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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 28, 2014

Does iTunes Radio Increase Music Sales?
by David Harrell
Back in 2009, my band the Layaways released a digital-only holiday album. While we sell some tracks from the album every year, 2013 was, by far, our best season ever for download sales. I was stumped -- we always get some holiday airplay on Internet stations like Soma FM and the occasional spin of a few tracks on terrestrial college radio stations, but there was no evidence of increased airplay in 2013 and we hadn't made any additional promotional efforts for the album.

The mystery was solved when someone tweeted that he had discovered the record via iTunes Radio. Our version of "O Christmas Tree" had been added to the "Rockin' Holiday" station, where it was receiving regular spins:

example playlist from iTunes Radio's Rockin' Holiday station

It seems very likely that the large increase in sales of our song (relative to previous years) was a direct result of the iTunes Radio spins it received. The big question, of course, is does this single anecdotal example represent an overall trend -- is iTunes Radio increasing the sales of music downloads?

It seems intuitive that ease of purchase -- you're already in iTunes and you can click to buy right there, as opposed to being directed from another website or interface to iTunes or Amazon MP3 -- might boost sales. Yet that doesn't appear to be the case. As Glenn Peoples reported in Billboard last year, the introduction of iTunes Radio did nothing to halt a year-long trend of declining download sales in 2013.

In our case, iTunes Radio was a net positive, because more than 100,000 listeners heard a song they probably wouldn't have otherwise known about, and a small percentage of those listeners purchased the track. But as noted in Billboard, a recent study by Music Forecasting makes the case that listeners are using iTunes Radio for a "lean-back" passive listening experience, one that is unlikely to result in large increases in music purchases. (The full PDF of the report is here.)

In addition to the download sales, we also received a payout from Apple for each spin of the song. As reported last year by the Future of Music Coalition and Digital Music News, Apple opted to make a direct payment to artists/labels for digital performance royalties instead of taking the compulsory path and making payments to SoundExchange.

For 103,874 spins of "O Christmas Tree" on iTunes Radio, we received $114.99 (before the deduction for CD Baby's commission). That translates to a little more than 0.11 cents per play. That's slightly less than the "$0.0013 per song plus 15% of net advertising revenue for the first year" spelled out by Apple's contract with indie labels, though I'm uncertain if that rate also includes payments Apple makes to music publishers. After I receive my BMI statement for the quarter, I can calculate the total payment we received for each iTunes Radio play.

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    THE LAYAWAYS

    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="http://thelayaways.bandcamp.com/album/maybe-next-year">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs


    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.



    album cover art from The Space Between

    <a href="http://thelayaways.bandcamp.com/album/the-space-between">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.



    album cover art from We've Been Lost

    <a href="http://thelayaways.bandcamp.com/album/weve-been-lost">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.



    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website