Apple plans iTunes credit for purchased singles if customers later buy album

Apple Store“To the regret of music labels everywhere… fans are buying fewer and fewer full albums. In the shift from CDs to digital music, buyers can now pick the individual songs they like without having to pay upward of $10 for an album,” Jeff Leeds reports for The New York TImes.

Leeds reports, “Last year, digital singles outsold plastic CD’s for the first time. So far this year, sales of digital songs have risen 54 percent, to roughly 189 million units, according to data from Nielsen SoundScan. Digital album sales are rising at a slightly faster pace, but buyers of digital music are purchasing singles over albums by a margin of 19 to 1.”

“Because of this shift in listener preferences — a trend reflected everywhere from blogs posting select MP3s to reviews of singles in Rolling Stone — record labels are coming to grips with the loss of the album as their main product and chief moneymaker. In response, labels are re-examining everything from their marketing practices to their contracts. One result is that offers are cropping up for artists… to record only ring tones or a clutch of singles, according to talent managers and lawyers,” Leeds reports.

Leeds reports, “At the same time, the industry is straining to shore up the album as long as possible, in part by prodding listeners who buy one song to purchase the rest of a collection. Apple, in consultation with several labels, has been planning to offer iTunes users credit for songs they have already purchased if they then choose to buy the associated album in a certain period of time, according to people involved in the negotiations. (Under Apple’s current practice, customers who buy a song and then the related album effectively pay for the song twice).”

Leeds reports, “But some analysts say they doubt that such promotions can reverse the trend. ‘I think the album is going to die,’ said Aram Sinnreich, managing partner at Radar Research, a media consulting firm based in Los Angeles. ‘Consumers are listening to play lists,’ or mixes of single songs from an assortment of different artists. ‘Consumers who have had iPods since they were in the single digits are going to increasingly gravitate toward artists who embrace that.'”

“A decade ago, the music industry had all but stopped selling music in individual units. But now, four years after Apple introduced its iTunes service — selling singles for 99 cents apiece and full albums typically for $9.99 — individual songs account for roughly two-thirds of all music sales volume in the United States,” Leeds reports. “One of the biggest reasons for the shift, analysts say, is that consumers — empowered to cherry-pick — are forgoing album purchases after years of paying for complete CD’s with too few songs they like.”

Full article here.

Related articles:
WSJ: Music sales take sharp plunge – March 21, 2007
62% of music industry execs think eliminating DRM would increase music download sales – February 14, 2007
Disney film sales via Apple’s iTunes Store rise sharply; over 1.3 million sold in first three months – February 02, 2007
Apple’s iTunes Store passes two billion songs milestone; 50m TV shows & over 1.3m movies sold – January 09, 2007
Apple iTunes visits skyrocket 413% on Christmas Day – December 27, 2006
comScore: Apple iTunes sales are surging; revenue grew 84% during first 3 quarters of 2006 – December 14, 2006
Piper Jaffray: Apple iTunes Store sales show strong year-over-year growth – December 13, 2006
Warner’s Middlebronfman sees strong growth from iTunes Store sales – December 01, 2006

33 Comments

  1. It can’t happen soon enough. This should have already been done long before now. These dinosaurs (labels) need to realize that their world has changed, and it’s NEVER going back to the way it was no matter how much they wish it would…

  2. I’ve considered buying albums from itunes, but it just made no sense. The albums are almost always the full price of the individual songs. Why should I buy an album with 10 songs at 9.99 when I can just buy 1 or 2 songs and get the rest later if I want? I expected there to be a signifigant discount for buying all of the songs on an album and until that happens there is no point buying the entire album when I can just pick and choose the songs I like best.

  3. thetic Ruin,

    Yes, just last week, MDN wrote:

    MacDailyNews Take: Not to sound like a broken record, but when consumers have the ability to buy only the good tunes and are no longer forced to buy a CD full of filler crap, where’s the surprise in these numbers and trends? Hey, I like that song! Now it costs 99-cents instead of the $15 for the full CD of yesteryear. There’s a main reason for the sales decline. Here’s an idea: make more good songs and less bad ones (and stop with the DRM B.S. and think about upping the audio quality for legal online tracks while you’re at it) and you’ll probably sell more songs.WSJ: Music sales take sharp plunge

  4. I imagine I’m not alone in how I use iTMS. If I find an album I’m interested in I will click through the track previews. If I like what I hear of the album I’ll but it otherwise I’ll cherrypick just one or a few tracks.

