Maybe the music industry isn't dead after all.
Nielsen SoundScan reported last week that 155.5 million albums were sold in this country during the first half of the year, a 1% increase from the 153.9 million albums that were bought last year at this point.
It may not be much of an advance, but it's the first uptick the industry has seen in seven years. Industry sales peaked in 1999. Sales have fallen every single year with the exception of 2004, and that was primarily the byproduct of a brutal 2003, since 2004 sales were well short of 2002.
Before you run out and snap up shares of a profitless Warner Music Group
We're talking about album units here, and there has been a lot of promotional activity on that front this year. In other words, it wouldn't surprise me to see that the average album is selling for far less than it did in 2004, and not just because album downloads typically set music fans back less than $10 apiece.
It's Amazon and Best Buy that took the subsidized hits. Labels didn't necessarily suffer. However, it may not be fair to consider this organic demand given the low consumer-facing prices.
It's not all that bad to have lower prices on digital music. Margins are huge on downloads. Even the mighty Apple
Digital delivery is awesome, but it also narrows the playing field. Major label releases will naturally have the greater traction, but the Internet has made any aspiring artist's demo a mere mouse click away.
Direct sales and ad-sharing revenue from Google's
The future isn't necessarily rosy, but I didn't want to close on a sour note. Piracy sites are starting to shut down, and things are also improving in overseas markets.
Google stood out in China three years ago, embracing a legal digital-music service when labels were litigiously eyeing the rampant MP3 file searches available through Baidu
Our appetite for music consumption isn't going away, and the incremental revenue streams through new distribution channels continue to gain in popularity.
Is the music industry bouncing back, or is this just a blip? Share your thoughts in the comments box below.
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Longtime Fool contributor Rick Munarriz once had his band signed to Sony's Columbia Records label. It didn't exactly pan out. He owns no shares in any of the stocks in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Motley Fool has a disclosure policy.