New records: Sales and streaming

The sometimes beleaguered music industry is rejoicing as two album releases come into the market as record-breaking successes. But the jubilance goes in two different directions.

Adele’s 25 album, which had HIT written all over it in the weeks leading up, is streaking toward a record-breaking first week in sales. Over 900 units moved through iTunes on Friday alone, when the album dropped. The current first-week sales record is held by NSYNC, at 2.42-million. Current tracking has Adele exceeding that mark. The album is absent from on-demand music services in the first distribution phase.

Meanwhile, Justin Bieber is setting new stream benchmarks in Spotify, where his new album Purpose completed a first-week record of 205-million worldwide streams, 77-million of which were in the U.S.

Much publicity has swirled around Adele’s decision to withhold her album from interactive streaming, Questions of right and wrong are debated, but there is no objective right or wrong — it is merely distribution strategy. There is nothing inherently wrong with windowing a new release, although it does risk alienating market segments that are unwilling to cross over from one consumption platform to another. Will online music subscribers who never use iTunes remain interested in Adele’s 25 when (if) it is finally available to them, after the initial marketing is over?

Conversely, does Justin Bieber cannibalize his unit sales by swarming into streams? Or does the interactive exposure foster some amount of sales while reducing piracy?

Speaking of cannibalization, Adele’s album was widely, freely, and illicitly available on media-piracy sites starting Friday, with downloads that included special tracks and videos that were licensed exclusively to Target. So the risks of a divided market, to content rights-holders, go both ways. Distributing everywhere courts the possibility that high-margin channels will not be optimized with supply. The alternate path, withholding high-demand products from a populated channel, squeezes supply into black markets.

Plainspoken music pundit Bob Lefsetz thinks that ditching the stream is both bad business and morally wrong: “How the hell can we solve the world’s problems if the music business itself can’t do what’s right for the populace?”

Chris Castle counters like this: “Her recording reminds us of the one idea that streaming boosters and other Spotify apologists want you to forget. The CD configuration still makes up an average of 50% of sales, particularly for superstar releases, and in Adele’s case, CDs and digital downloads make up 100% of the album product configuration for 25 at least for the time being.”

Neither one is inarguably right, or wrong. But for this author, Adele’s new album doesn’t exist. It is unbought, unpirated, and by the time it enters the stream it will be forgotten. Justin Bieber, though, is unavoidable! And therefore relevant.


Brad Hill

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