Top Selling Albums Of The 2000's

Here we are at the end of the decade and it's a good time to take a look at just who sold what during the transition from Music 2.5 to Music 3.0.

Believe it or not, The Beatles had the top-selling album of the 2000's with their greatest hits package "1." The album had sales of over 11,448,000 copies since its release in November 2000, according to Nielsen SoundScan’s decade-end sales numbers. The Fab Four sold a combined 30 million units during the decade.

But rapper Eminem was the 2000s’ top-selling artist with 32.2 million combined in sales, with two albums in the decade’s Top 10 - The Marshall Mathers LP selling 10,195,000 and Eminem Show right behind it at 9,789,000.

It used to be that a real bona fide hit was pretty much guaranteed to sell diamond (10 million sales), but only ‘NSync’s No Strings Attached (11,111,000) and Norah Jones’ Come Away With Me (10,523,000) managed to hit those numbers along with The Beatles and Eminem.

But what really showed the decline in CD sales was that only two albums released in the years between 2005 and 2009 managed to get in the Top 20 of the 2000s’ bestsellers - Nickelback’s All the Right Reasons and Carrie Underwood’s Some Hearts at 14 and 17 with sales under seven million.

Flo Rida’s Low was the 2000s biggest-selling digital single, while Coldplay’s Viva La Vida was the best-selling digital album.

Wonder what the numbers will look like at the end of the next decade?

Bestselling Albums of the Decade
1. The Beatles - 1 - 11,499,000
2. *NSYNC - No Strings Attached - 11,112,000
3. Norah Jones - Come Away With Me - 10,546,000
4. Eminem - The Marshall Mathers LP - 10,204,000
5. Eminem - The Eminem Show - 9,799,000
6. Usher - Confessions - 9,712,000
7. Linkin Park - Hybrid Theory - 9,663,000
8. Creed - Human Clay - 9,491,000
9. Britney Spears - Oops! ... I Did It Again - 9,185,000
10. Nelly - Country Grammar - 8,461,000

Bestselling Digital Singles of the Decade
1. Flo Rida feat. T-Pain - "Low" - 5,214,000
2. Lady Gaga feat. Colby O'Donis - "Just Dance" - 4,690,000
3. Jason Mraz - "I'm Yours" - 4,619,000
4. Timbaland feat. OneRepublic - "Apologize" - 4,439,000
5. The Black Eyed Peas - "Boom Boom Pow" - 4,349,000
6. Soulja Boy Tell'em - "Crank That" - 4,315,000
7. Lady Gaga - "Poker Face" - 4,200,000
8. Coldplay - "Viva la Vida" - 4,140,000
9. Taylor Swift - "Love Story" - 4,005,000
10. Katy Perry - "Hot N Cold" - 3,945,000

3 Pillars of Effective Social Networking

Here's a great post from the Networlding blog called The 3 Pillars of Effective Social Networking. It's not referring to digital social networking however, but to real physical social contact - as in one-on-one personal interaction.

This blog violates a number of digital social marketing principles though, as all I know is the author's name is Melissa, since there's no background about her anywhere that I could find. It seems that she assumes that you know who she is already, which can be a big mistake.

Good post though, about the 3 R's (recognition, referrals and revenue) and the 3 C's of making a referral:

"People love recognition, referrals, and revenue.

Make a referral, but hope you get back:

1. Credit (for the referral, especially when other people use your contact for their benefit, they should give you public credit for the introduction)
2. Contacts (that can help you and your business)
3. Compensation (If and when appropriate)"

Great advice that applies online or good old-fashioned person to person.

The Real Reason Why Apple Bought LaLa

By know everyone has heard that Apple has bought the semi-subscription service LaLa and there's a lot of industry speculation as to why. I'd like to give you my personal speculation, but first some background.

Everyone, and I mean EVERYONE, who knows anything about the digital music business has predicted for some time that digital downloads would give way to subscription at some point. The reason? Why pay $10 to download and own 10 songs when for the same amount (approximately) you can stream millions of songs any time and anywhere you want. While subscription service Rhapsody has set everyone up for subscriptions and Spotify threatens to gradually put it over the top (whenever it finally reaches the US), it's pretty much a given that the digital music world would change to subscription overnight if Apple suddenly offered it.

