Ben Cardew 

As digital music sales leap, paid-for print circulations tumble

As music companies finally get to grips with the challenges of the internet, the paid-for press is struggling. By Ben Cardew
  
  

Lady Gaga
Lady Gaga's latest album, Born This Way, was part of an aggressive price-cutting campaign, with Amazon offering the download for 99c. Photograph: Wally Santana/AP Photograph: Wally Santana/AP

Just nine years ago, Britain had a thriving music press and a music industry that was defying the worldwide trend for falling sales. While still some way past its peak, NME enjoyed a circulation of 72,442 in 2003, while the UK's recorded music industry boasted an income of £1.22bn that year, up £13m on 2002.

The music industry's woes since then have been well documented. However, figures released last week suggest that the recorded music business, for all its troubles, is actually faring far better in the transition to digital than the British music press.

First to arrive were stats from the BPI, the recorded music business's trade organisation, which revealed that digital music revenue in the UK grew 24.7% in 2011 to £281.6m, offsetting two-thirds of the decline in income from physical sales. Overall, recorded music revenues were down just 3.4% year-on-year at £795.4m.

Then came the ABC consumer magazine circulation figures for the last six months of 2011 and they did not make easy reading for the traditional, paid-for music press. NME saw its circulation fall to just 27,650, while Q's average monthly sale dropped 3.6% in the period. Among the paid-for titles, only Bauer's Mojo recorded a circulation increase.

Both music press and recorded music have, of course, faced considerable competition from free in the digital age. For record labels, this has come in the shape of online piracy and, more recently, ad-supported streaming. For the music press, competition has come from websites, blogs, aggregators and a number of free magazines that have tapped into the trend for free content.

Tellingly, these free titles performed well in the ABCs. The Fly, a free monthly music magazine, consolidated its position as the UK's No 1 music title, with a 0.2% rise in distribution to 100,574, while the Stool Pigeon posted a circulation of 53,676, almost double that of NME.

The comparison between the two sets of figures is not entirely straightforward: the ABC stats record magazine circulation, not a print title's website traffic – although the figures for the second half of 2011 did for the first time include "digital edition" sales including Apple Newsstand data for some publishers. The BPI figures, on the other hand, include income from all forms of recorded music, including physical and digital sales, streaming sites and ringtones.

Nevertheless, what both industries have experienced is, in effect, the same thing: an unbundling of their content, as online consumers cherry-pick individual songs from albums and individual articles from magazines.

Both, then, need to work out ways to reconfigure their key product for the digital age. And the BPI figures suggest that – despite a number of early mistakes – the music industry is getting to grips with this a lot better than many people would give it credit for.

This is particularly notable in the shift in sales from individual downloads towards higher-value digital albums. Income from the sale of single tracks rose 11.3% to £120.5m in 2011 but this was dwarfed by a 43.2% rise in income from digital albums, to £117.8m.

For the music industry, this will be cause for celebration. For a long time the digital album has been seen as the holy grail of music sales, a product with a high profit margin and lasting consumer appeal, as opposed to the disposability of the 79p download.

As a result, the business has been working frantically on plans to boost sales of digital albums, including bonus digital content, the iTunes LP format and some aggressive price cutting.

The latter has proved controversial but effective. Lady Gaga's latest album, Born This Way, sold 1.1m copies in the US in its first week of release, after Amazon's American download store offered the album for just 99c but the move provoked uproar in the wider music industry.

The BPI figures show, however, that this aggressive price cutting is on the wane: the 43.2% rise in income from digital albums in 2011 far outstrips the 26.6% growth in the number of digital albums sold over the same period. In other words, the music business has managed to boost sales of digital albums while increasing prices.

Brian Rose, managing director of Universal UK's commercial division, explains that there are two key drivers for digital album sales.

"New digital music services have made it easier for music fans to buy their favourite music - the immediacy of digital is driving increased sales of tracks and albums," he says. "Legal streaming music services like Spotify and Deezer are also making it easier for music fans to discover artists and listen to albums before deciding to purchase."

Music magazines have also been looking to digital to increase sales, in the form of digital subscriptions, iPad editions, interactive magazines (Q) and codes published in the physical title that unlock extra content online (NME). But the ABC figures suggest they still have some distance to go.

As for the music industry, it may well be far from out of the woods – in the UK, the number of albums sold in 2012 is tracking way down on 2011 – but the signs are increasingly promising that digital income will, one day, make up for the shortfall in revenue from old-fashioned records.

This is good news for Adele et al. But, with bandwidth speed ever increasing, it is also food for thought for the film, game, book and wider media businesses.

 

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