Here’s Why Vinyl Isn’t About To Save The Music Business And Why Albums Need Rethinking

The BPI announced that ‘album equivalent sales’ were up by 1.6% in volume terms in 2016, with vinyl and streaming identified as the key drivers. Many people retain a nostalgic soft spot for vinyl, so an apparently vinyl led revival is always going to get people’s attention. But not only is vinyl not the future (it was just 2.6% of sales in 2016), the big differences between the most popular vinyl, streaming, singles and album artists reveal just how fragmented the music business has become.

Each of the top 10 charts (album sales, singles, top streaming artists, vinyl sales) almost reads as a standalone group of artists with remarkably little cross over. In fact, only 2 artists (the ubiquitous Drake and Justin Bieber) appear across streaming, singles and albums. None appear across all four charts.

top-10s-20165

The fragmentation adds complexity to an already sophisticated and nuanced landscape:

  • Two tribes: Only one of the top single artists of 2016 (Justin Bieber) was also a top album artist. This is why the album vs playlist album argument will continue way beyond 2017. Both realities co-exist with one catering more towards older audiences and the other to younger ones. The top 10 albums list is like browsing through a high street music store CD rack circa 2005: Elvis Presley, David Bowie (twice), Coldplay, Michael Ball. Of course, there is some overlap with streaming, an inescapable overlap considering that streams are now (for all the wrong reasons) counted towards album sales. Thus, we see contemporary artists Little Mix, Drake and Jess Glyn fill the 7,8 and 9 slots, while Justin Bieber is at #4. But first and foremost this is a tale of 2 tribes, 2 groups of music fans whose tastes and consumption patterns rarely overlap.
  • Old format, old bands: Vinyl sales may have hit their highest level in the UK since 1991 but this is hardly a sign of what is to come. Indeed, a quick look through the top 10 vinyl albums of 2016 reveals that all but one of the artists were releasing music back in 1991! The exception is Amy Winehouse and she’s dead. The majority of the volume of vinyl sales is driven by nostalgic older music fans. Of course, younger people do buy vinyl too, but interestingly they generally do so as either a form of merch or as a way of supporting their favourite artist. In fact, many under 30’s vinyl buyers don’t even have turntables.

The really important takeaway from all this though, is what it means for driving sales and marketing artists in 2017. One size stopped fitting all long ago, but now there are clearly two broad groups of music audiences which must be addressed in entirely different ways, across different channels and with different tactics. At the most base level this is a case of youth versus grey, of digital native versus digital immigrant, of playlist versus album, of sales versus consumption. But it is also more complex and nuanced than that. There are overlaps and cross pollination. They may be relatively thin on the ground right now, but like some long-lost treasure map, they may point to how bridges can be built across these two worlds. If no such links can be made then ultimately this will be a story of one world hurtling to oblivion while the other booms. That is of course the more likely scenario, highlighted by the fact that (in volume terms) UK CD sales fell by 12% and download sales by 26% in 2016 while streams were up 67%.

As large volumes of older consumers switch to streaming (and Amazon should play a key role here) there will be more opportunity to join the dots. But do not mistake this simply as an opportunity to try to revive yesterday’s formats in today’s platforms. The album is clearly fading. According to MIDiA Research survey data, 68% of subscribers state that playlists are replacing albums for them. It is time to start investing though and effort in rethinking what album experiences should be in the digital era. And that conversation should have no bounds, everything should be on the table (number of tracks, street date vs continual updates, interactivity, changing content etc.).

The 2016 sales figures show us that the album in its traditional format still has a very solid, albeit quickly declining, audience. But if it is to outlive that dwindling customer base it must be rethought for the streaming era.

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What Future For The Album In The On-Demand Age?

Recently BBC Radio 1’s head of music George Ergatoudis stirred up something of a storm with his claim that “albums are edging closer to extinction”. Nonetheless there is a growing body of evidence that the album does indeed seem to be losing its relevance in today’s track and playlist led world. And the implications stretch much further than the confines of the recorded music business. (Hint: live music industry, you need to be watching your back too.)

The Advent Of Grazing

When Napster emerged 15 years ago it kick started an irreversible transformation in music consumption. The music business had spent the previous three decades turning the singles dominated market of the 1950’s into the albums led market of the 1990’s, but with Napster consumers suddenly did not have to take the whole album package anymore. The labels had their own fair share of blame. When the vinyl LP had been the dominant format albums typically had 8 tracks, but with the CD labels felt compelled to fill every one of its 74 minutes’ capacity, resulting in a preponderance of filler tracks over killer tracks. Couple this with album price hyperinflation and you had the perfect recipe for consumer revolt. Little wonder that music fans cherry picked tracks, skipping the filler for the killer. Grazing replaced immersion.