Although it seems that subscription isn't exactly in Apple's best interest since it takes in a lot of dough by selling downloads, iTune's profit margins are razor thin and the downloads from the store primarily act to promote sales of Apple's hardware. Would that profit margin be any better with subscription? Would it serve the same purpose promote iPods?

That's what makes LaLa such an interesting purchase. LaLa isn't exactly a subscription service and it's not exactly a download service - it's a hybrid. First of all, it's streaming from the "cloud" (that's a network that stores all the content online - see the picture at left), not a download, but it's the pricing that's interesting. The customer can listen to any song for free once, but has to purchase the right to listen to it again for 10 cents. You have the right to listen to that song forever and ever thereafter.

So for Apple, it's the best of both worlds. It's in the streaming business, it's still gets individual purchases (although at a reduced rate), and it'll have the infrastructure and brainpower to implement a true subscription service at a later date if needed. Sounds like a win to me.

10 Major Milestones In Modern Music Marketing

Bruce Houghton wrote a nice post on his ever entertaining Hypebot blog some time ago about the 10 major milestones in modern music marketing. It's hard to argue with any of these, and they all are certainly milestones in some way, shape or form. I've added my comments in italics afterwards where appropriate.

In no particular order:

1. Seth Godin writes "Permission Marketing" way back in 1999 pointing the way towards a new era of artist and fan relationships. I personally thought that his book "Tribes: We Need You To Lead Us" is more of the milestone, but Permission Marketing certainly ranks right up there.

2. CD Baby offers indie and d.i.y. artists a home to reach a wider audience on the net.

3. The Arctic Monkeys parlay internet pre-release buzz into the fastest selling debut album in UK history.

4. OK GO proves the power of YouTube with an ultra-low budget "treadmill" video "Here We Go Again."

5. TuneCore tears down the last barriers to distribution offering low flat fee no strings attached access to the worlds top digital stores.

6. Radiohead releases "In Rainbows" asking fans to pay want they want for the download.

7. Trent Reznor grosses $1.6 million in first week sales by offering fans options from $5 to a $300 limited edition package of his latest Nine Inch Nails release "Ghosts". Whether it's calculated or just an inherent feel for Internet marketing, Trent is the master and deserves to be on any top 10 list.

8. Jill Sobule asks fans for help recording her new album raises more than $80,000. Pretty good considering she was only looking for $75k and could've raised more had she not cut the offering off.

9. David Byrne & Brian Eno release a new collaboration via Topspin. While more evolutionary than revolutionary, this was one of the first well planned and executed releases that took full advantage of modern music marketing techniques with impressive results.

10. Amanda Palmer made $19,000 in 10 hours on Twitter proving the music marketing potantial of micro-blogging platform.

A Great Way To Raise Your Twitter Follow Numbers

Photographer Scott Bourne wants to increase the number of Twitter followers he has so he's come up with a pretty good idea. Scott is holding a contest to win a Canon 5D mk II and a Canon 7D SLR camera. All he wants you to do is follow him on Twitter, and send out a single tweet regarding the contest.

Scott is asking his contest entrants to tweet only once in order to observe Twitter etiquette and avoid spam, and he's very careful to spell that out on his entry page. He also careful to spell out any possible problems that might occur either because of the entrants location or ethics.

This contest is a very clever use of social media, but it's clearly only part of Scott's strategy. He first wants to raise his follower numbers, then he'll be able to market to those followers later. He might not even want to directly market to them, instead just informing them and keeping them close as fans (he'll undoubtedly get some because of the contest) and market to them through his web site or blog. Either way, the contest is a winner.

Can you do something like this to improve your social media presence?

The CD's Not Dead Yet

As much as you hear about the traditional music business being dead, I'd be careful about believing it yet. A new study by the measurement company Mint.com shows that the CD may not be as spry as it used to be, but it's still alive and more well than you might think.

The Mint chart on the left shows a number of items well worth noting:

1) The spending per transaction for CD's were way ahead of digital, which was expected, but by this much? FYE.com (a CD retailer that also owns the Sam Goody's brick and mortar chain) raked in $34 per transaction, CD Baby was $22, and the closest digital distributor was the subscription service Rhapsody. Surprisingly, iTunes brings up the rear with only $7 per transaction. That's deceiving though because it means at least 6 purchases per transaction (depending upon the price point), which is far ahead of the others.

