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It Took a Couple Decades, But the Music Business Looks Like It's Okay Again (recode.net) 125

According to latest number from RIAA, music sales in the first half of the year were up 8.4 percent, to $3.4 billion -- the best performance the music industry has seen since its peak days back in the CD era. Recode adds: That boom is fueled entirely by the growth of paid subscription services. This year's numbers include Apple Music, which didn't exist a year ago but has 17 million worldwide subscribers today, as well as Spotify, which has been growing faster than Apple and has 40 million global subs. Digital downloads via stores like iTunes, meanwhile, are falling behind. Those sales dropped 17 percent to $1 billion. And some people still buy CDs, but soon that business will be a footnote: Those sales dropped 14 percent and now make up just 20 percent of U.S. sales. All good, right? Not according to Cary Sherman, who runs the RIAA, the labels' American trade group. He has a Medium post complaining that YouTube doesn't pay enough for all the music it streams, almost all of which is free.
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It Took a Couple Decades, But the Music Business Looks Like It's Okay Again

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  • That's too bad.... (Score:4, Insightful)

    by sbrown7792 ( 2027476 ) on Tuesday September 20, 2016 @01:44PM (#52925693)
    now they can't blame piracy for poor sales.
    • Re: (Score:3, Insightful)

      now they can't blame piracy for poor sales.

      They will anyway, the music industry cant never make "enough" profit

      • by dejitaru ( 4258167 ) on Tuesday September 20, 2016 @01:51PM (#52925747)
        Exactly, look at the MPAA, still complaining that piracy is hurting movie ticket sales, yet records are constantly being broken
        • Re: (Score:2, Insightful)

          by Anonymous Coward

          box office records are constantly being broken because inflation knows no bounds.

      • Exactly.

        The piracy line is complete bullshit. They *never* list piracy in their financial statements but yet they try to make claims about "losses."

        • The reason they can get away with it is because copyright law explicitly allows you to include imaginary sales in the damages calculation. FWIW.
          • by Anonymous Coward

            But not their taxes... which makes the imaginary sales damages even more bull.

            • Of course, you are completely right, and the law doesn't even pretend that they are real. But that is how congress made the law, and the xxAA would be foolish to not take advantage of it.
            • by AvitarX ( 172628 )

              Well, I bet they could include the imaginary sales as profit, then the piracy as loss.

              It'd kill their margins though.

            • by murdocj ( 543661 )

              So you want them to pay taxes on money they never received?

              Think of it this way: if someone stole a bunch of CDs from one of their warehouses, would you want them to pay tax on that like the CDs were sold??

              • So you want them to pay taxes on money they never received?

                Think of it this way: if someone stole a bunch of CDs from one of their warehouses, would you want them to pay tax on that like the CDs were sold??

                If they received compensation for said losses then fucking right they should pay the tax on that amount.

      • now they can't blame piracy for poor sales.

        They will anyway, the music industry cant never make "enough" profit

        Absolutely right. No matter how much money they make, it will never be enough. They will always claim they are making less than they should be making due to (a) Piracy (b) YouTube (c) Streaming services (d) Some other reason. It's always someone else's fault that they aren't making as much money as they think they should.

        • Absolutely right. No matter how much money they make, it will never be enough. They will always claim they are making less than they should be making due to (a) Piracy (b) YouTube (c) Streaming services (d) Some other reason. It's always someone else's fault that they aren't making as much money as they think they should.

          The Music And Film Industry Association of America (MAFIAA) won't be satisfied until they can make individuals pay each time they experience a music or film performance, even if it's just remembering a performance.

          • by Gr8Apes ( 679165 )

            until they can make individuals pay each time they experience a music or film performance

            That is the desire, and what they receive out of subscriptions. Personally, I want my own music, played how I want, when I want, without reporting back to someone what I was playing. It's none of their business if I like "Kookaburra" 10 times a day.

          • by ChoGGi ( 522069 )

            The Music And Film Industry Association of America (MAFIAA) won't be satisfied until they can make individuals pay an increasing amount each time they experience a music or film performance, even if it's just remembering a performance.

            Fixed that for you, can't forget about inflation eating into their profits.

        • by rtb61 ( 674572 )

          Insatiable psychopathic greed means they never have enough and always want more, no matter how much they already have. More profits, more young and desperate people to abuse, more public ego stroking and worship, the ability to consume more and more and more (more bigger mansions, more bigger yachts, more bigger private jets, no limits on the pollution they can generate ever, burn more and more and more).

    • by tomhath ( 637240 )

      Sure they can. Without piracy they might be collecting two or three times as much from streaming services. Who knows? Not you or me.

      My problem with the music industry is that most music being sold today is terrible. And get off my lawn.

