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CD Sales off 20%, Again

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Posted Mar 22, 2007 by Paul
Filed under: Commentary

Lots of talk all over the blogesphere about CD sales and their rapid decent into oblivion – off another 20%.

This is going to be a long post, so brace yourself to learn something.

“In a dramatic acceleration of the seven-year sales decline that has battered the music industry, compact-disc sales for the first three months of this year plunged 20% from a year earlier, the latest sign of the seismic shift in the way consumers acquire music.”

I like this quote:

“Jeff Rabhan, who manages artists and music producers including Jermaine Dupri, Kelis and Elliott Yamin, says CDs have become little more than advertisements for more-lucrative goods like concert tickets and T-shirts. “Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream,” says Mr. Rabhan. “It’s the vehicle that drives the tour, the merchandise, building the brand, and that’s it. There’s no money.””

It’s something that’s been discussed on another popular Technology blog, The Long Tail and it’s something many of us have been saying for a long time now. (I’ll write more about this at another time)

I had a friend who I’ve promoted on this site offered a Record Deal from one of the Major labels here in town. The deal called for all the publishing, and 7 albums. SEVEN ALBUMS! That’s a lifetime for any of you who know. Everything but the kitchen sink was recoupable (meaning it had to be paid back) and beyond that, they’d most likely never see even one album released as the release schedule in Nashville operates at about a 2 year lag… meaning if you got a deal today, you’d be praying that by 2009 your cd would be released. No need to remind everyone, a LOT can happen in two years. Most specifically, you would be dropped.

And besides, CD sales are in decline year after year – Does any of you think you’ll be able to pay your recoups to the label and make money? Everyone does.

But what is the real problems with sales? Where do they exist and what can be done? Here are 5 things off the top of my head.

Problem #1 (especially in Nashville):

Last year Columbia, the big powerhouse Label in Nashville spent probably $500,000 to record and market a female artist whose only claim to anything was she was a secretary for one of the big-wigs (no, I’m not talking about Julie Roberts. Though the story is the the same, you’ll see the difference in one second!). This girl had a decent look, an alright voice, and an exorbinate expense account that allowed the best producers and people in town. Unlike Julie (who for the dollars spent hasn’t fared much better), this girl sold 1,000 copies of her “major label hundreds of thousands of dollars” release. 1,000 copies! – she, along with 5 more artist on the label were dropped (hey! ONE of them sold 5,000! woo hoo!)

1,000 cd’s sold is like paying $500 for each customer to buy that album. Customer Cost of Acquisition is a hot topic on the internet, but when applied to the Industry, it’s exorbinate in itself. The idea is to lower the cost.

Why didn’t she make it to the general public? Lack of dollars spent? Hardly.

From what we know, the girl was a secretary, and someone did hear her singing once.

There was no story. No life lessons learned. No reason to pay attention to what she had to say because no one knew a thing about her. Gretchen Wilson? Yeah, we all know her story – her life wasn’t exactly a bed of roses – – and that gave us some reason to hear her! Gretchen is believable because she’s lived through the heartache and hardtimes!

In other words, where’s the compelling reason to support this person and their music?

Problem #2: Everyone knows the artist rarely if EVER see a dime of their album sales! Everyone knows the money goes stright into the hands of the label (RIAA) who can then turn around and use that money to sue people and lobby congress to pass terrible legislation and to bully small internet radio providers to pay exorbinate fees and force them to close while regular radio pays nothing of the sort.

In other words: people aren’t rejecting the music, or the artist, they’re rejecting the RIAA.

Problem #3: Radio.

As I mentioned in another post on Trace Adkins, the radio cycle for songs is SO LONG it’s hurting sales. No one in their right mind wants to wait 5 months after a song first charts for it to rise to #1. That’s 20+ weeks and generally it’s 30+ weeks before another single ships – just out of control! Take Carrie Underwood for example. She is the American Idol 2005 and she’s still not released a new cd. I realise her album is still in the top 10 – and I’m sure to some they’re looking at that and her songs still on radio and saying “this album still has legs!” – but at 7,000 or 14,000 copies a week, VERY WEAK legs is all! They’re trading 300,000 sales a week on a new album for the 7,000 or so they’re barely getting! And they’re HAPPY about it!

The long cycle is killing sales.
Problem #4: “Ageism” is killing sales.

God Bless these young hot bodied good looking little things making music today, but there’s a REAL problem here… these young-uns should be the FUTURE of Country music, not the PRESENT!

There are older, more talented artists who should have a shot first and I guarentee, more people would relate to them, and more people would support them by buying their music. I’m not knocking the Taylor Swift’s of the world, they are sweet, hardworking people – I’m saying they aren’t ready. They need to grow, experience, go through some life!

A new label in town has a MySpace account. They say they’re looking for new talent. New YOUNG talent – 18 to 25 years old. Meanwhile, 80% of their “top friends” are people like Toby Keith, Brooks & Dunn, and Tim McGraw. In other words, artists over 40!

Embryos singing country music is an oxymoron – people don’t buy it. It just shouldn’t be done.

Problem #5 – Prices are rediculous.

What could you do with a $500,000 budget? Could you record a great sounding album, shoot a video, hire a great publicist to promote you and still have about $450,000 left in the bank? Yeah, I thought so.

So where is all that money going? Recording cost alone are around $250,000 – many times much more. It’s been said the Dixie Chicks, prior to the last album, spent upwards of $600,000 just in recording cost!. I haven’t verified that, but it sounds about right, if not a little low.

Faith Hill has been said to have fully recorded over 40 songs for her latest album – at a cost of hundreds of thousands of dollars. Nothing wrong with that I assume, but whatever happened to picking the 10 to 12 songs you wanted to sing, and doing your album? Why record song after song after song? Market research?

Most producers in regular studios can do an album for around $25,000 and what you get is a product just as good if not better than what you hear all the time. Why is that?

For every artist like that mentioned in Problem #1, where cost go through the roof and there’s no return, it just hurts everyone – consumers too! Because CD prices are just rediculously high anymore. Fair price is around $10-12, right now they’re pushing $18 for a new release. Sorry! That’s just too much.

Thank those who engage in Problem #1-4 for this – as they will spend the artists money in all manner of ways and rarely get any bang for their buck – as a result, prices on CD’s keeps rising so that what you DO buy, will help even out their prepetual losses.

Lower the price’s of cd’s, and gee wiz, more people just might buy them. But in order to do that – they’ve got to lower their cost.

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