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I'm reposting this from the IDM list - Thor from Highpoint Lowlife talking about the current state of the music industry. There are no real surprises in here, but it has me thinking a lot about this music and what comes next for electronic music in general and Emulsion in particular.
From: thorsten AT NOSPAM highpointlowlife.com
Date: January 8, 2007 6:45:21 AM CST
Subject: Re: [idm] CD sales and the music industry
To: idm AT NOSPAM hyperreal.org
>wow, this is nice. To bad this cd is only available from overseas(I live in the US). To >much money. I would buy this if I could purchase from a US distributor. Very >surprised with this.
Which part are you surprised about? That its only available in the UK, or the exchange rate?
I wish i could help you out and say you can get it somewhere - but basically no you can't - 2007 is year the arse falls out of the music industry. No-one is interested in buying music anymore, and especially not electronic music. An electronic label to a distributor is a joke - They'd never sell more than 5 copies of yer release, so they wont even consider you.
That quote from Norman Records that Alan posted is a good indication of it, but basically sales of CDs stopped dead about 6 months ago. (i think a strong influence in why Smallfish records also closed)
Electronic music has been unfashionable for a good few years now, and i think its going to be one of the first hit areas which will feel the effects the worse. Its only at the top end of the popular music spectrum, that mainstream people are still buying CDs. Even people like us, who still buy CDs - i bet at most you can afford maybe 5 CDs a month (being optimistic here), and yet, theres like maybe somewhere between 50-100 decent electronic releases a week! So yeah, even if you bought 5 cds, thats still at least 195 that you didnt. Who supports those labels and artist?
At the beginning of 2006 i was getting quite confident about Highpoint Lowlife, we were doing pretty well in sales, and getting good press and reviews. Somewhere during the summer tho - sales just completely stopped, and every month since then we've been getting lots of returns from record stores which has just continued since then.
Our reviews and press have kept picking up since then, but sales are just gone. zilch.
i have one more release planned for Highpoint Lowlife, but beyond that, who knows what will happen, its just not feasible to run a label the same was it has been done - i.e. relying on CD sales. I have so much debt from the label, that i need to start paying that back.
What is interesting to compare though - what i think will happen, is that niche releases and handmade efforts are what will continue.
To compare economics of normal releases -
In the past, doing a run of 1000 CDs, which has been pretty standard - total cost for producing that runs to about £1500, including mastering, replication and promotion. If you only sell about 200 of them (and thats if you're doing really well!), and you only get abour £3 per disc (from your distributor), then you've covered £600. You've sent out about 100 promos, so that means your bedroom now has an additional 700 CD sitting around which will never sell, oh and you're also about £900 out! excellent fun.
Now, compare that to the limited run of 100 DVD-Rs we did recently -
That whole project cost about £200 for materials, the blank DVD-Rs, the cases, tracing paper for the artwork and the photocopying. They sold out pretty much straight away, on average for maybe £4 (£5 direct sales, but i sold a lot to Norman records for £3), and thats £400 in sales, so around £200 profit within a month! It just seems crazy, why didnt i start that years ago??!! 
I just saw this article this morning link
It's a pretty accurate predictions article for the music industry in 2007, and ties in very much which what i've been seeing.
Digital download sales are going okay, but they're very much a novelty i think, and used more by people with a conscience rather than normal consumers. They certainly dont make up for the hit in lost CD sales.
hope that doesnt sound all too gloomy gus! Big changes afoot, and in the end I don't think the music fan or the musicians will suffer, but we're in the middle of a massive watershed, and things will be radically changed in even a few years time..
thor
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01/08/07
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colin
i think it sounds great... the sooner things fall apart completly, the sooner a format we havnt anticipated wil dominate :D -- idealy anyway.
in anycase i think its good for homebrew creativity, like it says, strange multimedia projects that are in contrast with the norml cd-package will prolly find some following ... and i think as this whole digital culture crap seeps into mass consiousness the restrained forms of electronic music we all love will become a bit more well known
01/08/07
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soft
it all seems a bit dystopic to me.
some labels seem to be doing ok. audiobulb for example.
01/08/07
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cloudscapes
I don't agree with all the points that were brought up. For one thing, the 50-100 good releases a week thing is a bit flawed, as not everyone has the same definition of good. One niche of people might buy the 1-40 releases, another niche the 30 to 70, and another the 60 to 100. There are also slow months with far fewer releases. Good opportunity to buy odler records.
Anyways.
