The Official RIAA 2015 Statistics Are Out

The RIAA has released its statistics for 2015 and, as always, there are some surprises. The things to remember about the RIAA is that it works for the record labels (especially the majors), so some stats you have to take with a grain of salt. Here are some of the more noteworthy data points.

• There was a very slight increase in the recorded music part of the business, with revenues of just over $7 billion, for an increase of 0.09%

• Streaming accounted for more revenue than any other income stream for the first time, accounting for 34.4% of income, while download sales made up 34%, physical sales were 28.8%, and synch were 2.9% of total revenue.

• Paid subscription revenue increased 52.3% to $1.22 billion, compared to $800.1 million in 2014, while ad-supported streaming revenue increased 30.6 percent to $385.1 million. All very good news!

• Revenue from CDs, vinyl and DVDs of albums and singles fell another 10.1 percent to $1.9 billion (although that was less than predicted). CDs fell to $1.521 billion from $1.83 billion the year before based on 123 million CDs that were sold last year, which was down from around 143 million in 2014. 

• Vinyl sales continued to soar, generating $423 million from 16.9 million album sales and roughly 500,000 singles, an increase of 31.8 percent.

Here's the catch - the RIAA's numbers reflect retail sales, which means that the above numbers don't reflect how much the labels actually received for their music, although wholesale prices are from 65 to 70%.

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SoundExchange Introduces A New Song Code Search Tool

You'd think that with so much music existing in the digital domain that it would easy to track down the usage and royalties for a song, but unfortunately that's still not the case. Despite calls for the recording industry, there's no one single search engine that can find that data, but SoundExchange recently came up with a step in the right direction.

SoundExchange now offers an online tool for looking up the ISRCs, or International Standard Recording Codes, that are related to the nearly 20 million recordings in its database.

ISRC codes have long been the standard method for identifying sound recordings, first being introduced in 1986. Each code number is comprised of a two-letter country code, a three-character code for the registrant, two numbers for the year, and five numbers assigned by the registrant. The RIAA oversees the ISRC system in the United States and its territories. The IFPI oversees ISRCs globally.

SoundExchange's search engine allows you to look up an ISRC code by artist name, song title, album, year, version and UPC/EAN. The result can be added to a cart for future reference, which can then be exported to a CSV file so the data can be inputted to a digital service's system. The IFPI also provides a lookup tool it created in conjunction with SoundExchange with identical information.

SoundExchange collects royalties for non-interactive streaming platforms like Pandora and satellite radio only.

As said before, this isn't the ultimate solution that everyone has been wanting, but it's the best solution so far in that it provides cross-check information to make sure that copyright owners are being paid at least in some areas.

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MP3Skull Owes The RIAA $22 Million

When it thinks that there's copyright infringement going against its major label clients, the RIAA shows no qualms about slapping a lawsuit on the service, and it usually wins.

That was the case recently when the association won $22.2 million in damages from the filesharing site MP3Skull, a site that supplies download links to songs by popular artists.

The damages were determined by multiplying the 148 songs submitted as evidence by $150k each.

In this case though, the RIAA might not collect a dime since the identities of the owners is totally unknown.

MP3Skull now operates from the MP3Skull.yoga domain, and it has moved from .com and .to domains when they have been blocked via previous court orders in the UK.

Although the ruling allows the RIAA to size the domain, it can't get at the assets if it doesn't know where they are and who they belong to.

Here's the thing though - with streaming just about everywhere these days where a user can listen to any song at any time, why would anyone be bothered with downloading a pirated song?

The lawsuit may end being a moot point, but at least it shows that the RIAA is doing something to warrant the big bag of money that its clients put into it.

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1500 Track Streams Now Equals 1 Album Sale

The RIAA announced that it will now count 1500 track streams as 1 album sale when it comes to qualifying for awards like gold records.

This means that 150 streams now equals 1 track sale, thus 10 track sales (1,500 streams) then equals 1 album sale.

It's nice that there's some metric, but there's a big flaw in this logic.

1500 plays of the same song now equals 1 album sale, which is hardly the same thing as a true album sale.

When you buy an album you pay for 10 songs, and although you may not listen to them all as much as the ones you like, you did pay for them all and are exposed to them all.