2) iTunes transactions per month are climbing, and at a much higher rate than their digital music competitors, especially from January to July 2009. It seems that all that competition is hurting iTunes' competitors a lot more than iTunes.

3) CD sales are declining in relation to digital sales though, and that number is still accelerating. 34% of total music sales is in the digital domain, but that means that 64% are still CDs, so don't give up on the physical product just yet.

4) The reasons for the decline in CD sales are confirmed by a new study by Harvard Business School Associate Professor Anita Elberse (not seen on the Mint chart) which states the obvious:

"when consumers start buying music online, they switch from buying full albums to cherry-picking their favorite songs...each album no longer bought is "traded in" for one, perhaps two, individual songs"

"a drop of around one-third of the total weekly sales across the album and its associated songs is directly attributable to people switching to buy music online"

All of which means that when you only buy a song or two instead of a CD or two, total music sales income suffers. But we knew that already.

The Current Music Industry Seen Through A Single Royalty Statement

Here's another one out of the Lady GaGa digital royalty statement mold of last week. It's a great post from the band Too Much Joy regarding a royalty statement they received from Warner Records shown on the left.

The band owes Warner's in excess of $395,000 in order to recoup the costs of doing 3 records for the label in the early 90's. That's a large amount of money, but not the item that makes the post interesting.

The interesting part is the fact that the band received only $62.47 from digital earnings. Now you might think to yourself that this is perfectly reasonable, given the fact that the albums are more than 10 years old, except for a couple of things.

Tim Quirk, one of the members of Too Much Joy, is VP of Programming for the streaming digital music service Rhapsody, so he knows exactly how many plays they received and how much money was paid to Warners. The band also knows that they've received more than $12,000 from digital sales for their 4 indie albums, so why shouldn't their 3 major label releases earn more than $62.47 (this was their first accounting ever for digital sales)? And finally, there are no earnings from iTunes in their statement (the other pages are not posted, but they indicate in the post), the largest digital retailer of them all.

When Tim actually calls Warner's for an explanation, he get comments like "we have to take care of R.E.M and the Chili Peppers first," "$10,000 is nothing!" and "Too Much Joy never made us shit!" But yet Warner's owes the band a full accounting according to their contract (and every other), regardless of how upside down they are. After all, how do you know who owes who unless you get a full accounting?

With an attitude like that, it's no wonder why bands stay as far away from a label as they can in the new Music 3.0 world. Why bother? They once served a purpose in that you really needed them to bankroll your recording. You needed them to distribute your music and promote it too. There was no way you could do it by yourself.

Until now, that is, because the world has changed. You can make your own music for mere thousands of dollars instead of hundreds of thousands, and you can market, promote and sell your product just as well as any label can online (but not traditionally), and potentially make a lot more than $62.47 as well. At least you won't end up owing hundreds of thousands of dollars with no hope of every recouping.

Check out the full article on the Too Much Joy blog site for a good read with a lot more details than given here.

8 Of The Best Social Media Tools

Here are 8 of the best social media tools available for musicians. Actually these are from a post on Mashable specifically designed for entrepreneurs, but if musical artists aren't entrepreneurs than no one is (especially in the Music 3.0 era). The original post contained 10 apps, but 2 of them didn't apply to the needs of an artist.

8. Monitter is a service that monitors Twitter mentions in real-time in a multi-column interface reminiscent of TweetDeck. Measurement is an important part of M30, so any tool that provides some idea of how well a social media post connects is invaluable.

7. YouTube - it seems pretty obvious, but YouTube can be used for so much more than music videos like interviews, online press kits and virtual after-show parties, among many other things.

6. UserVoice can help track and manage the feedback of your users and customers.

5. MailChimp is an online email service that offers list management, tracking and analysis, and custom HTML templates for up to 500 subscribers and 3000 emails a month for free.

4. Get Satisfaction provides a forum where your fans can get answers to questions, solutions to problems, and submit feature and new product requests.

3. Twitter - it's more important than ever and this post on Mashable will give you links to best practices and tips for using Twitter.

2. Facebook - another one that everyone knows but not everyone takes best advantage of. Read the post on Mashable for helpful hints.

