Week of January 5, 2009

Arbitron's PPM Settlement

Friday, January 9, 2009

The announcement on Wednesday that Arbitron has settled its disputes with the Attorneys general of New York and New Jersey brings with it a number of changes in the PPM methodology and follow through. There are 3 key elements from the stations' perspective:

1. Arbitron will use the address-based sampling technique for 15% of its recruitment efforts in New York by July 2010 and in Philly by January 2011.

2. They will increase the sample target for persons residing in cell-phone-only households to 15% of the total New York sample target by July 2010 and of the total Philly sample target by January 2011.

3. Arbitron will take all reasonable measures to achieve average in-tab rates of at least 75% for all age/sex and race/ethnicity demographic groups by April 1, and to ensure that subcategories comprising 10% or more of the New York metro population fall within 90% of the overall 75% target. Furthermore, Arbitron will provide to subscribers monthly reports detailing the PPM installed and in-tab sample sizes by individual zip code in the New York market.

It's important to note that these agreements apply only to New York and Philadelphia. In fact, if Arbitron does not receive MRC accreditation for the PPM (by October 15th of this year in New York and Dec 31st in Philadelphia), the AGs reserve the right to rescind the settlement and reinstitute their lawsuits.

What remains to be seen is if Arbitron will also implement these changes anytime soon in the other 12 PPM markets.

(DRM) Free At Last

Thursday, January 8, 2009

The big news out of the Macworld Expo was that iTunes will soon be DRM free. Apple reached agreements with the 3 remaining majors (EMI had already agreed to go DRM free) to provide DRM free music in exchange for tiered pricing. The 99¢ one-size-fits-all policy will change, with songs priced at 69¢, 99¢ and $1.29. All of these changes are to go into effect by this Spring.

However, one other change has received less attention. That's the fact that consumers who have already purchased songs with DRM will have to pay 30¢ per track to get the new DRM-free versions. With 6 billion songs already having been purchased from iTunes, that's another potential $1.8 billion in revenue for the music industry.

New RIAA Strategy

Wednesday, January 7, 2009

Somewhat lost in the year end shut-down was the news that the RIAA has changed its strategy with respect to digital piracy. In late December the music industry group announced that it was going to stop suing illegal downloaders, instead working with ISPs to track illegal activity and get the ISPs to pressure illegal users to stop by threatening a "reduction of service." Another indication of the change of strategy came with the RIAA's decision to drop their evidence-gathering company, Mediasentry, whose tactics had sometimes created even more ill will for the industry.

Over the last few years over 35,000 people have been sued by the RIAA. Announcing that it will stop filing the suits should help rehabilitate the industry's image. Opinions vary on the effectiveness of the lawsuits, but with music revenues dropping for the 8th straight year in 2008, it's clear that the best that can be said is that it slowed the steady decline.

The Year in Music, Part 2

Tuesday, January 6, 2009

As mentioned yesterday, in 2008, for the first time since the advent of SoundScan, the top-selling album of the year did not sell as many as 3 million copies. Here are the top 5 selling albums for 2008:

1. Lil Wayne - "Tha Carter III" - 2.87 million

2. Coldplay - "Viva La Vida" - 2.14 million

3. Taylor Swift - "Fearless" - 2.11 million

4. Kid Rock - "Rock 'n Roll Jesus" - 2 million

362 million physical CDs were sold in 2008, with about 2/3 of those sales coming from big box stores like Wal-Mart (which had an exclusive on the AC/DC album) and Best Buy.

The Year in Music: Over 1 Billion Served

Monday, January 5, 2009

The music industry can teach the rest of the economy a thing or two about big drops in business. 2008 was another down year for the industry. The top line news is that album sales were off, while digital single sales continued to climb. Here's an overview of some of the numbers:

* Sales of physical CDs dropped by more than 19% (the 7th drop in the last 8 years) to just over 362 million units.

* Physical CDs made up 84% of all album sales, down from 90% in 2007

* Digital singles sales were up 27% from 2007, to just over 1 billion