I live in a city where homebrew CDs, CDRs and casettes (even vinyl) are being sold and passed around quite a lot! It's not really slowing down either. I also know a TON of people (both in real life and online) who would much rather buy physical media (CD/vinyl) rather than individual MP3s or download an album. I think that part of what was mentioend is true, that the bigger part of the music industry is due to fall hard on its ass, but that's also the part that sells top-50 pop music and can only get its artists to produce two or three "good" tunes on a whole album, radio hits. This is the part that'S going to fall I think. Downloadable content won't dissapear, but I think there will still be enough fans of physical media to keep on producing stuff (sometimes at their expense).
01/08/07
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airliner
a lot of the people who continue to buy physical media are the people who are used to having it. but there's a generation of kids right now who have never known a world without p2p filesharing and the itunes store. they're not going to start buying CDs when they're old enough to have their own paycheck, and anyone who wants to keep selling music in physical form is gonna have to deal with that eventually.
01/08/07
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filarion
i think that's overly pessimistic as well. first off, 1500 quid for a run of 1000 CDs sounds ludicrous from where I'm standing. my calculation based on prices in .de: about 600 Euro for production, add maybe 2-300 for mastering and another 200 for promotion. that's about half of the price he mentions..and you can save another 100-150 if you only get 500 printed, which makes sense if you're only selling 200 to begin with ;)
well, i guess i'll know these things firsthand in about a years time and give my comments on the issue :p
01/08/07
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papergoose
the knife got pitchfork's album of the year.
01/08/07
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airliner
big label albums are coming out almost that quick too, just not legally (see: oink, slsk, etc).
interesting times.
01/08/07
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deltasleep
"theres like maybe somewhere between 50-100 decent electronic releases a week!"
Wow I haven't heard an electronic record I liked from an artist I was unfamiliar with in almost a decade. The whole class of music has been in the doldrums for the better part of 5 years now. It's like I've heard the same meaningless electronic record now almost as many times as I've heard the same meaningless emo record.
It's an interesting time to be watching the industry, but I think I'll just be giving my album away. The way I see it, more people hear it that way, which is what I want. If I want $200 that bad, I'll pick up some weekend work.
01/08/07
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jdg
there's just too many goddamned ppl, its that simple.
01/08/07
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mookid
Some odd coments in the original post.
Firstly 'electronica' seems to be at an all time peak, what with many mainstream pop-acts emulating/covering the usual suspects from the 80's. Plus the fact that electronic music can be created by anyone these days, I hardly see it as a 'un-fashionable' classification. Sure alot of the kids are listening to rock music, but electronic music is bleeding heavily into the genre.
I don't think that anyone with good judgement should see the current state of digital download compared to hard-copy purchasing as a 'novelty' or fad. Digital music is far easier to purchase and distribute than bulky and expensive CD's. I for one much prefer to browse and preview music on iTunes than rummage through CD covers in a high-street shop. I've bought and acquired music I would never had considered otherwise if it were not for digital downloads.
I have not considered doing a CD run for many years as I consider it to be an expensive excercise with little promise of getting any return, let-alone breaking even.
I think the watershed has already been and gone. The commercial labels are losing revenue, sure, but the independents and small-time artists are winning. Okay, music isn't going to be the big buck industry it has been for the past 50 years, but I think more importantly the channels for good artistry are going to be better than ever.
01/08/07
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jdg
i still think the idea of vinyl+mp3 is a great one.
i dunno if it'll work for electronic music.. but the indy rock croud is doing OK with this.
01/08/07
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damon
bleep seems to be doing quite well... no?
01/08/07
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room
if the quality of the music is good enough (i.e. excellent)
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the promo - live gigs + radio, reviews and interviews good enough
you can sell enough to break even and maybe a little more
01/08/07
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utofbu
oversaturation of the genre is the thing. you are totally right jdg. Youtube generation shit. And to think I had been formally studying composition only to find that oversaturation is the nature of modern popular art and death is the only cure for a formalist.
Write for yourself and proceed to propagate your humble vision I say.
Good luck to all who want to live doing this. I wouldnt trade it for shit.
01/08/07
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kucharo
jdg is correct, there are too many people. However, I don't think that's going to stop. What do you do when everyone is making music in their spare time? Will the cream rise to the surface or will it simply evaporate into the overall? Let's face it, a typical listener is either limited in their scope or very fickle. Sometimes both. The endless cycle of trends will never cease.
What is going to change is how much money can be made doing music fulltime or even parttime. The era of the multimillionaire musician is rapidly approaching a end. Much like the rest of the business world, money is consolidating around a few extremely well off people at the very top, a reasonably well off middle and a huge number of people with nothing at all. Musicians who are not The Rolling Stones will just have to be more creative about how they put out material in face of ever dwindling monetary rewards. I'd like to think that ultimately this will raise the bar for music quality, but will anyone care to listen?
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