That's far from the case with the 1500 = 1 logic.

Another thing is that until the announcement on Monday, 100 streams was considered 1 sale, so the bar for a sale has been raised (probably rightfully so).

It's great that the RIAA has announced this metric to reward performance, and although it doesn't seem to be as fair as real sale once was, I can't think of (nor have I read) a better idea of how to measure this.

Ideas anyone?

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Gigmor's David Baird On My Latest Inner Circle Podcast

David Baird of Gigmor

If you ever wanted to replace a player in a band or find a band to join, you know how difficult the process can be. Finding players of the same interests and proficiency levels really complicate things.

David Baird had the same problem when he moved to Los Angles (just about the last place you'd think that would happen), so the savvy technologist built a new platform called Gigmor that allows not only players to connect with each other, but bands and artists with venues as well.

On this week's podcast David will tell us how Gigmor got started and how to get the most from this innovative website.

In the intro, I'll talk about the implications of Pandora buying some of the assets of the Rdio streaming service, and the hi-res music logo that the RIAA just introduced that seems to cause more confusion than it solves.

Remember that you can find the podcast at BobbyOInnerCircle.com, or either on iTunes, Stitcher and now on Mixcloud and Google Play.

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The RIAA Introduces A Hi-Res Music Logo And Some Confusion To Go With It

While the number of streaming sites that feature hi-res audio is still limited (Tidal and Deezer come to mind), there are plenty of download sites that will happily sell you some very hi-res files for a premium price.

That said, it looks like the RIAA (the major label's lobbying organization) is trying to get serious about hi-res music with the introduction of an official hi-res logo (seen on the left). It's asking distributors to display the logo so music consumers will have no confusion over what kind of fidelity to expect, but it may end causing more confusion than it alleviates.

Interestingly, the RIAA defines high resolution music as "lossless audio capable of reproducing the spectrum of sound from recordings which have been mastered from better than CD quality (48kHz/20bit or higher) music sources which represent what the artists, producers, and engineer's originally intended."

Take notice the 48kHz/20 bit (it's not a misprint). This is a significant difference from what many online services (including Apple's Mastered For iTunes program) call "hi-res," which is 44.1kHz/24 bit.

There's virtually no recording done at 20 bit these days and that's been the case for about 10 years, so why not just make the standard 24 bit, which is what virtually everyone records at anyway? Also, why not just go and make 96kHz the true lower limit of hi-res, like in the real world?

This new logo and definition is bound to cause some confusion in the marketplace where there was little before. This just goes to show how behind the times the powers that be actually are.

According to the press release, "Retailers who have adopted the Hi-Res MUSIC logo include Acoustic Sounds Super HiRez, Blue Coast Music, HDtracks, IsoMike Recordings, ClassicsOnline HD*LL , PonoMusic, and ProStudioMasters. In addition to these digital music retailers, the logo also features on advertising and promotional materials of both independent and major record labels."

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Aurous: The Streaming Service The Music Industry Fears

The music industry hated Grooveshark because it never paid for the music it streamed, and it was finally able to shut it down earlier in the year. Now a new service called Aurous has appeared, immediately drawing the wrath of the RIAA in the form of a lawsuit.

Grooveshark worked as a shell on top of Google, which basically searched the web to find the songs (most of them illegally uploaded) you wanted to hear. Aurous works the same way, but instead uses the Torrents to find illegally uploaded song files. It's similar to Popcorn Time, which does the same thing for movies and television shows and currently has those industries scrambling.

Aurous has in interface that's very similar to Spotify, and features ad-free streaming, which also means that the copyright holder, the artists and songwriters aren't getting paid. The service debuted an alpha version last week.

The music industry was quick to react, showing just how much the site is feared.

On Monday, the RIAA on behalf of UMG, Sony Music, Warner Music, Atlantic and Capitol Records, filed a lawsuit against Aurous and its creator Andrew Sampson for "willful and egregious copyright infringement."

The problem is that Aurous operates as a decentralized BitTorrent search engine, and the company can argue that it's not hosting any illegal content.

This will be an interesting legal battle that's only just beginning.

