BLOG

Adele makes her triumphant return to the world stage. It what can only be described as a monumental moment in the disarray that the music industry has been in. Which is clearly embodied in the fact that Adele’s newest song “Hello” released October 23rd, 2015 has gone on to break several records in its short life span thus far;  from shattering the highest views within a 24-hour time span for a music video. Achieving over 27.7 million views, a title previously held by Taylor Swift’s “Bad Blood” which had a view count of 20.1 million views in a 24-hour time span. Additionally it broke the record for the shortest time to reach 100 million views on Vevo, which was previously held by Miley Cyrus “Wrecking Ball”.

Over 5.3 million digital streams on Spotify in 1 day. It has also broken the record for the biggest first week digital single sales. Selling an astonishing 1,110,000 million copies in its first week! That is beyond huge, considering the fact that the previous first week title holder was artist Flo-Rida with “Right Round” with  636,000 in sales back in 2009. Quite frankly digital singles haven’t been selling what they once did. What once was an ever increasing compensation for lack of physical album sales, has stalled out as well. Adele’s “25” album to stream music or not to stream? Everyone is wondering, and with two weeks left to release, with its November 20th release date approaching. The debate over streaming music, royalty payments and the transition over to the digital space continues.

In 2014 only 257 million albums were sold, which included CD, vinyl or digital formats. Which is an 11% drop from the previous years sales of 289 million “Total albums sold”.  With the physical CD facing much of that brunt head on, CD format sales dropped 14%.

As a recent article by The Atlantic stated:

“The recorded music industry is being eaten, not by one simple digital revolution, but rather by revolutions inside of revolutions, mouths inside of mouths, Alien-style. Digitization and illegal downloads kicked it all off. MP3 players and iTunes liquified the album. That was enough to send recorded music’s profits cascading. But today the disruption is being disrupted: Digital track sales are falling at nearly the same rate as CD sales, as music fans are turning to streaming—on iTunes, SoundCloud, Spotify, Pandora, iHeartRadio, and music blogs. Now that music is superabundant, the business (beyond selling subscriptions to music sites) thrives only where scarcity can be manufactured—in concert halls, where there are only so many seats, or in advertising, where one song or band can anchor a branding campaign.”

Courtesy RIAA

 

But there has been recent light at the end of the tunnel, as the music industry transitions over to new monetization models. Recently for the first time, the music industry derived the same amount of revenues from digital channels 46% as physical format sales 46%.  Due to the global digital revenue increase of 6.9% in 2014. The remaining revenue streams are derived from performing rights at 6%, and from synchronization revenues at 2%.

But the fact that physical and digital are now equal is a major turning point for the industry. The number of paying subscribers to subscription services has really grown in the past few years, with consumers embracing the ease of use, the mobility, and the fact of having a huge catalog at your fingertips. Allowing you to play from a very diverse genre set depending on your mood, as opposed to only being able to play songs you’ve purchased. In 2014, digital subscribers rose to 41 million paying users, up from just 8 million in 2010.

Which helped fuel the revenue segment splits of, $6.9 billion dollars from digital sales and $6.9 billion dollars from physical sales.

 

 

Which brings also to the million dollar question. Will Adele stream the album “25” on music services such as Spotify, Apple Music, Youtube Red, etc……

Here is an artist that is huge on physical sales, evident by the fact that she was able to pull a feat that other major artist have not been able to in recent years. Having a huge first week digital single sale. So the question remains, do you stream the album on digital services, thus eating away into your profits on an artist that still see’s tremendous amount of movement in physical albums and digital single sales. Theres two weeks left until the release of “25” and no decision has been made wether to allow the album to stream on Day 1 of release.  Another factor to mention is that while digital sales have equaled sales of physical albums, streaming still represents a smaller portion of those digital sales. Since digital sales includes all digital mediums, not just streaming. In fact streaming pays some of the lowest rates in music the monthly average rate per play on Spotify is currently .00408 ……yes not .4 cents, but  .00408, which continues the music industry’s larger debate of completely embracing the streaming format.

Another crazy statistic when it comes to streaming is the fact that the top 1% of bands and solo artists now earn about 80% of all revenue from recorded music.  So while the digital music revolution has exposed us to more music than ever before, and the worlds musical library is readily available at your fingertips the truth is only the top superstars are actually making any real money.

Which brings us back, if your the music executives over at XL Recordings in conjunction with her management team. Adele’s “25” album to stream music or not to stream? What’s your move?