Music streaming had a bumper year with listening increasing by 50% over 2016 in 2017 according to a report from BuzzAngle but don’t expect to see too many artists applauding it.
While the music labels were making hay with streaming activity the year was devastating for retail with album sales down 14.6% made up of physical album sales down 7% and digital album sales down 22.6%.
With the physical disc continuing to wane, artists can expect more pain as the trend continues which I explain why later in this story.
CD sales were down 9.4% for the year but vinyl had another increase, up 20.1% for the year.
Without digging into the facts about the figures, album consumption appears to have increased by 12.8% to 603.2 million “sales” but that is only because of that unreliable algorithm coupling listening with purchasing. The figures make sense in a stand-alone scenario but cannot be compared to the past because listening wasn’t factored into sales until recent years.
For example, it is just plain ridiculous to compare the number of hits by Elvis or The Beatles with Justin Bieber and Ed Sheeran. Buying a product from a shop during retail hours controlled by a manufacturing process is totally different to today’s consumption, which is like turning on a tap. Every song today is effectively a single immediately it is released. That did not ever happen in the physical world. The formula today is totally different to yesterday and cannot be equated.
Some of 2017’s sales highlights:
Ed Sheeran had the biggest “selling” album of 2017 with ÷ at 2,645,600 units. However instead of calling that figure “sales” it is now referred to as “total project consumption”. Taking away the “consumption” Taylor Swift actually outsold Sheeran with ‘reputation’ moving 1,899,772 units to Sheeran’s 1,042,255. (CD, vinyl and downloads combined but not including streaming).
Luis Fonsi and Daddy Yankee ‘Despacito’ was streamed 1.1 billion times making it the first billion-stream ever. It was the most streamed video as well with 594,059,722 streams.
Ed Sheeran ‘Shape of You’ was the year’s most downloaded song (2,653,251 sales). Sheeran also had the most downloaded song on Christmas Day with 32,888 sales of ‘Perfect’.
So was it a good year for the music industry? Answer: Yes … but not for artists. With the increase in streaming mainly through Spotify and with the major labels holding a major shareholding in Spotify and with Spotify about to float, the major labels will make a killing in 2018 and the artists will be screwed big time.
The business play is extremely dirty and all weighted to the labels. The labels received their Spotify shareholding in consideration for the use of their artist’s copyright. That is considered a capital investment. Artists are then paid when their songs are streamed but are not entitled to anything for the capital investment (shareholding). That all goes to the record company and its shareholders. The rich get richer, the poor get the picture. The Spotify float will generate billions for each of the three majors and artists won’t be entitled to any of it, even though it is their copyright that created the shareholder value.
When artists work out what is really going in it is going to be a very interesting 2018.