      • A lot of the music in the charts is horrible. However, there's also loads of bands making great music right now. For every 10 crap songs I hear, there's also that one band that suddenly pops up with a great song. Twenty One Pilots recently.

        99% of everything is crap. But with hindsight we forget Rick Astley and... well, maybe not. But we overcame Wham. And Vanilla Ice. And the lambada.

  • by H3lldr0p ( 40304 ) on Tuesday September 20, 2016 @01:50PM (#52925729) Homepage

    Re: YouTube not paying enough.

    Pick one of the above. You can't have both, you can't pick both. You get to exert an outsized control over the medium which is going to cost much of that profit in the form of maintaining the outsized control. People are clever and will figure out ways around automated filters and counters for no other reason than because they can. It's a challenge to overcome. Countering that takes time, effort, and most importantly money.

    Or you can give up the outsized control and get the profit from the views on your "channel" or whatever self-organization YT comes up with next. That's the way it works. You can try making your own streaming platform, but I'm fairly certain we all know how that's going to work out. Complaining about it isn't going to change anything.

    The record labels, hell, the media business in general had all the warnings that their world was changing and they had best get along with it. But those in charge stuck their heads in the sand and ignored it. This is the result.

    • Complaining about it isn't going to change anything.

      Most likely complaining loudly enough will give them a bigger royalty payment.

      • From what I've read, there's no money to be squeezed from YT right now. The service started in the red and has generally stayed there. Complaining will only generate so much hot air.

        If these media companies want to see YT fail and go away that is going to be akin to cutting a leg off to spite their marathon time. Of course, these are the sorts of short-sighted people that they'd do that on the wish that everything would go back to the way it was before the internet got all the kids so uppity and wanting cul

        • From what I've read, there's no money to be squeezed from YT right now. The service started in the red and has generally stayed there. Complaining will only generate so much hot air.

          If these media companies want to see YT fail and go away that is going to be akin to cutting a leg off to spite their marathon time. Of course, these are the sorts of short-sighted people that they'd do that on the wish that everything would go back to the way it was before the internet got all the kids so uppity and wanting culture to become responsive to their needs and views and not those of the shareholders and market makers.

          The problem is if I upload a Taylor Swift video to youtube and it doesn't get taken down until it hits 2 million views, there's click and ad revenue that should've gone to Taylor but instead it goes to no one. That's why the RIAA is so mad. Youtube doesn't have the manpower to police this stuff correctly so it's a lose lose situation for everyone. What will happen is soon every new video will need approval to verify it doesn't break a copyright.

          • Unlikely to happen. I have had videos INSTANTLY pulled for having Eurobeat songs in them. Id say they do a pretty good job pulling licensed content usually seeing as Dave Rodgers is fairly obscure and still triggered it.
    • The music business will be dead again soon enough. They effectively have six (or so) customers now: Apple, Amazon, Google, Spotify and a handful of other companies. Half are Giants, and half don't make a profit. How long will the labels really be able to make a profit given the pressure that will naturally crush a commodity product?

      • The labels will be dead. Those 6 customers will be the music business and artists will sell directly to them. BMI and ASCAP aren't going anywhere, though, because they handle royalties for songs in movies and TV shows.


  • I was so worried about the poor RIAA.

    Profits are up? woohoo they've survived high speed tape cassette dubbing! -err I mean the latest copying technology/piracy.

    Safe in this newfound knowledge I can sleep well again.
  • by dhaen ( 892570 ) on Tuesday September 20, 2016 @01:58PM (#52925811)
    I still occasionally play vinyl that I purchased in the 60's onwards. It's amusing to see the paper sleeves printed "home taping is illegal and it's killing music".

    Things happen in cycles - there's no steady state - unfortunately the negative always makes better news than the positive. Glad this positive made some news channels, although I suspect the record industry would rather have kept it quiet - spread the doom and gloom.

    • by Yvan256 ( 722131 )

      One of the RIAA slaves group, I mean music band, even made a song about it [youtube.com].

  • The record industry clearly sees Youtube as a value advertising mechanism or they wouldn't be uploading every video they make to Youtube. As for the rest, they're essentially adding a new revenue stream by monetizing home video.
    • The record industry clearly sees Youtube as a value advertising mechanism or they wouldn't be uploading every video they make to Youtube.

      Remember when Viacom sued YouTube and then it was revealed that many of the videos Viacom was suing over were actually uploaded by . . . Viacom.

      Good times, good times.

    • The number of VEVO channels are in the Top 100 says everything

      http://socialblade.com/youtube... [socialblade.com]

    • The record industry clearly sees Youtube as a value advertising mechanism or they wouldn't be uploading every video they make to Youtube. As for the rest, they're essentially adding a new revenue stream by monetizing home video.

      You realize radio stations and tv need to license or receive approval to play music? It's not like they can just grab any album and play it over the radio.

