If you’re anything like this writer, you are welcoming 2014 with open arms and feelings of anticipation, hope and excitement. Many Music Row offices are already deeply embroiled in creating new pathways to success for 2014. And we applaud that.
But starting a new year also carries the obligation to study the past. Often it takes more than one year to appreciate a trend. So here to help you better understand where we’ve been, where we are and perhaps where we’re going we present—A Decade of Country Album Sales by actual units, estimated dollar value and by annual percentage of gain/loss.
The green bars show actual units sold each year in millions. The high water mark during this period was 2004 when country scanned 77.912 million units. 2013 is the shortest bar showing sales of 39.89 million, a nine-year fall since 2004, of 38 million units or about 49%. That one fact pretty much highlights the current state of the album business.
From 2002 through 2006 country mostly maintained sales scans over the 70 million mark (actually 2003 slipped to 69.3 million), but then the cascade effect began.
Our second graph (blue line) shows annual percent of gain/loss over the same period. Note that the line moves above and below the zero line showing that sales have increased and decreased year over year during the decade. However, sales increased in only three of the 12 years shown on the graph and therefore decreased nine of those years. This year’s 10.7% drop seems steep, but in 2008 sales tumbled -24%!
Our graphs are based upon units, but how does that translate in dollar terms. Back in 2002 retail and wholesale album prices were higher than today, but let’s look at the entire period using todays average numbers, $9.99 retail and $6.00 wholesale.
Translating 2004’s sales of 77.912 million units into today’s revenues would generate retail sales of $778.35 million and wholesale revenues of $467.47 million (see table). In 2013, sales of 39.89 million units created retail sales of $398.50 and $239.34 million wholesale. The table shows that over nine years a lot of money has evaporated from the country album business—almost $380 million dollars in retail terms. To be fair, today’s business has additional revenue sources such as digital track sales, streaming royalties, endorsements and other opportunities.
Will the country industry make up the loss shown in this table by developing and effectively monetizing these new opportunities? How will that process change the size and shape of the pool of new and established artists and the companies behind them? The jury is still out, but there are good reasons to be hopeful.
But as for the album business…well, it’s definitely not quite over, but I think I hear the fat lady warming up to sing…