TROUBADOURS, PIRATES AND THE DIGITAL POLICE:
Songwriting, publishing, production and distribution in Y2K
by Jerry Flattum
Part II - STATS:
Let’s look at some numbers and facts. That way, not everything I say will be conjecture. As you know, numbers don’t lie.
NOTE: For greater detail on industry figures see the International Federation of Phonograms Industry (IFPI) and the Recording Industry of America Association (RIAA) websites. Many other leading industry organizations provide their own statistics depending on the focus of the organization. For instance, stats on the number of copyrights by the Copyright Office or royalty figures from the American Society of Authors, Composers and Publishers (ASCAP) and Broadcast Music, Incorporated (BMI). Search around--these numbers are important to the industry, and they should be important to songwriters as well. Afterall, many of these organizations consist of songwriters.
Also, use your imagination when tossing these figures around in your mind. Whether global sales are up or down, or France is outselling Spain, or 10 year olds are outbuying 30 year olds, these trends might or might not have bearing on you the songwriter. But success is often attributed to following certain trends, not that you can’t carve out your own market. Clearly, pop music is increasingly becoming more global. That’s one trend. As trendsetters, Rap and Technopop are now established genres and continue to expand along with changes in country, R&B, rock and jazz. The cross-fertilization of diverse music genres is the biggest trend of all, and one that will explode in the new millennium. So instead of following a particular trend, you the songwriter might very well be the trendsetter yourself, carving out your own unique market and leading pop and world music down new pathways. Follower or leader: You decide.
The IFPI--a definitive source for global music market data-- reports world sales since 1991 has grown from US$27 billion to US$38.1 billion by mid-1998 (The IFPI tracks recorded music sales on a global, regional and country basis, with information provided on format splits, repertoire origin, pricing splits, national sales certification awards, CD hardware penetration, per capita sales and other economic data). Total unit sales were 4.2 billion: 2.2 billion CDs, 1.4 billion cassettes, 200 million vinyl LPs and 500 million singles. This represents growth of 2% in both volume and weighted value.
United States (North America)
North America represents one third of world sales. Figures from both IFPI and RIAA reveal the net number of all audio and video units that manufacturers shipped to U.S. markets grew from 470.7 million units at midyear 1997 to 502.5 million units in 1998. This represents an increase of 6.8%. Canada’s market experienced a growth of close to 10% with a substantial increase in singles sales over the last couple of years.
Direct and special markets, which include mail order operations and record clubs represent 18% of all shipments, and are revitalizing after a downturn in market share in prior years.
Close to 40% of the world’s growth generated from emerging markets.
Latin America, despite heavy pirating, is the fastest growing market overall. From Brazil to Mexico, Latin growth rates are strong with Argentina leading the way, thanks to an upsurge in that countries economy. However, such countries as Honduras and Nicaragua were devastated by hurricanes and it will be a while before these economies are healthy enough to make a contribution to global music sales. Still, figures indicate the Latin market enjoyed a growth rate double the overall industry rate in the first half of 1998.
Europe, represents another third of global sales. Almost all of Europe experienced growth in 1997 including Eastern Europe (Russia, Poland and Hungry). Apparently the UK suffered a slight fallback. But no one can ignore the tremendous contribution the land of the Beatles and the Stones has made to the pop music world. Maybe a lot of Brits were out of the country at the time the figures were tallied--not to worry. Germany is slightly up. Spain and the Netherlands are doing great with France doing even better.
Japan weighs in at 16% of world sales and accounts for the world’s largest singles market. Taiwan and India both experienced strong growth rates with an astounding increase in CD sales in China. The Asian economic crisis seriously hindered sales, especially in South Korea, Thailand and Indonesia.
Australia and New Zealand
Australia and New Zealand both experienced declines in music sales, but still remain a top world market.
The Middle East market represents only 1% of the global market, but has demonstrated steady growth from US$279 million at the start of the decade to US$454 million in 1997. Turkey experienced growth with Saudi Arabia, Israel and Lebanon markets taking a fall.
South Africa dominates the African market, but other African markets are expanding and demonstrating strong annual growth in sales of recorded product. Many areas of Africa suffer serious social, economic and political hardship. Needless to say, the history of pop music would be no history at all without Africa’s influence on music far outweighing its ability to contribute to the sales pool.