      • by Luthair ( 847766 )
        I do, I also realize it is not the recording industry that grants the licenses nor does the recording artist doesn't profit from it only the songwriter. More importantly Youtube is the broadcast medium, not the broadcaster.
        • it is not the recording industry that grants the licenses

          ASCAP, BMI, and SESAC may not be the recording industry, but they are definitely part of the music industry. Songwriter profits from that indirectly, but the owner of the specific recording also gets a cut.

  • I bought an album from Bandcamp. That's as far as I go.
  • by crunchygranola ( 1954152 ) on Tuesday September 20, 2016 @02:14PM (#52925943)

    About is profits, and about the latest music distribution technology - this goes back to the days when the music industry made money by selling sheet music, and faced the threat of wax cylinders, player piano rolls, then radio play, etc.

    Back in the 1990s, when profits were at a (then) all time high, due to people replacing their LP and cassette collections with CDs, the industry was complaining about piracy and got a tax on blank CDs imposed, a straight up subsidy for a highly profitable industry based on zero evidence.

    There has never been a new music distribution technology that was not claimed to be a threat to the industry's profits. Another eternal verity - every profit peak is taken to be the "natural" profit level that only despicable piracy could be responsible for eroding.

    Actually it is worse than that. The growth rate ramping up to the peak is claimed to be the "natural" state of the industry and year-after-year perpetual profit growth is "normal" and any reduction is due to those nefarious pirates. (And now direct music sales! The horror! Musicians selling music direct to fans! This must not be allowed to grow!)

    But an industry whose revenue is due entirely to controlling access to the creativity of other people is like that.

    • For those of us who were kids in the 1970s and 1980s, the brouhaha about piracy over the Internet was act 2. We got to experience act 1 when the recording industry went after cassette tapes as facilitating piracy because they enabled you to record songs off the radio, or make your own mix tapes which you could then hand out to friends. My sister's stereo specifically had the ability to record radio broadcasts to tape disabled because of their nonsense.

      Their paranoia and lack of forward thinking killed
    • You know, if you didn't start the body of your post in the subject line, it would be easier to write grammatically.

  • by bluefoxlucid ( 723572 ) on Tuesday September 20, 2016 @02:25PM (#52926065) Homepage Journal

    Technology marches on. There was a time when expensive recording processes lead to expensive presses to create shellac, and then to the expensive process to record music onto cheaper-to-make tape. Without digital computers to handle all the engineering, engineers had to manually adjust the recording of a record, making the grooves wider or narrower to fit the sound being recorded as you moved toward the inner spiral; this all had to transfer to a master record, used to produce negatives which were then pressed to create records. Those eventually wore out (well, got damaged well before that), and you'd have to make more, until the original masters used to make stamping presses were no longer usable and had to be recreated.

    The same problem comes with tape: a copy of a copy loses fidelity, and the master tape eventually wears out from use, so you're using a copy of a copy of a copy (copy the master to the tape used for duplication, then duplicate from that), and the damn tapes take forever to record. The process was simpler, though, and digital mastering tapes are easily copied without error; thus you can have perfect back-ups of the master source, the final mix, and the tapes used in the duplicator to make the analog product.

    Digital electronics eventually brought CDs, which are digital, easy to duplicate perfectly, and easier to press than records and tapes. CDs are pressed into polycarbonate, then backed by aluminum foil, and lacquered to protect the foil layer. The material is cheaper and easier to handle than shellac or lacquer; recording is a pressing operation; and the masters are easier to reproduce than gramophone masters. This is a lot cheaper than tape.

    Now we have digital distribution, which costs near-nothing. Millions of dollars go into services which distribute millions of songs to millions of subscribers. Spotify has 20 million songs in its portfolio, 40 million *paying* users, over 100 million total users, and 1 billion streams per day. Spotify pays literally several million dollars for its infrastructure costs, and almost $2 billion for licensing fees. The physical cost is around a dollar per 10,000 songs streamed, or 1/100 of a cent per song.

    Tell me why they shouldn't ship more units for less revenue [thecurrent.org] when their costs are now damn near nothing. The cost of music production isn't that much lower; but a $2 CD with 10 songs is still 2,000 times as expensive per song as digital distribution. It's so much more expensive that we don't even just download the damned things once; we REPEATEDLY RE-BUY THE SAME SONG BY STREAMING IT OVER AND OVER AGAIN, because the cost of distributing a song is one one-hundredth of a cent and we have to buy it a hundred times to spend a penny. The fair cost, considering production cost, may be 5 cents or it may be a dollar per song; and almost 100% of that is production cost, while distribution costs nothing.

    Distribution used to carry a hefty cost. Now any moron with a $50 microphone and a laptop can record, master, and distribute his own music. If you're using digital production (Modplug Tracker), you don't even need special equipment like instruments. Why should the music industry represent the same revenue per unit shipped as it has in the past? If it did that, it would represent literally dozens of times the profit.

