Quantcast
HITS Daily Double
“The customer has spoken. We are now going to…find out who is really viable and who is just being propped up by a bunch of cash.”
——Eric Garland

NARM DISPATCH #3:
DOG DAY AFTERNOON

Mark Pearson Takes Notes (and a Quick Nap) While Sitting Through a Nielsen SoundScan Update and the Behind the Numbers Panel
The Nielsen SoundScan Research Update at this year’s NARM confab revealed to a full house that the consumption of music is at an all-time high, and that there are more ways than ever to consume it.

Digital continues its ascent, now accounting for some 40% of the market. Host Chris Muratore took some of the sting out of the dismal numbers, using the track-equivalent equation of 10 track sales to count as one full-length to bring the decrease in year-over-year sales from 14% down to only 9%. Don’t you just feel better already?

No surprise when he broke the news that we are back to 1995 sales levels. Not unexpectedly, there was a bit of good news on the track-sales front, with that category being up another 27% last year.

On another upbeat note, Muratore also talked about the explosion of vinyl. Although it still accounts for less than 1% of the market, vinyl has increased 55% so far in 2009, from 1.3 million last year to a projected 3 million this year. And though three out of four of those sales came from the indie retail sector, the major retail chains are starting to make inroads. Top vinyl seller for this year is still Radiohead with 25k, having done 60k in ’08.

Country continues to lag in the digital sector, with only 6% of the category being sold digitally. New configurations also face major hurdles, as neither digital album cards nor slot music have gained much traction in the marketplace.

Here’s a surprise: TV is good for sales, with an appearance on the Grammys and the CMAs being great, while performing on American Idol or the Disney Channel is even better. Who knew? We continue to release a whole lot of records, especially now in the digital-only format. Of the 105k releases last year, fully half were not available in physical form.

Next up was the Behind the Numbers panel featuring moderator Gwen Lipskey of SoundThinking (NY) and panelists Mark Donovan of comScore, Eric Garland of Big Champagne, Susan Kevorkian of IDC, Misty Lynch of SNL Kagan, Bruce Friend of OTX and Michael McGuire of Garner Research. For all the talk over the last few years about how mobile technology is the provider of the future (and most of the panelists still believe that to be true) the current numbers as laid out by Friend had mobile pretty much taking last place currently behind radio, computers, TV (including ads) and videogames for the average consumer of music. Of the two hours a day that most people listen to music, mobile accounts for just two minutes.

On the subject of discovering new music, McGuire said that word of mouth still reigns supreme. Whether online sharing or face to face, people are most likely to find music in that manner, with radio in second place. Kevorkian noted that the time between finding music and having the ability to buy is shrinking and needs to shrink more. But she still believes there is hope for slot music and its ability to lead people to online discoveries.

Donovan said that while the mobile experience was the fastest growing venue for music lovers, there are still too many problems with incompatible technologies.

Lynch noted that “ease of use” was of tantamount importance and lauded the industry for finally giving up on DRM. Garland echoed that sentiment, pointing out that everyone has finally recognized the power of the consumer. “The customer has spoken,” he said. “We are now going to find out what the possibilities are now that all of these obstacles have been removed. We’ll find out who is really viable and who is just being propped up by a bunch of cash.”

McGuire added that in his research concerning why people use peer-to-peer, he found that as much as “free” was a large part of the decision, another response was lack of choice or opportunity.

Kevorkian then noted that there were still many hurdles beyond DRM, and that the needed learning curve for devices still has to lessen.

Garland believes that even downloading is going to become passé and asked what the industry was going to do about the “terrifying” inevitability that consumers would begin trading entire terabytes of music collections instead of just songs. A cheery thought indeed.