1. Basecamp is a great and cost-effective web-based tool for project management and collaboration that features to-do lists, milestones for important due-dates, file sharing, blog-style messaging, wiki-style writeboards, and time tracking. It's the perfect app for a busy band that has to juggle recording, rehearsals, tour dates, and social media management.

Justin Bieber and Tweet Fever

Who says Twitter doesn't reach your fans? Everyone found out how powerful Twitter really is a couple of Friday's ago as popular 15 year old pop star Justin Bieber's tween fans caused a near-riot at Long Island’s Roosevelt Field Mall while waiting in line for autographs. The Canadian singer was promoting his new album My World at the clothing store Justice.

So what does that have to do with Twitter?

Kids and their parents began lining up at 9 a.m. hoping to receive a yellow bracelet that would allow them to meet Bieber, but trouble started a couple of hours before the 4 o'clock event as the crowd got restless. The scene caused Bieber to tweet: "They are not allowing me to come into the mall. if you dont leave I and my fans will be arrested as the police just told us. The event at roosevelt mall is cancelled. please go home… I dont want anyone hurt."

But Jim Roppo, the IDJ label’s senior VP of sales, eventually was arrested after he allegedly sent out Internet messages to over 3,000 fans that Bieber was still signing autographs even after police dispersed the crowd.

In the wake of the incident, Island Records issued a statement: "Over 10,000 screaming fans showed up and the police and fire marshal concluded it was an unsafe environment and prohibited the event from taking place."

But Roppo spent the night in the cooler and could face charges that include reckless endangerment, criminal nuisance, obstruction of governmental administration and endangering the welfare of children because he didn't tweet that the appearance was cancelled.

Which all seems to point to the fact that Tweeting is a pretty good way to reach fans, but never leave crowd control in the hands of a salesman.

Top 10 Advantages Of Social Over Traditional Media

Here's a great post on the advantages of social over traditional media from Hubspot via marketing guru Simon Mainwaring.

Social media is the hub around which the Music 3.0 wheel turns, and the following provides some reason why.

As traditional and social media duke it out for the leadership role in commanding consumer attention, it’s worthwhile to highlight some of the undeniable benefits of social media. Here are ten that quickly come to mind. My comments in italics.

1. Cost: There are almost no barriers to entry in creating or distributing social media content. Or put another way, beyond your time and production costs, it’s almost free. (Still need the other nine reasons? OK.) And that single piece of content ricochets around the web indefinitely with no additional expense unlike TV, print or radio. The cost of time can be significant though, so that must always be kept in mind.

2. lntimacy: Traditional media necessitates broadcasting to thousands or millions of people at once robbing it of the specificity and dialogue that can be achieved through social media. Fans of any type want a personal interaction with the artist or brand, especially since they see it's now possible - another M30 fundamental.

3. Targeting: A key advantage of social media is that it can be far more specific in terms of isolating exactly who that brand or product wants to talk to. What’s more, consumers share the load by constantly sourcing information and products of interest and distributing them to others. Why broadcast to those who have no reason to care about you? Such a waste of time and money.

4. Nimbleness: One of the unique advantages of social media is that it allows brands to adapt to consumers buying and sharing habits almost instantly. Traditional media necessitates sizable (and often prohibitive) investments by corporations who then can’t react as quickly as market requires. While big media buys will probably never go away, they're far less necessary than ever before thanks to social media.

5. Measurement: Traditional media has to rely on long-term measurement tools to gauge the effectiveness of brand messaging. With social media that measurement can be almost instantaneous as the customers respond to brands and each other across networks, platforms and apps. When that response is negative, a brand has the chance to course-correct quickly minimizing damage to the brand. As the old advertising saying goes, "50% of advertising works, we just don't know which 50%." The age of that is now over.

6. Newness! Consumer preoccupation with whatever is new is hardly unique to social media. Yet as a function of its ability to constantly evolve in response to consumer demands, social media retains the sheen of “new” re-engaging consumer attention. With traditional media content can change but the format of distribution changes little and slowly. In marketing, "new" is more about what's current. It's far, far easier to be current ("new") using social media.

7. Exponential: As difficult as it is for a brand or product to thread the viral needle, the potential for exponential growth is almost unlimited and repeatable at a low cost. The problem here is that you never know exactly what will become viral. Still, at least the prospect of exponential viral growth is always available, while it's possible but pretty unwieldy with traditional media.

