it’s actually in rude health, has been for years.