EMI Says Dropping DRM Showing Good Initial Results, But Questions Emerge
Bloomberg News has an article in which an EMI SVP said, "The initial results of DRM-free music are good." Increased sales of Pink Floyd's Dark Side of the Moon were singled out. That's true. Digital sales of Dark Side of the Moon have averaged over 3,600 units since the launch of iTunes Plus and the availability of unprotected AAC files. In the 11 prior weeks, average sales were 830 units per week. That's an increase of 272%. In the week iTunes Plus was released, digital sales of Dark Side of the Moon jumped 350% that week alone. (iTunes Plus, which enables users to upgrade tracks to unprotected AAC from the older, protected AAC versions for $0.30 per track, lauched May 30th.)
Here's the main question: Does an upgrade using iTunes Plus count as a scan? I can't find out. If that's the case, the increase in sales will actually a temporary thing. Once people who want to upgrade their tracks have done so, sales should drop and level off at pre-iTunes Plus levels (or, as EMI is hoping, above pre-launch numbers). My gut tells me SoundScan counts an upgrade as a sale. Those Pink Floyd numbers look to be more indicative of a technology-enabled sales jump than they are a sign of support for DRM-free downloads.
What about other albums? Digital sales in the last two weeks for Smashing Pumpkins' Siamese Dream rose 17% versus the 11 prior weeks' average. Norah Jones' Come Away With Me jumped nearly 24%. OK Go's Oh No increased 77%. Coldplay's A Rush Of Blood To The Head jumped 115%.
Those are just digital album sales I'm talking about. But here's something very interesting: CD sales of four of those five titles dropped sharply over the same period. CD sales of OK Go's Oh No dropped 45%. CD sales of Coldplay's A Rush Of Blood To The Head dropped 24%. Norah Jones' Come Away With Me fell nearly 33%. Pink Floyd's Dark Side of the Moon is down only 12%. Smashing Pumpkins' Siamese Dream increased almost 15% -- probably the result of the band's new single and upcoming album hype.
Normally I wouldn't think much of a two-week drop at the end of a 13-week period. A few more weeks are needed to see the entire story. But in this case there's an obvious pattern. It's not just one title.
Do I have an explanation? Not a good one. The most likely scenario is one in which iTunes Plus -- and the emergence of higher quality, DRM-free downloads -- has somehow accelerated the CD-for-digital substitution that has eroded CD sales.
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