On The Subject Of Record Sales

record store

Taylor Swift’s “Red” sold 1.2 million copies in the first week in 2012. Eminem’s “The Eminem Show” sold 1.3 back in 2002 while Britney Spears’ “Oops…I Did It Again” sold a whopping 1.3 million copies back in 2000.

These are very impressive numbers. It also means that every one of these albums I’ve mentioned has gone platinum by virtue of having sold a million or more.

So does this mean that in one week 1.2 million people bought Taylor Swift’s album last year? Or that 1.3 million people bought Eminem’s album or Britney Spears’ album?

No. It doesn’t mean that at all. Stay with me here and I’ll explain.

What this means that every store in the nation that sells records, be they the mom & pop’s or the independents or the chain stores collectively bought that many units of that artists’ album to sell in their stores.

Before any of you cry “foul” I’ll take the time to point out that this is the way it’s always been with how the record companies do business and they make no distinction between a store or a fan buying thousands of records or one record.

Nor should they. A sale is a sale.

In some circles the practice is derided as “Hollywood accounting” and isn’t an accurate reflection on how well an artists’ album is really selling with the fans. I personally don’t have a problem with it as I agree, in principle, that it doesn’t make much difference where the money from the sale is coming from.

A sale’s a sale.

So how about iTunes?

Well, that’s a more honest approach and an accurate picture. The record company turns over one master to iTunes for licensing and the numbers that come back on it reflect the true number of sales by the number of downloads on that album, which is why Jay-Z’s “Magna Carta Holy Grail” went platinum almost immediately (I cite this as an example as I’m currently listening to it – and it’s great!).

The only problem I have with this is that the record companies still treat digital downloads as if they were physical sales and therefore pay less royalties than licensing where only one master is turned over for unlimited sales.

Sister Sledge, a group whose hey-day was prior to the conception of iTunes, is currently battling Warner Music over what is the most contentious issue in the music industry.

Songwriters, as Sister Sledge’s argument goes,  typically make much less money when an album is “sold” than they do when their music is “licensed” (the rationale derives from the costs that used to be associated with the physical production of records). But record labels have taken the position that music sold via such digital stores as iTunes should be counted as “sales” rather than licenses.

The difference in revenue is like night and day and Sister Sledge has brought an all-out, no-holds barred class action lawsuit against Warner. They also allege Warner has improperly kept revenue from “reserves,” which is money withheld to offset losses related to unsold records.

Before iTunes, any records that didn’t sell in the stores were bought back from the record company they came from. This money is offset from what the artist gets paid in the event records aren’t sold.

As Sister Sledge points out: there’s no such thing as unsold inventory in a digital universe.

As for Taylor Swift’s album “Red”, she sold 566,000 copies on iTunes worldwide. That’s impressive but it’s not anywhere near 1.2 million – and closer to the truth.

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