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Streaming Music Up, Everything Else Down According To The RIAA

The RIAA mid-year report is out and it's filled with good news and bad news. The good news is that digital revenues grew 6.3 percent to $2.32 billion as streaming revenues grew 23.2 percent to $1.03 billion.

That said, digital downloads dropped 9.4 percent, although digital album sales rose by a surprising 4.2 percent (this category had been declining rapidly).

As expected, physical sales declined 17.3 percent to $748 million, with CD sales dropping by 31.5 percent to $494.8 million.

The one bright spot in physical sales continues to be vinyl sales, which grew 51.3 percent to $226 million.

The major takeaway continues to be the growth of paid subscriptions from services like Spotify, as the category was up almost 25% over the same time last year. The RIAA estimates that there was a slight growth of subscribers, up to 8.1 million in the United States.

What this shows is that physical product (except for vinyl) is falling fast, and digital revenue is just barely keeping up.

Although more and more people are signing up for streaming, not enough are convinced that it's worth it to spend 10 bucks a month on yet.

Pricing seems to be a big issue here, but until the labels and publishers come to grips with this issue, we won't see the dramatic growth in streaming subscriptions that everyone has been expecting.

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At Least For Now The Album Makes A Comeback

The album has taken quite a beating for the last few years, as more and more music consumers gravitate to single songs instead. Last year's total album sales, which counts CD, digital and vinyl formats, dropped 11.2% from the previous year, according to the RIAA. Even digital albums weren't immune, dropping 9.4% as well.

The good news is that at least for one quarter, the album's decline has seen an abrupt turnaround, with digital albums up 2.8%, and overall sales down just 1.8% in quarter 1 of 2015, according to Nielsen Music.

Why the change? Many have pointed to Drake's digital-only album release, If You're Reading This It's Too Late, as a possible impetus for the album sales uptick.

Other's think that the increase can be partially attributed to vinyl's continued resurrection, with sales up yet another 52% over the first quarter of last year at 2.77 million units. The problem with that theory is that the format's impact on total album sales is still minor at less than 5% of sales. See more on Forbes.

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The Lowly CD Still A Big Part Of The Music Business

All of the music industry news for the last year or so has been directed at oncoming music streaming steamroller and the downfall of the music download, but what's interesting is that our good old physical CD still remains a huge part of the music business. The latest report from the Recording Industry Association of America (RIAA), the music industry's trade group, shows the 2014 sales of the bright and shiny disc at $1.85 billion, or about 27% of the total U.S. recorded music revenue.

There's no denying that CDs are on the way out, with unit sales falling another 16% in 2014 from the previous year. It's true that it's just a matter of time before the format goes the way of the vinyl record (although there's been a recent resurgence), the 8 track tape and the cassette. What's interesting is that the 144.1 million CDs officially reported as sold by the RIAA in 2014 doesn't represent the real total by a long shot.

The CD sales listed in the annual revenue statistics revolve around sales reported via Nielsen Soundscan, the retail system that registers the sale at the point of purchase by scanning the barcode.

While that's most likely the majority of CD sales sold at retailers and online giants like Amazon, it isn't all of them though. CDs sold by artists and bands at their gigs or on their websites aren't counted. Neither are CDs sold at worship events. And of course, bootleg CDs aren't in those totals either. In fact, there's a huge underground economy still based on the CD that just doesn't register on the RIAA's radar.

That said, the CD business is falling and when it finally hits the ground, it won't be able to get back up. In 2014, streaming revenue from services like Spotify and Pandora overtook CD sales for the first time, ringing up $1.87 billion in revenue. Read more on Forbes.

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2014 First Year Ever Without A Platinum Album

With all the albums that have come out this year it's pretty amazing that exactly zero have been certified platinum by the RIAA. Yes, you read that right - there have been no million selling albums this year yet!

What's worse, it doesn't look like there will be any by the end of the year either. The two closest are Beyonce's self-titled album and Lorde's Pure Heroine, but both aren't even reached the 800,000 mark yet and their sales have slowed in recent months.

Actually, there has been one million seller - the soundtrack to Frozen has sold over 3 million, but that's a soundtrack and not a popular artist.

