Digital Music Percentages

A disconnect exists between the % of digital music consumed and the % of Record Label sales derived from those digital sales.

EMI’s CEO, Elio Leoni-Sceti, recently stated that “seventy percent of music consumption is digital and yet only about twenty percent of music company revenues are derived from digital.”

It is likely that 80% of record label sales are derived from products that are having rapid sales declines. This disconnect will not be sustainable long term.

So, what can the record labels do to capture more sales for products that people are actually buying? First of all, the labels need to be on the cutting edge of technology and know how their clients consume music. Morgan Stanley recently made headlines for an article written by a teenage intern about the non-use of Twitter by teenagers. It took the media world by storm yet I doubt it was news to teenagers.

How many teenage interns do you think the labels have working for them?

Second of all, the labels must rapidly diversify away from selling records, either digital or physical. If there is a value-ad to the artist, the label will be able to make money. So far, it seems as though the labels only value-ad is still the record.

Stay tuned,
Erik
erikrostad.com
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