8. Participatory: As soon as the barriers to content creation approached zero, consumers quickly stepped into the vacuum and began participating in the commercial dialogue. It’s as if the longstanding presumption of traditional advertising that brands and consumers were in dialogue has finally come true thanks to real-time communication tools. Once again, true fans, super-fans, "tribe" members crave interaction, especially since they now know it's possible.

9. Proximity: Time and distance have virtually disappeared as a barrier between consumers around the globe. As such, social media has created a global, connected community like never before. That opens up enormous potential for success or failure depending on how well brands understand the new dynamics in play. We are truly in a global economy, especially if social media is used.

10. Future: Just as advertising dollars have followed consumer eyeballs online, they will shortly follow consumer adoption of mobile community (enabled by smart phones) as the new defining social media dynamic. While new rules of engagement will appear and consumers will increasingly be defined by where they are (hello, Foursquare), much can be divined about how to prepare for the future from current social media practices. Social media evolves quickly so you must stay on top of the latest evolutional trend to take advantage.

What other advantages to social media do you see?

Music 3.0 News Roundup

Happy Thanksgiving for those of you who celebrate it. Here's a roundup of the relevant Music 3.0 (M30 - "em 3 oh" - for short) new thanks to Bruce Houghton's fine Hypebot blog:

• 30,000 Internet Users to Receive File-Sharing Cash Demands - As many as 25,000 BT and 5,000 customers of other ISPs will be receiving shock letters demanding big payments during the coming weeks. Lawyers in the UK have been granted more court orders which force ISPs to hand over the details of individuals who they say have been monitored sharing hardcore pornography. (TorrentFreak)

• The Business Of Lady Gaga: She isn't the music industry's new Madonna. She's its new business model. (Forbes)

• Spotify plans to rock the U.S. digital music landscape early next year. (LA Times)

• Hulu U.S. video streams soar almost 50% in October, Google’s YouTube flat. (VentureBeat)

• Ted Cohen (one of the contributors in my Music 3.0 book) on Midem: "Sixty Days Out, So Much To Think About". (MidemNet)

• Rock Band songs now top 1000 from 390 bands. (Billboard.biz)

The New Music Publishing Reality In Music 3.0

Music publishing has always been the quiet, but steady money maker of the music business. Even though it's perhaps the least glamorous of just about any part of the entertainment industry, it made its participants vast fortunes. The real money makers of hit records were always the songwriters and publishers and not the artists, a fact that few are aware of unless you're actually in the business of songwriting. That's what makes the new publishing reality in Music 3.0 so important.

Before Music 3.0 (the era of paid digital music), it was pretty easy for a songwriter and publisher to make money if the records or CDs were selling. Each song on an album brought in 9.5 cents, which the songwriter and publisher would split (called a mechanical royalty). That means if a writer had 10 song on an album, he would generate $.95. Multiply that by a few million and you have some real money. Plus the song would generate additional revenue when played on the radio (called a performance royalty), as determined by a rather obtuse allocation of a larger pie paid to either ASCAP or BMI.

In Music 3.0 (M30 for short), that's all changed as the post regarding Lady GaGa and her earnings of $169 from Spotify for one million plays indicated. While a paid download from a digital distributor like iTunes still pays the same 9.5 cent mechanical royalty, a stream pays only $.0018 in 2009 with an increase to $.0019 in 2010! That's less than a fifth of a penny per stream!!

Now by my calculations, that should still end up being $1800 that Lady G should have generated so the 169 bucks seems way off, but it does illustrate an important point about publishing in M30. Many publishers are terrified that a subscription model of digital music (where you pay $10 a month or so for as much music as you can stream) will be adopted. The reason? Greatly diminished mechanical royalties, and less that a fifth of a penny generated for every stream played.

Indeed, publishers are finding that their administration costs in accounting for streams are far greater than the income generated, and that's the heart of the matter. In streaming, the creative part of the business (artist, songwriter, and by proxy, publisher) look to be making a whole lot less income than in a download world. Plus, most artist's record label contracts don't adequately cover how much of what the label takes in from streaming will actually be paid out to the artist, so you can bet that it'll be the very least amount possible, or even less. All this adds up to a new music publishing reality in M30.

But it's not all bad. Publishing does have its bright spots and we'll cover the ways the a writer can make money in M30 in the next post.