Internet streaming won't save music – the record industry still relies on hits
Perhaps the most telling comment on the end-of-year music sales figures for 2013 – reporting a 0.5% decline on the previous year – came from Kim Bayley, director general of the Entertainment Retail Association (ERA): "Music's performance is primarily due to a weak release schedule … Retailers will be hoping that labels deliver bigger hits in 2014."
In other words, it doesn't matter that the internet has given loads more artists the opportunity to reach an audience – with a broader range of music – the survival of the record industry is as reliant on hits today as it's ever been, if not more. A closer look at the top 10 albums of 2013 in the UK illustrates this hit reliance – the top three albums are compilations: Now That's What I Call Music 84, 85 and 86.
Understandably, record label trade organisation, the BPI, puts a positive spin on the state of the music industry. Glass half full, depending on how you interpret the stats – and what you focus on.
Yes, British artists continue to do well, being responsible for half of the top 10 albums of 2013 – and eight of the top 10 albums in the Official Artist Albums Chart. But the number of copies they sell has gone down. While the number one album, Now That's What I Call Music 86, sold 1,159,595 copies, One Direction's Midnight Memories – the top artist album – sold only 714,825 copies (685,000 of them sold in the first six weeks). Compare this to 2012's biggest selling album, Emeli Sande's Our Version of Events, which sold almost twice that number of copies: 1.4m. The biggest selling album the year before that was Adele's 21, which sold 3.9m copies.
Then again, considering that the total number of albums sold in 2013 was down only 6.4%, we could draw the conclusion that those album sales were spread among more artists than last year, and the year before. Meanwhile, British artists didn't fare as well when it came to digital singles, for which the number of units sold was down 4.2%. Only Passenger's Let Her Go (4) and Naughty Boy's La La La (5) managed to reach the top 10 of 2013.
But is "delivering more hits" the only recipe for growth?
Remarkably, not a single artist in the top 10 singles chart of 2013 managed to reach the top 10 in the albums chart. Robin Thicke, Daft Punk and Avicii may have delivered the top three singles, but those singles were not enough to sell their albums to as big an audience. Not a single album in the top 10 was released by an independent label (the compilations were released by Sony/Universal Music) – the Official Artist Album Chart included Arctic Monkeys AM at number eight, released by indie label Domino.
Yes, music streaming grew by 33.7%, but, figures reveal, the volume of tracks streamed (as in how many times users streamed a song) grew by more than 100%, from 3.7bn in 2012 to 7.4bn in 2013. This means that the per-stream value has gone down. This may explain why Spotify has pointed out time and again during the year that it makes no sense looking at the per-stream rate when evaluating streaming. Meanwhile the Wall Street Journal reports that data it reviewed showed that one major record company makes more per year, on average, from paying customers of streaming services such as Spotify ($16) than it does from the average customer who buys downloads, CDs or both ($14). This data appears to only apply to the US, however.
Perhaps the most telling end-of-year chart is ERA's Entertainment's Greatest Hits 2013 (see chart below). It's all about the tried and tested, the safe bet – the sequels. The only entries in the top 20 that do not belong in this category are films: Les Mis, Django Unchained and Life of Pi.
Who will deliver the "sequels" in the music industry next year, to make those retailers happy? U2?
