The release of a new Adele album rivals Apple (NASDAQ:AAPL) putting out a new iPhone when it comes to inducing public hysteria.
People spend months going over rumors, guessing at release dates, and then buy it the second it hits stores. It does not matter in either case whether the new one is pretty similar to the previous one, millions of people simply have to have it.
For Apple this model is impressive but not that stunning because people still buy smartphones. What Adele has accomplished in selling 2.43 million copies of her latest album 25, according to Billboard, is more impressive because she set a sales record in an era where buying music has become an anachronism.
Adele easily outsold Taylor Swift's first week of her megahit 1989 and she beat a record set by 'N Sync way back in 2000 (when the iPhone was still seven years away). It's an almost unthinkable debut at a time when the idea of owning music has faded in favor of paying for streaming services including Spotify and Apple's own Apple Music.
And, that may be why 25 sold so many copies. Adele and her management made the strategic decision to keep it off the major streaming services which allow users to pick which songs they hear. That means it's not on Spotify or Apple Music, but it is part of the rotation on Pandora (NYSE:P) which operates more like a customized radio station where users have no control over which specific songs they hear.
This sounds like a big problem for Apple and Spotify, but it isn't any more than Swift doing the same thing when 1989 came out.
Why is this not a problem?
Every time (and there have only been a few) a major artist pulls his or her new album from the major subscription-based, all-you-can-listen music services the media begins speculating on whether this is the beginning of a trend. It isn't simply because most artists lack even a fraction of the fan base commanded by Adele, Swift, or even Beyonce, to name three artists who have held albums back.
Smaller artists, which is pretty much the entire industry, simply don't have that kind of clout. And, the changing music business has made the album format less relevant. A band like Maroon 5 might generate a ton of radio play, ticket sales, and even singles sold, but it does not move albums.
The band's latest collection of pop dreck was released Sept. 2, 2014 and did not cross the million albums sold mark until the week ending July 30, 2015, Billboard reported. That's almost a year to reach a number which top bands used to reach in a few weeks and that's for a group whose lead singer appears on a top-rated TV show each week.
Most artists won't pull their new music from streaming services to sell more albums simply because that won't be the end result.
This won't hurt streaming
For years the Beatles kept their music off of iTunes and it was a news story but it did nothing to stop the move from physical album sales to digital. Adele's move won't be any different and it won't slow down the end of music ownership.
It's also worth noting that streaming service members aren't likely to leave just because a few albums they want are missing. Even if they have to buy a couple of records a year all-you-can-listen is still a very good deal and it would take Adele's actions becoming the norm for that to change, which is very unlikely.
That's backed up by Tyler Goldman, chief executive, North America, of music streaming company Deezer who told Reuters that Adele's actions won't have a material impact on streaming services much like Swift's did not.
"One individual artist is not going to change the inevitability of streaming," he said.
It's not going to be a trend
Streaming may not replace album sales as a revenue source for artists, but all but the top few won't have a choice. In most cases performers will want help and promotion from Apple Music, Spotify, and Pandora. All three of those services have the ability to put music in front of fans which ultimately controls whether an artist makes a living or not.
Adele chose to let Pandora stream songs from 25 not because of the money she gets paid by the radio-like service, but because it drives albums sales. For the vast majority of the rest of the industry, which won't be selling many albums anyway, streaming services drive exposure which leads to ticket sales, sponsorship, and a better chance of building a career.
Streaming may be a faulty business for artists, but it's where the industry is now and most acts won't be able to say no anymore than they can turn down doing free gigs for radio stations at Christmas time.
Adele did what was best for Adele, but it's not a strategy that will work for more than a handful of artists.
Daniel Kline owns shares of Apple. He's looking forward to the Paul Westerbeg/Juliana Hatfield album, which he will stream. The Motley Fool owns shares of and recommends Apple and Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.