Taylor Swift got a few knocks over a recent column she wrote about the future of the music industry, but a recent RIAA study suggests she’s more right than her critics would suggest.
There aren’t too many artists who can sell a million albums in the United States anymore, thanks to the age of streaming. In fact, you could probably count the artists who can still do it on one hand.
Despite those dour odds, one of those lucky artists is still optimistic about the future of the album.
Country-pop superstar Taylor Swift, whose two most recent albums each sold more than a million copies in their first week alone, recently wrote a high-profile piece in the Wall Street Journal in which she describes herself as “one of the few living souls in the music industry who still believes that the music industry is not dying … it’s just coming alive.”
Swift’s optimism is in sharp relief to recent statistics from Soundscan that pointed out a troubling fact for the industry: Just one album, the soundtrack to the movie Frozen, managed to sell more than a million copies between January and June. In fact, its 2.7 million copies sold top the next-best seller, Beyonce‘s self-titled album, by 2 million copies. Also in fact, just five artists have managed to sell more than half a million copies. The trend is worsening, too: While there was just one million-seller in the first six months of 2012 and 2013 (the only other two years where that’s happened), both of those years had far more albums go gold during the period.
Nonetheless, Swift says this is merely a sign that artists have to try harder to surprise and engage their audiences—that platinum albums are still possible, but they require much more interaction with fans on social media. In fact, she suggests that in the future, artists will get signed based on their fan bases rather than growing fan bases due to a label’s marketing push.
“It isn’t as easy today as it was 20 years ago to have a multiplatinum-selling album, and as artists, that should challenge and motivate us,” she adds.
Just like we’re embracing new digital platforms, labels are also pioneering new ways to market artists that would have been impossible just a few years ago.
A Changing Playing Field
Swift’s comments earned a bit of cynicism for their optimism and simplicity, and critics were ready to pop holes in her points. Nonetheless, there’s a big-name group that largely shares much of her optimism on the music industry in the digital age: The Recording Industry Association of America (RIAA).
In a June report by the trade group that analyzed the industry’s track record in the digital age, RIAA noted that even with the decline in record sales, the industry is doing better about paying artist royalties, with songwriting royalties increasing by 44 percent and artist royalties increasing by 36 percent.
But that success doesn’t come easy. One particularly troubling fact highlighted in the report is that 80 percent of all albums sold in 2011 sold fewer than 100 copies, and 94 percent sold fewer than 1,000. Records that sell 10,000 or more copies are so rare these days that the report considers them hits—despite the fact that 10,000 copies is only a fraction of the sales of a gold record.
The result is that investments in artist development are often a wash, with 16 percent of record industry revenues going into developing artists—but ensuring the label will break even less than 20 percent of the time. In other words, Swift’s point about labels signing musicians with existing fan bases is on-point because it means the industry will be more likely to make back its investment.
Turning Records Into Events
One place where the RIAA particularly dovetails with Swift involves her take on marketing. While the direct interactions she mentions still matter, record labels can help leverage that fan base and help artists build the element of surprise around their work.
“Just like we’re embracing new digital platforms, labels are also pioneering new ways to market artists that would have been impossible just a few years ago,” the group explains, citing examples of how it scored hit records on limited budgets for artists such as Daft Punk and Hunter Hayes, while still managing a wider-scale marketing push for one of Swift’s pop-star competitors, Katy Perry.
What do you think—does the album still have a chance in the age of Spotify? Offer your take in the comments.