A little over a week ago, the leaders of the country music business joined together for the annual Country Radio Seminar. CRS 2010 featured showcases, meetings, and panel discussions centered around country music and the radio industry. No doubt, some of the discussions, formal or informal, touched upon the past, present, and future trends of the music business in reference to mp3s, revenue streams, record labels, and where to go from here?
Despite the two percent increase, total album sales continued to slide at an alarming rate. Physical and digital sales combined for 373.9 million albums sold in 2009, down from the 428.4 million in 2008 for a 12.7 percent decrease. The number of albums purchased via online retailers also dropped significantly, from 27.5 million in 2008 to 25.3 million in 2009, an eight percent slide. However, more consumers flocked to digital services for album purchases: the year-end figure of 76.4 million albums sold is a 16.1 percent increase over 2008’s figures. It appears only CDs were affected by the album slump, as vinyl sales were also up 33 percent over 2008 figures. The sales decline was spread across all genres: rock sales were down 11.1 percent, rap sales down 20.9 percent and Latin music down a staggering 34.3 percent. Only the country genre, which saw its total sales slump slightly from 47.6 million to 46.1 million, and jazz, whose sales only fell 0.1 percent from 2008, seemed to have bucked the trend. (Kreps, Rolling Stone)
With sales declining, who is getting it right? Mike Masnik, CEO of Floor 64 and the editor of Techdirt, suggests we give Trent Reznor of Nine Inch Nails a closer look. As the CEO of Floor64, Mike helps companies understand new media, social media trends and how to connect with the different communities they deal with. In his own search to be an industry leader and understand the music business he has again and again been compelled by the business decision of Trent Reznor. Trent’s business models intrigue him – what is he doing right?
In a consumer driven society where we are faced with hundreds of decisions a day on where to eat, what to listen to, what to buy, etc, Nine Inch Nails and Trent Reznor have figured out that you need to serve your fans. Mike Masnik’s case study of Trent points out that he has figured out the secret of a successful music business model:
CwF + RtB = $$$$
Connect with fans and give them a reason to buy will result in a consistent revenue stream and guarantee longevity.
This sounds simple and you might say, “What’s so special about that?” Watch his full presentation here – it is worth the time if you are attempting to navigate the waters of the unpredictable music business.