Back when the business was at its peak, there might have been 20 to 30 million sellers by this time just about every year (both recent releases and catalog), but those days are long gone.

On the other hand, there have been 60 platinum songs so far this year, but even that's down about 20% from last year, as the music consumer moves to streaming instead of purchase.

Yes, we're definitely in a singles era where the song is vastly more important than the album, but we're also in a very important YouTube era where a song can get 100 million views yet sell less than 10,000 copies. And today, that's considered a bit hit.

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The Reality Of DIY Sales

The RIAA just released its Labels At Work: The Music Business In The Digital Age report that has some interesting stats that indirectly point a spotlight on DIY sales. Of course, this is from an industry trade group composed of the 3 major labels, so it's going to be slanted, so take this for what it's worth. That said, the stats are telling nonetheless.

First of all, the report states that the major labels spend 16% of their revenue on A&R, which in turn means they call themselves the "Venture Capitalists of Music." I'm not crazy about the term and what it implies, but when it comes to finding new music, it's certainly true in that it's their major investment.

Other interesting stats:

• 80% of albums released sell less than 100 copies.
• 94% of albums released sell less than 1,000 copies.
• Only 0.5% sold more than 10,000 (which is now considered a hit in some circles).
• Most record companies recovered their investments on only 1 out of every 5 or 6 new albums.

The reality is that most musicians are pretty good at making music, and terrible at marketing it. Remember that we're in the music "business" and you can't have one without the other.

If you're interested in learning what it takes to sell you music and get ahead in the music industry, consider enrolling in my Music Prosperity Breakthrough coaching course. It's a small investment for what you could receive in return.

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The Numbers Are In: Should The Music Industry Be Worried?

Billboard Magazine recently posted the Nielsen Soundscan year-end 2013 music sales numbers, and while they may not correspond exactly with the upcoming figures from the RIAA (Recording Industry Association of America) or IFPI (International Federation of the Phonograph Industry), I don’t think they’re far off the mark. I’m sure music execs everywhere are looking at the stats and wringing their hands, and in some ways, they should be, because it’s the first year since iTunes was introduced that digital music has suffered a decline.

In what should be a huge red flag for the industry, 2013 digital track sales fell 5.7% from 1.34 billion units to 1.26 billion. Soundscan hasn’t yet released their streaming numbers for the year, but it should be clear to everyone that streaming is the reason for the downturn. In fact, it’s been widely noted that the digital download sales decline has been offset by the rise in streaming income, which we should see quantified when the numbers are made available.

Perhaps a larger problem is that the album, the cash cow of the industry (although less so than ever), has seen its sales decline for yet another year. Album sales for 2014 dipped to 289.4 million units, an 8.4% reduction from the prior year, although digital album sales fell a nominal 0.1% to 117.6 units from the previous year’s 117.7 million.

We’re in the era of the single song sale, as albums mean less and less to today’s consumers. It’s a different time where the attention span is much shorter, multitasking abounds, and there are more media choices than ever, which is less than ideal conditions for a medium that requires a long time commitment. Albums won’t die, but hopefully they’ll be altered for the times, with fewer songs and less running time. That’s not going to bring the format back to prominence, but it might slow its decline. This is one time where quality trumps quantity for sure. Read more on Forbes.

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The Lie That Fuels The Music Industry’s Paranoia

We’ve heard it for a decade now. “We’re losing more than half of our music sales thanks to digital piracy,” says the music industrial complex. The problem is that the music industry has freaked itself out so continually over hyped-up numbers attributed to music piracy that it can’t tell the facts from the reality anymore. The truth of the matter is that while music piracy was a real live problem at one point in the past, today it’s just a distant memory.

Don’t believe me? Let me give you a couple of data points:

• A study released earlier this month by networking company Sandvine on Internet traffic trends found that peer to peer traffic is now below 10%, down from 31% five years ago and 60% eleven years ago. Less P2P traffic equals less piracy according to a report from Envisional.

• Meanwhile, a combination of Netflix and YouTube now account for more than 51% of all Internet traffic in North America. YouTube is now the go-to platform for consuming music for US teens according to Nielsen’s annual Music 360 report, with more than 64% of teens consuming their music that way.

