As a recording that has sold modestly, but in an array of forms, Akonâ€™s music illustrates the new definition of a hit in pop music â€” instead of racking up sales of half a million CDâ€™s or more in the first week, it arrives with solid if less impressive sales, but with several revenue streams.
It is an example of the business model that the retrenching music industry is embracing as sales of the CD, its mainstay product for two decades, slowly decay.
As a result, the big record companies, whose fortunes are still overwhelmingly tied to CD sales, are taking a far more expansive view of how to carve out pieces of the music economy, which by some estimates runs as high as $75 billion, including recording sales, music publishing, concert ticket and merchandise sales and other sources of revenue.
Lately, the major labels have in effect tried to move into the talent management business by demanding that new artists seeking record contracts give their label a cut of concert earnings or T-shirt and merchandise revenue â€” areas that had once been outside the labelsâ€™ bailiwick.
[…] CD sales are still the single biggest source of revenue, and the picture there is mixed. The EMI Group of Britain, third largest of the four major record corporations, said in reporting its half-year results in November that recorded-music sales declined more than 5 percent, though a drop in CD sales and net prices had been â€œslightlyâ€ offset by digital revenue. The Warner Music Group, the No. 4 company, said that over all, recorded music sales for the fiscal year rose almost 3 percent, to $3 billion, and that digital revenue had more than offset the drop from CDâ€™s.
Yet digital song sales are not fueling a recovery as quickly as some thought â€” in fact, sales have been sputtering. After rising 150 percent last year, sales of digital downloads have increased less than half as much this year.
[…] To show the promise of digital sales for individual albums, Warner Music executives provided cost-analysis data from a successful hip-hop record released in the last 12 months. The information was disclosed on condition that the performer not be identified in The New York Times.
According to the data, sales of the CD accounted for roughly 74 percent of domestic revenue the company took in from the project, or roughly $17 million. But sales of an array of digital products added almost $6 million â€” about two-thirds of that came from ring tones of hit singles. The figure also included roughly $330,000 from mobile phone games related to the performer and $94,000 in sales of cellphone â€œwallpaper,â€ or screen backgrounds.