Total Sales Summary
North America represented 33.8% of all music sales in 1997, with Europe coming in a close second at 33.3%. Japan followed with 16.5%, then Latin America (6.8%) and Asia (5.5%). Other markets included Australia and its surrounding region (2.2%), the Middle East/Turkey (1.2%) and Africa (0.6%).
Counting the Stars
Determining the number of songs that exist today is a mathematician’s nightmare, akin to counting the stars in the sky. Yet, numerous organizations and companies are trying to do just that. The largest music collection in the United States is the Music Division of the Library of Congress. LOCIS is the Library of Congress’ on-line catalog, containing over 27 million titles including those for music. It is unknown how many of those titles are music titles.
The primary source of copyrighted information is the Copyright Office. An estimate of the number of PA forms filed with the Copyright Office is around 185,000 annually (this number may vary dramatically, depending on the source). PA forms include choreographic works, recordings, arrangements and published and unpublished lead sheets. Numerous songs have fallen into public domain. The number of songs on recordings is hard to tally since an album, cassette and CD generally contain a multiple number of individual songs not copyrighted individually.
Genres in the United States
Down from previous years, Rock continues to dominate the American market, representing 32.5% of all music product sold. Country music followed with a market share of 14.4%, then R&B (11.2%), Rap (10.1%), Pop (9.4%) and Gospel (4.5%). Classical and Jazz have also declined over the years, with each currently holding a market share of 2.8%.
Since the days of Gene Autry, country music has always been a rollercoaster ride and of up and downswings, but without fail, the train keeps rollin’. Rap is the fastest growing market with numerous top selling albums in 1997 through 1998. Rap, like its predecessor Rock, was dubbed a passing fad, and proves how unpredictable the evolution of pop music can be. Gospel has doubled its growth rate from 10 years ago. Although grabbing a small portion of the overall market, soundtrack recordings have also more than doubled since the late 80’s, thanks to an insurgence of Rap.
Young and old
In 1997, 25.7% of all recorded music was purchased by buyers under 20 years old. The 20-24 year olds accounted for 13.8%, while three age groups defined by industry demographics--25-29, 30-34, and 35-39--each represented approximately 11% of the market. The 40-44 crowd accounted for 8.8%, a decline from previous years. But suprisingly, the 45 and older segment experienced an increase from 1.4% to 16.5%.
Historically, it is generally assumed that the need for new music decreases with age and that pop music is a youth-driven market. It was assumed by the industry that as record buyers get older, music becomes less important in terms of identity and unity. But the recent increases in buying by older consumers suggests that music is no less important for aging baby-boomers than it is for the Spice Girl crowd, and record companies might do well to increase their marketing and advertising budgets directed towards middle-agers and above. The 45-plus crowd makes more money and despite heavy work schedules and families, manages to find plenty of time for leisure-time activity. Marketers should not assume middle age is not without changes in identity equal to the transition of adolescence to adulthood. Spiritual, emotional and intellectual development doesn’t stop at 18.
Females out-purchased males by 2.8%.
The Retail market Retail sales accounted for 83.7% of sales in 1997, up 2.3% from 1996. Record stores still sell the most product at 51.8% share, while other retail outlets (such as department stores, discount chains, electronic stores and even grocers) held a 31.9% share. Record clubs and mail orders dropped to 11.6% in 1997 from over 15% in 1994. However, midyear 1998 figures demonstrated a surging increase of 6% in shipments to non-retail outlets. Sales from Internet sites are expected to significantly increase into the millennium. CDNow and Amazon.com are pumping big bucks into Internet marketing and retail outlets like Tower Records are developing strong web presence.
Despite that overall shipments were down for 1997, shipments of CD singles showed close to a 10% increase in growth in the United States and overseas, and has experienced substantial growth over the last few years. Music video sales are also up, but remain at a low point compared to previous years. CDs are increasingly becoming the dominant format globally. Despite significant drops of vinyl LPs since the advent of CDs, vinyl disks are experienced a resurgence due to the demand by Rap DJs and various types of collectors. Cassette sales are steady, with increased growth in developing countries.
The retail industry endured a decline in sales due to various corporate downsizings and restructurings during 1996 and 1997. But according to the National Association of Recording Merchandisers (NARM), industry streamlining will result in greater overall efficiency with predicted strong increases in sales through 1999 and on.
Read on for Part III - INTERNET MUSIC AND COMMERCE
ASK A QUESTION & FIND OUT MORE ABOUT THE AUTHOR:
For a short bio, along with an intro to his columnist section, see : http://www.musesmuse.com/col-jerryflattum.html.