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Will Page, Chief Economist at PRS for Music, used his panel on day one of The Great Escape to explore the ‘Adele effect’ on British music, looking behind the sales figures to uncover what’s really happening in the recorded music industry.
So, I’d like to start by looking at the first of the three main music revenue streams; selling records. We all know that Adele has now outsold Michael Jackson’s Thriller. But if you think about Michael Jackson’s Thriller, it has gone through four forced format changes, from vinyl to cassette to CD to mp3. That’s four times you have had to buy that again. Adele has had just two years to outperform such an album. If we lay out the winners and riders from the Top 10 albums last year, there are five albums which broke the one million sales mark, and two of them are Adele’s. It has been a phenomenal year for her and we have to start discussing the notion of hits – she has hit like nothing else before.
Of all those Top 10 albums that sold in 2011, Adele counted for 39 percent of them. Put together, her albums 19 and 21 have sold more than one million digital albums to date. Meanwhile, her singles Rolling in the Deep and Someone Like You sold more than 2.4 million downloads. So, were the people who bought those single downloads the same one million that went on to buy the album? If so, that’s just like the good old days.
It’s worth noting that Adele’s not the only story in the recorded music sector. I want to talk about hits. You are aware that the top 20 percent of titles generate 80 percent of demand in retail. Therefore the remaining 80 per cent of titles only generate 20 percent of demand. And, if you follow our work, you might be aware of an emerging 95-rule. What we are saying here, is that in this long tail inventory of more choice, the top five percent of titles generate 90 percent of demand, while the other 95 percent of titles generate just 10 percent of demand. We are seeing this across digital marketplaces. So, we actually have this hit-centric business, which is opposite to what the long tail theory predicted.
We’ve looked deeper into this and carved up album sales by threshold, that is, by how many sold. We did this across two time periods: 2002, when the record industry peaked, and 2011, when the industry had decreased by a third. What’s interesting is that the number of hits that sold past the million mark remained pretty constant. In 2002, six albums sold more than a million and in 2011 five did. In 2002, seven got between three quarters of a million and a million, while in 2011 it was six. Now that’s bobbed along pretty constant for the past decade.
But of the albums that have sold between 100,000 and 750,000 copies, 50 fewer albums sold in that range in 2011 compared to 2002. That’s a drop of 35 percent. What this is telling us is that the hits still hit, there’s no problem there, but we’ve seen a big slump in demand for titles that make up the ‘body’ of the industry. This may be due to increased choice or maybe something that’s happening in media. It’s definitely something we should all explore, considering many artists and managers in the audience will be aiming for this mark when their careers take off.
Of all those Top 10 albums that sold in 2011, Adele counted for 39 percent of them. Put together, her albums 19 and 21 have sold more than one million digital albums to date. Meanwhile, her singles Rolling in the Deep and Someone Like You sold more than 2.4 million downloads. So, were the people who bought those single downloads the same one million that went on to buy the album? If so, that’s just like the good old days.
It’s worth noting that Adele’s not the only story in the recorded music sector. I want to talk about hits. You are aware that the top 20 percent of titles generate 80 percent of demand in retail. Therefore the remaining 80 per cent of titles only generate 20 percent of demand. And, if you follow our work, you might be aware of an emerging 95-rule. What we are saying here, is that in this long tail inventory of more choice, the top five percent of titles generate 90 percent of demand, while the other 95 percent of titles generate just 10 percent of demand. We are seeing this across digital marketplaces. So, we actually have this hit-centric business, which is opposite to what the long tail theory predicted.
We’ve looked deeper into this and carved up album sales by threshold, that is, by how many sold. We did this across two time periods: 2002, when the record industry peaked, and 2011, when the industry had decreased by a third. What’s interesting is that the number of hits that sold past the million mark remained pretty constant. In 2002, six albums sold more than a million and in 2011 five did. In 2002, seven got between three quarters of a million and a million, while in 2011 it was six. Now that’s bobbed along pretty constant for the past decade.
But of the albums that have sold between 100,000 and 750,000 copies, 50 fewer albums sold in that range in 2011 compared to 2002. That’s a drop of 35 percent. What this is telling us is that the hits still hit, there’s no problem there, but we’ve seen a big slump in demand for titles that make up the ‘body’ of the industry. This may be due to increased choice or maybe something that’s happening in media. It’s definitely something we should all explore, considering many artists and managers in the audience will be aiming for this mark when their careers take off.
