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The following is taken from the 1/27/12 Billboard.biz article

Optimistic About the Record Business? You’re Not Alone

January 27, 2012

By Glenn Peoples, Nashville

Optimistic About the Record Business? You’re Not Alone
— “I am optimistic,” Tom Silverman wrote in the email that included a link to his latest fact-filled blog post. “What do you think?”

Silverman, of Tommy Boy Entertainment and the New Music Seminar, is optimistic about the sate of the record business. I think he has good reason to be optimistic. In a post at the blog of his New Music Seminar, Silverman walks readers through a litany of stats from 2011 that give reason to feel good about the state of the record business: strong growth in digital album sales, surprisingly resilient CD sales, CD sales on the Internet and healthy vinyl LP sales.

Silverman points to a few encouraging trends in digital music, too. One trend is growing digital performance revenue. Revenue from these royalties aren’t just growing, they’re becoming quite large. As Silverman notes, SoundExchange collected $95 million more in 2011 than in 2010, and projects to collect well over $400 million in 2012. (Silverman is a board member of SoundExchange, the organization that collects and distributes digital performance royalties to rights owners and artists.)

Another positive digital trend is growth in subscription services. Spotify just passed three million subscribers worldwide. Rhapsody has more than 1 million and Cricket’s Muve Music has more than 500,000 just in the United States. Put simply, subscription services are helping bring excitement back to music.

Want a few more reasons to feel optimistic? Recorded music sales in early 2012 provide further — albeit slight — evidence of favorable trends. In the first three weeks of the year, album sales are up 3 percent, digital album sales are up 18 percent and track sales are up 7 percent, according to Nielsen SoundScan. OK, so these numbers cover only the first three weeks of the year. But trends seen later in the year tend to show up this early. If sales are holding up this well through three weeks, they could very well continue to hold up late in 2012.

CD sales are down nearly 7 percent in the first three weeks of the year. But if there is a silver lining in a 7-percent drop in CD sales it is that digital gains exceed the loss in physical sales. Through Jan. 22, digital album sales are up 1 million units and CD sales are down about 640,000 units compared to the same period a year ago. Including other physical formats, the net gain in album sales so far this year is 418,000 units.

Silverman believes the music business is going through a “resurrection.” It’s a fitting word. Something has to die in order to be resurrected. Although the record industry didn’t completely die in the 12 years from Napster to present day, many parts are completely gone (physical retailers), others have been transformed (distribution, marketing, ticketing) and still others have been born (digital distribution, social media).

These facts should give the annual MIDEM conference in Cannes, France an unusually upbeat vibe (unusual in that music industry conferences haven’t been too upbeat in recent years). There will undoubtedly be talk of the ongoing fight against piracy and the difficult state of brick-and-mortar retail. But the spotlight will likely be on subscription services, social media, sponsorships, mobile apps and other exciting areas. No longer is faith needed to be optimistic about the record business. All you have to do is look at the numbers.
(New Music Seminar)

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