Here’s the bottom line - people don’t pirate songs anymore because they don’t need to. They can get whatever they want for free online via YouTube or a streaming service like Spotify.

After all, what’s the point of clogging up your hard drive with songs that you rarely listen to when you can have access to literally millions more any time and any place you want, and a lot more conveniently too? And why try to steal a song from a Torrent when you’re not sure if what you’re downloading is the original song or if it’s encrypted, corrupted or spoofed? You can waste a lot of time just trying to find a usable song to listen to. Who needs that? Read more on Forbes.

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Three Reasons Why The CD Is Still Important

Everybody knows that the CD has died, replaced by a digital world where files and streams are the main methods of music delivery. The only problem with that statement is that the CD is not yet deceased by a long shot, and it’s still a real tool in the belt of artists and bands everywhere. Sure, it’s rapidly diminishing in importance, but important it still is. I know that most of you reading this don’t believe me, so let me give you three reasons as proof. 

Reason #1: Last year there were 211 million CDs sold in the United States, according to the Recording Industry Association of America. While this number is down 78% from the format’s peak in 2000, it still amounted to around $2.5 billion in revenue, or about 35% of the income of the entire industry in the US. If you think that there’s weeping and gnashing of teeth in the business now (although it’s far more quiet than it’s been in the recent past), you’d hear some real wailing in record label boardrooms everywhere if the format were to disappear into the ether tomorrow.

Now 211 million of anything is a lot of units, but keep in mind that these are only the sales that the RIAA could count through their traditional distribution channels. This doesn’t account for all the CDs sold independently by artists at gigs, shows, church services, or online, and who knows how many other outlets.  And keep in mind that CDs are a high-margin item that makes not only more revenue per sale but more profit as well. An artist or band selling a few units per night might not seem like much, but this is occurring by the the thousands daily, which adds up to real money that’s not on the books anywhere and never will be. Read more on Forbes.

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Platinum After 46 Years

There's always been a big injustice in the UK when it comes to issuing gold and platinum record awards. For instance, the 5 original Beatles engineers never received either award for the huge selling records they worked on because no record released before 1973 was eligible. After that point in time, if a record reached silver (60,000), gold (100,000) or platinum (300,000) levels, the awards were only issued if it was requested by the record label, and in many cases they never were (like in the case of Apple Records and The Beatles).

That all changed last month when the BPI (Britain's version of our RIAA) decided to automatically grant these awards regardless if the label requests it or not.

That means that all those who worked on big selling albums from 1973 onward will finally be getting their just due. It's been a long time coming, and it's too late for many who deserve it, but it's finally great that all those who were essential to the big hits from that era that we still love so much will finally be recognized.

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Enter The Micro-License

One thing that music publishers aren't good at is making their songs available to anything less than major music business entities. If you're Paramount Pictures looking for a title song for a movie, you'll have no problem, but if you're an indie video maker trying to do the right thing and license a song for a video, you're out of luck. Not only are you probably stifled by the process, but you probably can't even easily find the song you want. Believe it or not, most publishers don't even have a publicly searchable index of their catalog.

The National Music Publishers Association and the RIAA are out to change that though, as they recently announced a move to institute "micro-licensing" platforms to make finding and licensing songs much easier. A micro-license is a new kind of business model that allows producers to use the Internet to find the songs they need and do the licensing deal online, without expensive attorneys or negotiations.

Right now most producers might just take a chance on using the music and waiting to see if a cease and desist letter pops up later, or on YouTube, a take-down notice. Let's face it, if it's for a wedding video, the chances of getting caught are pretty small, and if it's something distributed on YouTube, you have the option of either taking the video down or allowing commercials to be inserted in it if the copyright owner discovers you're using it illegally.

But if the process were streamlined, that's a great deal of fairly passive income that would flow into the hands of labels, artists, publishers and songwriters.

You have to look at this announcement in amazement and think, "What took them so long?" Of course, the truth is that for so long there was so much money in publishing that the revenue from micro-licensing seemed insignificant to most publishers. Those days are over though, as a new financial reality seeps into the business.

That can only be good for both artists and songwriters, who need all the revenue streams they can get these days, no matter how small. As we've seen from digital music distribution, it all adds up.

