Labels Forced to Adapt to Album Decline

Filed in archive Innovation , Major Labels , Marketing on March 26, 2007

The rise of the single is one of the pillars of the digital transformation of the music industry. Last year a landmark point was reached - more singles were sold than albums. That presents a painful dilemma for the major labels. Where will the money come from when the income from singles is a fraction of that from the much larger album?

The New York Time reviews a few ways the labels are adapting to declining CD sales.

SMALLER DEALS. Instead of a six figure contract to create an album, artists are getting paid much less to create ringtones or a few songs for digital downloads. If those catch on, only then do they get a larger deal for the full CD.

BUY ONCE. PERIOD. A top consumer complaint is being forced to buy the same song twice (or more) when acquired in a new format. The labels are showing signs of flexibility. They are consenting to an Apple plan that would give a credit to iTunes buyers credit for downloads if they buy the album

ARTIST SUBSCRIPTIONS. A few labels are considering plans for artist subscription services. Subscribe to your favorite artists and you'll receive songs, videos, and other products and discounts over time.