Google Play's Tax Day Deal Bumped Sales
Selling digital albums for $2.99 won't help Google Music reach the company's initial projections, but it's one way for the young download store to move the needle.
On April 17, Google Play priced 33 titles, representing a wide range of genre and eras, at $2.99 from for a "Tax Day Flash Sale." A title's normal price at Google Play is typically $9.49. The sale lasted one day only.
The 33 albums averaged an increase of 1,715 units compared to the prior week's sales, according to Billboard.biz analysis of Nielsen SoundScan digital sales numbers. Sales of the average title rose to 2,851 units from 1,136 - an increase of 151%. Aggregate sales of the 33 titles rose to 94,000 from 37,000. So assuming there were no other factors in the titles' increases - a safe guess since these are mostly catalog titles with steady week-to-week sales - the Google Music effect is about 1,700 units.
Google originally had much higher hopes for Google Music. As the Wall Street Journal reported Friday, Google's initial projections from 2010 for Google Music were $202 million in 2010, $738 million in 2011, $1.48 billion in 2012 and $2.35 billion in 2013. The figures were released publicly as part of Google's ongoing trial with Oracle, and the company says the projections no longer reflect its thinking of those particular business units. Since Google Music didn't even launch until November 2011, two-year-old projections for 2012 are fairly meaningless.
While it is too early to hold judgment on the success of Google Music, there's little doubt it represents just a small fraction of U.S. digital download sales and is barely on labels' and distributors' radars. This shouldn't come as a surprise since other download stores have found it difficult to capture iTunes' market share. Google has two main ways to attract music buyers: leverage its browser and mobile footprint and compete on price. The latter tactic has been in play since day one.
Titles in the $2.99 sales that were not selling much before the sale experienced the biggest gains. The title with the biggest percent increase was the Roots' Things Fall Apart, which jumped 1801% to 2,000 units. Gang Starr's Moment of Truth rose 1,660%, Beck's Sea Change jumped 1,449% and Roxy Music's Avalon rose 1,391%.
The titles with the biggest increase in unit sales were, in order, David Bowie's David Bowie, Sublime's Sublime, Rihanna's Good Girl, Maroon 5's It Won't Be Soon Before Long and Shania Twain's Greatest Hits.
New Music Sales Are Down, Despite Strong Sales Overall
Music sales have been fairly strong thus far in 2012, but there is one big red flag: current albums are down 9% through April 24, according to Nielsen SoundScan. But there's not exactly an exodus from new music. Current digital track sales are up 23% over the same period.
Here's an oversimplified but not inaccurate way to look at the trend in album sales: Digital is for newer releases and CDs are for older releases. If you've been in the music section of a mass merchant store lately, you know this is not a stretch. Through April 24, catalog album sales are up 8% but current album sales are down 9%. Catalog CDs are up 1.5% but current CDs are down 19.4%. Overall album sales have barely slid into negative numbers on the year and are currently down 1%.
Digital sales tell a different story. Total tracks sales are up 8%, current tracks are up 23% and catalog tracks are down 2%. Catalog digital albums are outpacing current digital albums, but only by a 20% to 14% margin. An oversimplified version of the story says consumers who are interested in new albums are more interested in digital than CDs, and consumers who buy single tracks are more interested in newer songs than older songs.
Falling current sales will have very real consequences on the health of the industry. New artists who can't rely on album sales must look elsewhere for revenue. If the CD becomes primarily a format for catalog titles, the entire face of brick-and-mortar retail would be changed. It will be interesting to see Nielsen offers an analysis of this trend at the NARM conference that happens in Los Angeles May 7 to 10.
Facebook May Be Taking Ad Revenue Away From Newspapers
From the "Be Careful Which Company You Enrich" file comes the story of newspapers having their advertising revenue taken by Facebook. The Financial Times' managing director Rob Grimshaw said at a conference this week that news publishers may get referral traffic from Facebook but are being "very naïve" about the impact of free social content. "Not all distribution is good distribution," he said. "We have to bring people back to FT.com, where we can generate revenue from them. It works very well, we've built a profitable model. The idea [Financial Times] journalism could be freely consumed across all media platforms is not a panacea." ( paidContent)