Playback and payback series; (part 21) 150 Records = 50 Percent of Revenue (continued)

Independent record companies, meanwhile, operate with far less overhead than the majors. The accepted independent average break-even range is 10 000 – 24 999 sales, depending on the recording cost and overhead of the indie. But even this lower threshold is rarely met; only 3 percent of the titles released in 2000 sold over 10 000 albums, accounting for just less than 83 percent of CD sales that year. That’s less than 5 percent of product accounting for nearly 85 percent of total sales.

Five years later, Christman did these calculations again for new releases. In 2005, over 60 000 albums came out, including reissues with new bar codes and digital-only releases. These new releases accounted for 243.1 million of the 618 million albums sold in 2005. Of those recordings, only 32 garnered sales of over a million units, accounting for 57.2 million copies, which means those 32 albums, 0.05 percent of the releases, accounted for more than 10 percent of the record business.

Another 62 albums went gold, selling between 500 000 and 999 999 copies; 103 sold between 250 000 and 499 999; and 213 others scanned between 100 000 and 249 999. So a total of 410 albums sold a total of 169.2 million copies – about 0.7 percent of the new records put out that year accounted for 70 percent of all new-release sales and 27 percent of total sales that year.

While these figures account for “legal” digital downloads via iTunes, eMusic, and the like, digital sales still seemed more a curiosity than numbers of any consequence. The total number of digital album sales ran to 410 863, which accounts for 0.067 percent of all album sales. Of the 16 580 digital-only albums released in 2005, the majors issued 2 935 while 13 645 came from the independents. The majors’ digital-only album selling about 12 000. Independent digital-only releases scanned an average of about 30 sales per title.

However, these digital releases may well become part of record retailing’s “long tail.” The long tail theory, proposed by Wired magazine’s editor-in-chief Chris Anderson, basically states that if you have unlimited space for an unlimited number of products, some will sell very well, and some might sell poorly but consistently. If you plot them on a graph, you get something that looks a lot like a sleeping rat with a long, long tail representing those items that sell very few copies. However, taken in aggregate, this long tail accounts for half of all sales, sort of the flip side of the fact that 0.35 percent of all albums represent over 50 percent of all sales. The long tail, so the theory says, over time might just make these marginal recordings financially viable.

Between 1995 and 2005, that potential long tail grew substantially. The number of major-record new releases jumped from around 6 500 to over 11 000, and independent releases more than doubled from 22 000 releases to nearly 50 000, bringing the indies’ share of releases from 75 percent to 81 percent.

So what’s the point? Well a few spring immediately to mind. Since the charts are gauged by sales, those 0.14 percent of albums that broke even are the ones that made the charts, got onto the radio, and got all the publicity. These are the albums from that year that everyone knows. And indeed, like the little girl with the curl, when the record business was good that year, it was very, very good. In 2000, five albums sold over a million copies in their first week in release, naturally zooming and booming to the top of the charts, bringing musical immortality and uncounted riches to such culturally important (and I’m only being half sarcastic here) artists as the Backstreet Boys, NSYNC, Britney Spears, Limp Bizkit, and Eminem.

This leaves over a quarter of a million albums fighting for a little less than half of the recorded-sound portion of the nation’s disposable income – a shrinking figure, as we’ll discover. These albums, many on independents with little promotional budget and little hope in the traditional avenues of promotion, generally have to count on press or word of mouth for exposure – certainly, for reasons we’ll get into later, they cannot count on the radio. Not even records from major companies with huge promotion budgets can count on that anymore.

More important, of those 35 000 or so albums released in 2000, the average person probably could only hear music from about 150 or so of them from generally available media, even music a person would never actively listen to, heard walking down the street, coming out of stores, via airport sound-systems, behind commercials... there’s music everywhere! In the meantime, the record companies have consistently released in excess of 30,000 recordings onto the market each year for over a decade and twice that much in 2005 alone.

What do you think are the chances that one of those tens of thousands of records might become your new favourite of all time, if only you got the chance to hear it? And can a business in which 5 percent of its product supports the other 95 percent afford not to figure out a way to get that music heard and bought?

“In the pop-prism mentality of success in today’s world we are inundated with numbers, numbers, numbers,” Little Feat pianist Bill Payne said, “as if that is representative of any kind of quality.”

That’s important to keep in mind. The charts have nothing to do with quality – chart numbers denote quantity, the number of units of a particular product sold versus all the other products of that type, in this case compact discs. As we saw, the old saying that nothing succeeds like success takes on whole new dimensions in a peer-driven, familiarity-motivated arena like music, where charting means more sales on any number of levels. This leaves the vast majority of the music produced and recorded in any given year virtually unheard. When I tell my friends that they can hear more good music today than at any time in history, I’m talking about these CDs, these bands, and this music that falls through the cracks.