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RIAA Now Counting Streams For Awards

As we slowly see music turning into a streaming world, so apparently does the Recording Industry Association of America (RIAA), the industry organization that doles out the gold (500,000 sold) and platinum (1,000,000 sold) record awards.

Wanting to get ahead of the curve, the RIAA just announced that it will now also include streaming music in the count for their Digital Single Award certification. As a result, 56 songs have immediately earned awards, even a number of oldies from Aerosmith and Whitney Houston.

What's interesting is that the RIAA counts 100 streams as equivalent to 1 download, which means that you'd need 100 million streams to reach Platinum in a streaming-only world, a figure that seems fair as it's as difficult to attain as a million sales or downloads.

The organization is including streaming figures in its count from a number of apps, including Spotify, Rdio, MOG, Rhapsody, Xbox Music and Muve, as well as video sites like YouTube, Vevo, MTV.com, Yahoo Music and others.

There are so many artists getting massive streaming counts, and they should be recognized, as streaming influence is perhaps greater than any other sales parameter at the moment. It's another indication that the music business is evolving right before our eyes.

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Japan Gets Draconian On Piracy

If you're living in Japan and illegally download a file, you can now face up to 2 years in prison and a fine up to $25,000, thanks to a change in a law that was passed in 2010. But it's those who illegally upload a copyright infringing file that really have to worry, as the punishment is now a maximum of 10 years in prison and $125k fine. In theory, this punishment can be enforced over a single pirated file.

You can bet the music industry in countries around the world will be looking closely at how this law pans out. On one hand it seems incredibly harsh, and on the other, something so extreme might be the only way to stem the tide of illegal downloads, especially on the upload side.

If you listen to the Recording Industry Association of Japan (RIAJ), Japanese consumers illegally downloaded 4.36 billion music files illegally in 2010, while legally buying 440 million. The sounds suspiciously like the 10 to 1 ratio that the US RIAA has been using for some time (although sometimes they resort to an even higher 20 to 1 ratio). And as we all know, the RIAA's strategy of suing their own customers was a total failure as it didn't work and only resorted in very bad publicity for the industry.

But that was a civil matter, and while it carried some significant financial pain, there was no risk of going to jail. By changing this to a criminal matter, there is a different mindset involved as long as consumers are aware of the risk.

The question will be how the Japanese population will respond once its first 15 year old is sent to jail.

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Is The RIAA Dying?

For much of the last 10 years, the Recording Industry Association of America (RIAA) has been a symbol of what's wrong with the music business. Traditionally the major record label's lobbying group, it also serves the purpose of declaring gold (500k units), platinum (1 million) and diamond (10 million) awards to the biggest selling records, but when it became the anti-piracy arm of the labels, most musicians and consumers agree it went too far. Suing your customers never bodes well for an industry and that's just what they did, raising a great deal of animosity towards the recording industry and never making a dent in piracy despite the huge amounts of money spent in the courts.

Now it looks like the record label's contraction is finally taking its toll on the RIAA, as their revenue has dropped by 45% over the past two years, from $51.35 million to $29.1 million. Why? There are fewer labels to contribute to their coffers for one thing, but also the fact that the remaining labels are making less money means that they pay less, since that's how the membership dues are determined.

As a result, you'll notice that the association has quietly called a halt to lawsuits against individual file sharers. It's just too expensive, since the reason why the file sharers are doing it in the first place is they don't have any money. Even if they win, they lose since you can't get blood from a stone. Going after Pirate Bay and Megaupload is a lot more efficient, although I think the reason why piracy is falling has to do more with the natural progression of subscription and free streaming models like Spotify and Pandora than anything the RIAA ever did.

What the RIAA is still doing to lobbying politicians to support its legislative agenda, with reports that they've spent as much as $90 million dollars over the last decade (should that have gone to artists instead?). Most recently, the association has been hitting congress and the courts hard trying to make it the ISP's responsibility to either block any file sharer or turn over their names for prosecution. Don't expect that to happen any time soon, thankfully.

The point is, with its cashflow down and threatening to decrease every year from now on, could the days of the RIAA be numbered?

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

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