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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

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February 03, 2006

Odds and Ends
by David Harrell
At the end of Wednesday's post (The Digital Pricing Conundrum, Part III), I wished for more specific numbers on single vs. album sales for downloads and other data breakdowns. Guess I should've looked a bit harder, but a couple of the stats I was looking for turned up in this piece from yesterday's NY Times: "When All the 'Greatest Hits' Are Too Many to Download."

According to the article, more than 350 million single song downloads were sold last year, along with 16.2 million "full album" downloads. Based on the $9.99 iTunes album price, that translates into 68/32 split between singles and albums, in terms of raw sales dollars. (This Forbes story pegs the song download number as 352.7 million, but with no specific mention of full-album downloads.)

Several industry folks are quoted, reiterating the fear that consumers are simply "cherry picking" songs from albums:
"There are lots of newbies out there, people who don't know of any of these bands, and they could easily buy one song," said David Dorn, senior vice president of new-media strategy at Rhino. "What keeps me up at night is, how do I get you to see that, with the Ramones, you shouldn't just buy 'Blitzkrieg Bop' and be done with it?"
Is there any way to quantify whether or not a single song sale translates into a "lost" album sale? Plenty of them probably do. But I think there's something else happening here. I'd bet -- for older material, at least -- that a fair portion of single song sales are simply "convenience" purchases of single downloads of songs already owned on CD.

That is, some consumers might prefer to pay 99 cents to avoid the hassle of ripping just one song from a CD they already own. In theory, it's easy to just pop a CD into iTunes and rip it to mp3, but I can't rip from iTunes on my PC (just won't work) and have to use another program, which requires me to type in all of the song information. It only takes a few seconds, but there is a hassle factor, especially if you're trying to create a mix or playlist of songs from different albums. I've never counted, but my best guess is that my wife and I have a combined CD collection of nearly 1,000 discs. Whenever I look at three bookcases filled with CDs, the thought of transferring all of them to mp3 is truly overwhelming. There are at least a couple hundred of those discs that I'd be happy to chuck as long as I had a digital copy of one favorite track. But there's no way I'm paying $9.99 for digital files of the entire disc...

Wednesday's post also made a passing reference to "loss leader" CD sales at Best Buy. Right after I posted, I found some great links via Largehearted Boy. Patrick Monaghan of Carrot Top Distribution posted several pieces at the Saki Store blog about Best Buy selling indie releases as loss leaders. Mac MacCaughan at Merge (label founder and musician -- Superchunk and Portastatic) responds in this long thread.

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