Above: A very angry Professor David Kirk Philp and his taller, older brother, right after the younger sibling was told his favorite record store had closed. 20 years ago.
Here’s what is on Professor David Kirk Philp’s mind at this moment.
Get Over It – 1999 Was 20 Years Ago
Times are good right now in music (from an industry, not an art, perspective). Sure, there are some challenges, like the low royalty payouts by companies like YouTube, but from a drone’s camera looking down, things are going well.
Take a look at the image below that describes last year’s recorded music industry:
We should be happy. 2018 was the 4th year of recorded music industry growth after 13 consecutive years of declines. And growth is good, especially when it’s from all over the world, not just one market. Read this blurb from Music Business Worldwide:
China, a new entrant to the global top 10 last year, is now the seventh largest market. South Korea – at number six – saw one of the highest rates of growth (17.9%) with Brazil – at number 10 following close behind (15.4%).
There is money being invested in music. If you read the trades, you see headlines each week about new startups receiving millions of dollars of investment capital. You see Apple and Spotify battling it out over who has the most subscribers. You read about record payouts by SoundExchange and large advances paid to new artists. Is it time to party?
According to THIS ARTICLE, it is not time to party. Instead, we should look back to the industry in 1999 and realize that, while things are good now, they were much better then. The truth is, that’s the truth, in a way.
Fact: In 1999, the recorded music industry generated $39.9 billion in revenue. I found that number HERE. Scroll to the bottom of page 7 and you’ll see.
Fact: In 2018, the number was $19.1 billion (see HERE for the source).
The difference between the two numbers is $20.8 billion. In other words, 2018 needed to double its sales, then add a little bit more, in order to match the numbers of 19 years before. That sucks.
1999 was a peak year for physical sales. People were still buying lots of CDs for very high prices. Just as stock markets and sports dynasties peak, maybe those peak years for the music industry were more of an unsustainable bubble than something we should have thought would last forever.
Regardless of how wonderful those days were, they’re gone. Like a bald man longing for his Bob Seger circa-1977 hair, you can’t bring back the past. You can learn from it (for example, note the lack of mullets on big rock star heads today), but you can’t re-live it and you can’t rely on it. (Forbes wrote THIS the other day, which was more optimistic of the current/future of the biz.)
We’re in a time in which the monetary value of a single song isn’t even the price of a $1.29 digital download. The value of a song is it’s subscription. The value of a song is the access to hearing it whenever and wherever we want. The value of a song is very high, until another song by someone else is released, which means you, as an artist, probably need to put your album concept away (because, really, who writes concept albums anymore?) and focus on releasing one song a month…forever. That’s where our forever is today.
We can’t complain. Well, we can complain, and people always will, but the complaints should just be used for venting or figuring out something better. I would argue, as a consumer, that streaming services are the best thing to ever happen to music.
When I was a kid, I didn’t have enough money to buy all of the music I wanted. It took a long time to build up my record, then CD, collection. I was able to cheat and record my brother’s albums on blank cassettes (pre-Napster piracy), but if I wanted a song or album really badly, I had to wait. And you know what can happen between my emotional want and the means to satisfy that emotion? It can fade away.
I can get distracted, and probably did. REM played Drew University in 1984. I was supposed to buy tickets for my friends (and me). I didn’t have the money at the moment. So I worked my gig at The Cheese Shop. Sold a lot of brie. By the time I had the money, I’d forgotten about REM and spent the money on a new cymbal for my drum set. (If it matters, that cymbal just broke in February.)
That’s the battle today. The entertainment world is battling with itself, offering so many options for the consumer’s moment in time. If I want a song in 2019, I go to Spotify and listen at that moment. Duke Badger, Vice President CRM & Fan Engagement Strategy for the Warner Music Group, said recently that, in his mind, his music artists are battling for share of time.
It’s all opportunity cost. I can do one thing now, not two things. If I have one dollar, I can spend it on one thing that costs a dollar or two things that cost fifty cents each. But I can’t buy all three. Same with music. If we have your attention at this moment, we have to hold it before you go to Netflix or Fortnight or somewhere else.
Look HERE. Disney announced Disney + this week, its Netflix competitor. Netflix stock dropped 4.5% the day of the announcement. That 4.5% is worth a lot of money. Netflix, one could argue, is in trouble. Which service will satisfy consumers the most? Unfortunately in video, you can’t get everything you want on one service, like with music. You have to pick and choose your service on the video side, which may ultimately hurt over all growth there as consumers decide to just pirate what they want.
What this is really becoming is a new version of cable television, just on the internet. Instead of one service provider giving us 1,000 channels, we’re going to have to choose multiple service providers giving us those 1,000 programs.
I would argue that the video industry is behind music for this reason. Recorded music is on the right path. Live music is still booming. Sony’s chief counsel Julie Swidler spoke at William Paterson University last week and talked about all of the tech jobs in music at Spotify, Apple, Amazon, and all of the related companies.
Music was a mess for years. It seems that it has learned lessons and righted the ship. Let’s not worry about how much it could have been if only CDs were still around. Physical product is niche product now. The business is streaming. Stop crying. Just deal with it. The sooner you can do that, the stronger it can get.
For full details about the Music & Entertainment Industries Program, including courses, the minor, and our MBA, click HERE.
For full details about the WPU Pop Music Studies Program, including courses and audition requirements, click HERE.
Professor David Philp is Assistant Professor Music & Entertainment Industries and Popular Music Studies at William Paterson University. He is the co-host of the only FREE advice college radio-based music & entertainment industry talk show in America, Music Biz 101 & More, which airs live most Wednesday nights and is available as a podcast HERE every night (days too). Your favorite professor is also co-author (with Dr. Steve Marcone) of Managing Your Band – 6th Edition. Reach him at PhilpD@wpunj.edu or find him on LinkedIn HERE. The WPU Music & Entertainment Industries program is ranked one of the best by Billboard Magazine. Don’t believe us? Click HERE for truth!