Manage for Success: Mid-Year Numbers, Newsletter #127, July 2013
"Manage for Success" is a free occasional newsletter for record label executives who want to operate their companies efficiently and successfully. It's published by Keith Holzman of Solutions Unlimited, a management consultant, troubleshooter, and trusted advisor, and is based on his many years as a senior executive in the music industry. Copyright 2013 by Keith Holzman, Solutions Unlimited. All rights reserved.
No, you haven't missed any of these newsletters because I haven't sent any since December. After writing more than 125, I had run out of new material and didn't wish to send newsletters that were without real news or useful content.
However, Billboard on-line recently published an article by Ed Christman detailing the first six months of this year's Nielsen SoundScan data, and it's not a pretty picture. Specifically, Digital Track sales are down 2.3 percent to 682 million and the trend seems to be worsening. For example, the first quarter had a loss of slightly more than 1.3 percent where the second quarter decline increased to 3.3 percent.
Sales of Catalog items were 366.7 million units -- off by 20 million. However, Current Track sales had a slight (4 percent) increase to 315.5 million. Album sales continued their decline by 5.6 percent to 142 million units, where the second quarter loss was worse than the first quarter.
On a positive note, Digital Album sales gained 6.3 percent to 60.8 million units. But only one album scanned more than a million -- Justin Timberlake's "The 20/20 Experience" which sold just over 2 million units. The runner up was Bruno Mars' "Unorthodox Jukebox" with 985,000.
As for market share, Universal Music Group continued in first position at 37.6 percent in Albums plus Track-Equivalent Albums (where 10 tracks equals one album.) That's an increase of seven percent since the first half of last year, largely due to the addition of the bulk of EMI's assets.
Sony Music Group was second with a 29.6 percent share of market, up slightly from last year. In third position is Warner Music Group, which slightly increased its share to 20.2 percent. This may improve somewhat in the last half of the year due to the recent acquisition of Parlophone.
Independent labels as a group were down slightly to a 12.1 percent market share when measured by distributor ownership, whereas if measured by label ownership, Indies had slightly more than a 30 percent share.
As for retail, Chains and Mass Market accounts were down 17 percent to 23.3 million units, Discount Department Stores were off 17 percent to 36 million units, while independent stores were off 10 percent to 9.4 million -- not a pretty picture!
For a bit of good news, online accounts -- both digital and physical -- continued to increase market share. Download store sales were up 6.3 percent, and Online, Mail Order and Concert Venues combined gained 5.7 percent. We're talking about Apple for downloads, and Amazon for physical product and downloads.
If you need advice on how to make your label more successful, let me help you as I've helped so many others "manage for success." Email me so we can discuss how I might improve your business. <http://www.holzmansolutions.com/contact.html>
Or if you're considering creating your own label, I recommend "The Complete Guide To Starting A Record Company," now in its Third Edition. You can read the complete Table of Contents, and download the introductory chapter at <http://www.recordcompanystartup.com/>.
There's also a great deal of useful ideas and information in previous newsletters, so I urge you to take a look at the Articles page on my website:
What's one to make of these numbers?
First, there's way too much "product" out there, much of it with little musical or emotional value. It makes sense to release only albums or tracks that are truly worthy -- those with solid writing and memorable performances.
Second, labels must do their utmost to make potential listeners and buyers become aware of their music. That means doing substantial publicity with relevant publications, strong promotional efforts at appropriate over-the-air broadcasters, satellite stations, and such online carriers as Spotify, Pandora, etc., even though there isn't much "direct" money in it. Be sure your artists are working in front of the public, performing wherever and as often as possible. Consider it as part of your public awareness strategy, and laying the groundwork for the future of your artists and their music.
None of this is startling, and I've been writing about this and stressing these ideas for many years, yet too many labels continue to release sub-par "product."
I hear too many people suggest that the Music Industry is dying a slow death. I suggest we all do our utmost to see that doesn't happen.
Until next time, have a great Summer!
Keith Holzman -- Solutions Unlimited
Helping Record Labels Manage for Success.
Copyright 2013 by Keith Holzman, Solutions Unlimited. All rights reserved.
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