Life Without a Net: The Virtual Musician Part 1

In an attempt to be informative on the current state of the music business, I find that it may be good to look at where we are now and where things are going. If you ask different label heads, publicist, booking agents or musicians themselves, you will get a different answer every time, but, one thing that is consistent is that the CD is in a death spiral and the industry itself may be to blame.

The actual numbers of CD’s sold is continuing a steady decline every year. The closing of the New York Virgin Mega store alone cost a 2% drop in music sales.  Wal Mart announced this year they were cutting in half the shelf space for CD music. The fact is that the end is still not in site.

The fact still remains that 63 million people buy only CD’s. That is twice as many as imusic buyers. They have found out recently that 58% of iPod buyers have never downloaded from a legal music source. In fact 3 out of every 4 13-25 age bracket individual has never bought a legal download. They are using file sharing and mobile download options.

One fact still remains; people are still listening to music as much as ever. The era of setting up a big stereo system and sitting down for a couple of hours to listen to music may be over, but, music is still there in the background on the laptop or going on while people are busy doing something else.

The one thing that may never come back is there were 20 million music buyers that left the CD format and never went to digital formats. These buyers may never come back.  People are not disengaged from music but the value of music, the importance of the purchase that supports the career of the Artist and the business itself is getting lost in the shuffle.

One of the issues that was never discussed at either the Americana Music Conference or Digital Summit was the competition for the entertainment dollar that began in the 80’s and kept up a relentless pace through the 90’s until now. Back in the 70’s or before there was virtually no competition for the music dollar. Sports were played with minimal equipment and there was not the ability to purchase films or video games to compete with the music dollar.

The purchase of music was part of an adolescent rite of passage. The ability to purchase tape recorded movies first on VHS then on DVD took an ever increasing chunk of discretionary income away from the purchase of music. Then came the advent of video game technology. The purchase of different gaming formats as well as the games took an even larger chunk of entertainment dollars in the average household especially for teens.

So who are buying CD’s?  The overwhelming percentage is female. The biggest age group segment is age 36 – 50 (how many new bands are aiming for this buyer?) with 51 and over being the second largest group. The imusic purchases are not even close to making up for losses in CD sales. There has been a recent nitch market in vinyl sales, but that is an “uber” fan type purchase.  Lately, they have been developing the “uber” fan market by exploiting the serious music buyers with special multi-disc releases, vinyl and other promotional product. These are buyers that will buy no matter what. Many times they are musicians, essentially preaching to the choir.

The biggest problem is getting the average music listener to make a purchase. There are a few ideas coming down the road, subscription services, “connectivity” the wave of the future with devices such as Blue Ray players that are connected to the internet that make it possible to download movies will make it possible to download music. In the end the IPod may end up being a stop gap nitch market itself.

Next we will look at what bands are doing to raise funds, develop awareness and release music.

– Brad Hardisty, Nashville, TN