Atlantic Records crosses the threshold.
Since MP3s first became popular a decade ago, music industry executives have obsessed over this question: when would digital music revenue finally surpass compact disc sales?It actually took longer than I thought it would. The article wonders if Atlantic's news is an outlier, or a no-turning-back moment.
For Atlantic Records, the label that in years past has delivered artists like Ray Charles, John Coltrane and Led Zeppelin, that time, apparently, is now.
Atlantic, a unit of Warner Music Group, says it has reached a milestone that no other major record label has hit: more than half of its music sales in the United States are now from digital products, like downloads on iTunes and ring tones for cellphones.
[...]
In making that transition to a digital business, the music business has become immeasurably more complicated. Replacing compact disc sales are small bits of revenue from many sources: Atlantic Records’ digital sales include ring tones, ringbacks, satellite radio, iTunes sales and subscription services. At the same time, record labels — Atlantic included — are spending less money to market artists. In the pre-Internet days, said Ms. Greenwald, “we were so flush, we did everything in the name of promotion.” Among the cutbacks are less spending to produce videos and to support publicity tours when a new album is released.
The smart money is on the latter, I think.