Ironically the issue became even more pronounced with the advent of the iTunes Music Store. Whereas with file sharing many users downloaded entire albums – and as bandwidth and storage improved, entire discographies – listening still skewed towards the stand out tracks. Indeed the hoarding mentality of these digital immigrants was one borne out of being children of the age of scarcity, with a ‘fill up quick while you still can’ mentality. With iTunes, price was a limiting factor and so people focused on acquiring single tracks rather than albums. Labels and artists had been scared iTunes would cannibalise album sales, they were right.

Digital Natives Set A New Pace

In the subsequent decade new digital behavior patterns have become more clearly defined, particularly among the digital natives. Playlists and individual tracks have become the dominant consumption paradigm. Even music piracy has moved away from the album to smaller numbers of tracks, with free music downloader mobile apps and YouTube rippers now more widespread than P2P. This is the piracy behavior of the digital natives who have no need to hoard vast music collections because they know they can always find the music they want on YouTube or Soundcloud if they want it.

playlists versus albums

The behavior shift is clearly evidenced in revenue numbers. Since 2008 alone US album sales (CD and digital) have declined by 22% (IFPI), while digital track sales outpace digital album sales by a factor of 10 to 1. The top 10 selling albums in the US shifted 56.4 million units in 2000.  In 2013 the number was 14.7 million (Nielsen SoundScan). Even more stark is the contrast between playlists and albums on streaming service. Spotify has 1.5 billion playlists but just 1.4 million albums (see figure). While the comparison is not exactly apples-to-apples (album count is a catalogue count and playlist count is a hybrid catalogue / consumption count) it is nonetheless a useful illustration of the disparity of scale. (In fact the 1.4 million album assumption is probably high due to a) duplicates b) singles and EPs c) compilations.)

Even the much heralded success of Ed Sheeran’s album ‘X’ does not exactly paint a robust argument for the album. ‘X’ set the record for first week global plays of an album on Spotify with 23.8 million streams. But that represents just 0.27% of weekly Spotify listening (based on Spotify’s reported 40 million active users, 110 minutes daily listening and an average song length of 3.5 minutes).

The Album As A Mainstream Consumption Paradigm Was A Historical Anomaly

This is the consumer behavior backdrop for the demise of the album.  Creatively the album still represents the zenith of an artist’s creativity and many albums are still most often best appreciated as a creative whole. Core fans and music aficionados will still listen to albums but the majority of consumers will not. The album as the mainstream consumption paradigm was a historical anomaly of the 70’s, 80’s and 90’s. In the 50’s and the 60’s the single was the way the majority interacted with music, and now in the early 21st century it is once again. There has always been space for vast diversity of artists along the niche to mainstream spectrum but as a consumption format the album is closer to the Steve Reich end than it is the Katy Perry end.

Artists And Labels Need To Catch Up With Consumer Behaviour

The majority of artists will still make albums and labels will indulge them because their organizations and business models are built around the format. But therein lies the problem: the more that consumer behavior evolves, the more distant the gap between artists’ recorded output and their fans’ demand becomes.

There is more music released now than ever before and most likely more music listened to than ever before. But the amount of music listeners in the world’s top 10 music markets – which account for 91% of revenue – has not increased at anything like the same rate. People are spending less time with individual artists and albums. In the on-demand age with effectively limitless supply they flit from here to there, consuming more individual artists in a single playlist than an average music fan would have bought albums by in an entire year in the CD era. Fewer fans develop deep relationships with individual artists. Right now this translates into fewer album sales. In 10 years’ time it will manifest as a collapse in arena and stadium sized heritage live acts. In fact we are already witnessing the impact, after all what are festivals and DJ sets if not the playlist translated into a live experience?

As painful as it may be for many to accept, the tide has already turned against the album. The challenge to which artists and labels must now rise is to reinvent creativity in ways that meet the realities of the on-demand world.* If they do not, artists will eventually find the chasm between their wants and their audiences’ needs quite simply too wide to traverse.

*For those interested I wrote a couple of reports on this very topic a few years ago:

The Music Format Bill of Rights: A Manifesto For The Next Generation Of Music Products

Agile Music: Music Formats and Artist Creativity In The Age of Mass Customisation