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player ready...The record industry is busy breaking out the champagne to celebrate its big comeback–and pretending not to notice that the fizz isn’t quite as intoxicating at it might be.
After three straight years of decline, CD sales are up 14 percent so far this year compared to 2003.
But illegal downloading–the bane of the industry–is more popular than ever.
And it appears to be here to stay, says Eric Garland, CEO of BigChampagne, a company that monitors downloading the way Nielsen tracks TV watching. That’s despite wave after wave of lawsuits against downloaders (the latest batch of 531 suits was filed last month) and the highly publicized rollout of legal music downloading platforms including iTunes and the revived Napster.
For the first two months of 2004, an average of 4.5 million people were logged into major file-sharing networks such as Kazaa, Grokster and Imesh at any given time, Garland says.
That’s a 34 percent increase in downloaders over 2002, when BigChampagne monitored an average of 3.36 million users.
“It’s like holding back raindrops,” Garland says. “You’re not gonna hold back the rain.”
Singer Norah Jones epitomizes the two-sided nature of the music business today. Her second album, “Feels Like Home,” was the first CD to sell more than 1 million copies in its debut week since July 2001, when ‘N Sync’s “Celebrity” did it. The whole industry is celebrating Jones’ big sales, says Geoff Mayfield, Billboard’s charts editor.
But Jones also is “the most downloaded female artist in the history of downloading,” says Garland, meaning she’s huge in both arenas–commercial CD sales and illegal downloading.
The rise in CD sales isn’t just credited to Jones. It started last fall and has continued more or less steadily, Mayfield says. He attributes the rise to a wave of good CDs that people want to buy, led by the easy-listening, broad-based appeal of Jones and OutKast’s dizzyingly diverse “Speakerboxxx/The Love Below,” which got a boost when it won album of the year at the Grammys.
The turnaround is welcome news to the music business, which saw CD sales decline by about 20 percent over three years. Record labels have been laying off staffers, and Tower Records filed for Chapter 11, as analysts predicted that eventually the entire business would convert from compact discs to online sales.
“The music industry is doing everything right right now,” Garland says. “They’re cultivating artists who make great records and capitalizing on marketing opportunities.”
But it’s not enough to even dent the tide of downloading.
“There will always be songs for the taking,” he says.
The legal download platforms such as iTunes, meanwhile, are giving consumers music they can’t buy in stores. The day after Beyonce sang “The Star Spangled Banner” at the Super Bowl, iTunes was offering it for 99 cents. (It also was a hit on other pay services, including Wal-Mart’s recently launched download service, where most songs are 88 cents).
But legal downloading is still a tiny fraction of overall downloading.
“The combined legal services are selling, say, 2 million songs a week,” Garland says. “That sounds vast, but it’s not even a trickle compared to illegal downloading,” which is estimated to be somewhere around 500 million songs a week.