    One answer is simply that the price of albums need to drop, especially in the UK where they’re too expensive. Leave the single price but make the album price more attractive and I’ll buy a lot more albums.

    The other answer is for artists to stop putting just one or two decent tracks on and then filling the rest with crap.

  5. Time for someone to whinge about The Death Of The Album Format!!! Queue Lars Ulrich!!!

    Hey, I have an idea… If you don’t want the album format to die, how about writing an ALBUM. You know, a collection of songs with a common theme to tie them together. Musical phrases intertwining in various movements to convey a unified idea, you know, an ALBUM! Try listening to Disintegration. Or how about Skylarking. Or hey, what about Dark Side of the Moon?
    Today’s ‘albums’ are slop buckets that just happen to hold most of the songs a band happened to write in the last year or so (or not). Show me some cohesion and direction and I’ll pay the whole 10 bucks. I promise!

    -c

    MW: ‘length’ (80 minutes. content – 6 minutes)

  6. I buy a lot of iTMS music so do my friends and this is what we have observed.

    We come across a artist somehow, usually by hearing a good song.

    We find out the best songs that others have downloaded and do so.

    After sometime if we really like them, we revisit the artist and buy more of their songs.

    If a artist makes consistently good music across all their albums, it will get purchased.

    The problem comes when artists create filler crap to fill up a album.

    We don’t want crap filler on our hard drives and iPods, nothing is more frustrating that listening to crap.

    So the problem is not ours, it’s the record labels forcing artists to fill a album.

  7. That’s great! Just the other day I was wishing that they did it that way because there was an album I was thinking of buying after already buying a single. Good to hear!

    However, sorry record execs, I don’t think it’ll help that much. The bottom line is, our culture is drastically being changed by technology and the internet. They’re creating new ways of getting information, and entertainment and companies in those areas need to be able to change with it. Network TV, for instance, is in a similar position. I love what podcasts are doing for content. TV or radio could never have supported a show about graphic design, or illustration, but there are dozens of quality podcasts available to those who are interested today. There’s no doubt about it, we are in the midst of a major cultural shift that will leave the old business models in ruins. The surviving companies will be the ones that recognize this quickly and find a way to fit in rather that fighting it.

  8. Big Deal.

    Back in the “day” as in early days of R&R, singles were the mainstay. Anyone my age remembers 45’s with a hit song on the A side and usually (but not always) a B side with junk. Albumns with some exceptions have always been just a few good songs mixed in with 6 or 7 pieces of junk no one really liked.

  9. Speaking as a certified old fart I have to say that I absolutely agree with @ChrissyOne, artistically speaking. (And not in any way implying that ChrissyOne is an old fart – Just me.)

    I think the pop music industry, as an industry, has had it pretty easy – namely, lot’s of middle men and women taking cumulatively large shares of the profits from the work that artists put out, and doing their respective middle-person parts to make artists hack together stuff that is supposed to keep the consumer coming back for more… Hence the one or two hit wonders per album that have been the ever frustrating norm for far too long.

    I personally want artists to make their money, and I gladly pay for music and movies that are worthwhile to/for me. Buying one piece of work at a time motivates me to buy more because I’m generally more happy, per-dollar-spent, with my purchases.

  10. How does one market an album like Like Jethro Tull’s Thick as a brick? Is it an album or just two songs? An album for 2×99= $1.98? Looking at the iTunes store you cannot buy one song. Its wither the whole album or nothing.

    The concept of an album, back then anyway, was more complicated than today. I for one will miss these concept albums…but then I am getting old and I have an attention span longer than 0.789 seconds.

  11. Occasionally you can come across an album that is a bargain. I downloaded an album of children’s music, 100 songs, for $9.99. When I see something like that, I go for it. Otherwise I stick to the one-at-a-time purchases.

  12. I can see the album dying, at least in terms of it being a collection of 10 or so songs. I would much rather an artist put together 5 or 6 decent songs, perhaps arranged around a theme, or tone, or whatever, and then release stuff more often. Personally I like the credit idea. I often try the odd song on iTunes because I don’t know enough about the artists work to take a plunge, especially with the volume of artists out there. Why spend money on a whole album when I might not like any of the rest of it, let alone all of it? If I could get credit then I would consider getting the rest. That said, I still prefer to get full albums on CD because of the quality. Bump up the bitrate and they may have something.

    Of course, I would like this idea since I mentioned it in a comment here ages ago. I’m not taking credit of course.

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