    • Why shouldn't it get smaller

      Netflix should be your answer. Smaller markets, but more of them to fill every niche.

      When the recording artist ditches the label, do you really care what replication costs are for the music? The real cost is how long it takes to sit down and write/record/mix/master it. And that's not a short amount of time. The risk has to be worth it vs. the potential reward, since you can't work your day job and be a full time artist. On the other hand, when the label takes a huge percentage, you shouldn't be surpris

    • Distribution used to carry a hefty cost. Now any moron with a $50 microphone and a laptop can record, master, and distribute his own music. If you're using digital production (Modplug Tracker), you don't even need special equipment like instruments. Why should the music industry represent the same revenue per unit shipped as it has in the past? If it did that, it would represent literally dozens of times the profit.

      You try that, as a musician (even if you get 100%) you would be extremely lucky to get you $50 back.
      I costs are LOT more than that to make any music and you don't get paid a cent when writing, producing and mastering.

      • On one hand, Danny Baranowsky now has several instruments, keyboards, and software synthesizers, representing thousands of dollars of gear and software he collected over several years. His musical career has grown since his early video game remixes done on old hardware and lots of cheap software.

        On the other hand, the engine for Deus Ex (2000) sources all its music from .xm files. Not rendered MP3 or Vorbis CD-quality production media; instrument samples and instructions to play them. That means you c

    • by houghi ( 78078 )

      Why should the music industry represent the same revenue per unit shipped as it has in the past? If it did that, it would represent literally dozens of times the profit.

      Just FYI: A rhetorical question does not need an answer.

      • That was an observation, not an answer. Per-unit profit doesn't need to increase; typically the number of units shipped increases, stabilizing the market and ensuring long-term profit increases.

  • FTFY (Score:5, Insightful)

    by QuietLagoon ( 813062 ) on Tuesday September 20, 2016 @02:31PM (#52926115)
    After a decade or so of blaming piracy for its own internal lack of vision, the music industry is finally looking good again since it finally embraced technology to give its customers what they want.
  • I thought Cary Sherman passed on to his eternal reward a few years ago. Maybe it was just wishful thinking.
  • I was so worried about the people in between me and the music I like, earning their 98%.

  • I could be wrong, but observation shows me that there are two things at play simultaneously:

    1. The majority of the profit comes from younger individuals who [want|need] NOW. They don't tend to think of ways to hack around the bad system that makes them pay for something they shouldn't have to pay for, so their demand and "I [want|need] it NOW" mentality drives them toward the thing that gets them what they want with a payment (slews of different ways to download music and pay). Google makes it easy, Apple

    • by GuB-42 ( 2483988 )

      1. The majority of the profit comes from younger individuals who [want|need] NOW. They don't tend to think of ways to hack around the bad system that makes them pay for something they shouldn't have to pay for, so their demand and "I [want|need] it NOW" mentality drives them toward the thing that gets them what they want with a payment (slews of different ways to download music and pay).

      I guess that by younger, you mean any age before retirement.
      Because yeah, active people have busy lives, and they don't want to keep track of things if they don't have to, they want convenience and are ready to pay for it, that's totally normal.
      And after so many years, the music industry finally realized the obvious. If you want to make people pay you have to offer people better service than pirates, and it means convenience.

      • Agree with you completely! What I meant was the young age of old enough to use a music playing device you can purchase through until about mid-late 20s where you start to appreciate your music you've listened to until that point. Certain groups excluded, the demand for buying music released yesterday drops significantly.

  • ...even better if they included Google Play Music numbers. A lot of my friends subscribe to the Google Play Music Family plans which gives unlimited music to the subscriber and 4 family members. The problem that has been pointed out by other posters is that many people are not purchasing music anymore they are just leasing it from one of the four or five streaming services. The music industry is effectively being held up by a crutch that is "Unlimited Music Streaming" and it isn't going to get better since
  • Wait a second... So if you allow people to conveniently buy music in a format they'll actually use, they'll buy it? That's insane! Who could have thought that would happen?

  • >> It Took a Couple Decades, But the Music Business Looks Like It's Okay Again

    Oh thank goodness, it was a close call for a moment for all those parasite middle-men. NOT. Unfortunately.

  • Has the Record Industry wised up and stopped suing their customers yet? If so, I might start buying music again.

  • Now, we can all slap ourselves on the back for helping the big guys successfully regain control and define the music business model. Now the old labels that took advantage of their musicians and have now turned into the streaming services who take advantage of their musicians. Exposure relies on their algorithms, their accounting is always in *their* books, nobody ever seems to "own" or even know where their music is anymore, and the still musician always seems to end up with the smallest share of it all at

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