Fist pumps for Foster the People! The L.A. indie band earned its very first RIAA Gold award July 20 for their catchy summer song “Pumped Up Kicks,” selling more than 500,000 digital downloads since its March release. In addition to earning the Columbia Records rockers their first Gold certification, the track’s popularity has paved the way for “Torches,” the band’s May debut album, to top fans’ wish lists this season. Visit fosterthepeople.com to learn when the band may be coming to a city near you soon.
And in case you missed it, the RIAA recently congratulated a number of country artists and additional first time G&P recipients, plus awarded 2Pac a Diamond award (10x multi-Platinum) for his “Greatest Hits” album. Check out those sizzling summer G&P certs here.
There’s often a curious Groundhog Day-like quality to the debate over the PROTECT IP legislation. Many of the arguments rolled out in opposition to the bill –- narrow and targeted legislation exclusively focused on overseas rogue websites trafficking in copyrighted works and products and impervious to U.S. law -- seem quite, well, familiar.
Several leading venture capitalists recently wrote a letter criticizing the bill, outlining a concern that the legislation would “stifle investment in Internet services, throttle innovation, and hurt American competitiveness.” Other venture capitalists have similarly predicted that the bill will “substantially increase the risk of investing in an already risky sector.”
Fair enough. As an industry that is both dependent upon investment in digital innovation and who now earns roughly half of its revenues from various digital business models, we too would be worried about any policy proposal that threatens to undermine our digital music partners and the progress we’ve achieved so far. Just think: in the last two months, we’ve seen the U.S. launch of Spotify and Apple’s iCloud music service and the historic IPO of Pandora. We have a deep respect and admiration for America’s leading technology entrepreneurs.
The problem is that these arguments are frequently recycled, and, in the most high-profile recent example, proved to be wrong. Back in 2005, as we debated the upcoming momentous MGM vs. Grokster Supreme Court case, groups including the National Venture Capital Association warned that an adverse decision:
“…would have a devastating impact on the development of legitimate and valuable new products and services for consumers.”
“…would compound the technical, financial, and legal risks that emerging technology companies already face, thus stifling innovation, causing disastrous consequences for those companies, and ultimately damaging the public interest.”
“…will reduce innovation and investment in the Internet and, perversely, hamper the most robust forum for the dissemination of copyrighted works.”
What actually happened? The Supreme Court ruled 9-0 in the favor of the creative industries and that bad actors like Grokster who facilitate and encourage illegal downloading can be held accountable. And since that unanimous decision:
• Venture capital investment grew for Media and Entertainment to 7.1% of total VC dollars (from just 4.6% in the four years prior to Grokster). According to one report, nearly $400 million has been invested in music startups in 2011 so far!
• Licensed music services grew to more than 400 in 2009, from less than 50 in 2003
• Legal digital music market grew from less than $200 million in 2004 to over $3 billion in 2010
What’s the moral of this story? Strong, measured intellectual property laws and enforcement can help spur -- not stifle -- innovation. And while Chicken Little arguments might raise eyebrows, we have yet to see the sky fall.
It’s not a story lost on Senators. Last week, Ben Cardin (D-Md.) was the latest Senator to throw his weight behind the PROTECT IP Act. With Senator Cardin’s support, the number of co-sponsors of this highly bipartisan legislation has now reached 25 and counting.
It’s hard to see why a quarter of the U.S. Senate wouldn’t support a bill that protects consumers by shutting down access to illicit sites that profit from the unauthorized sale of American products. Rogue sites who primarily traffic in counterfeit pharmaceuticals, airplane parts, sportswear, music and many other U.S. goods will be the losers if this legislation comes to pass. Which we can all agree would hardly be a bad thing.
Is PROTECT IP perfect? No, and we’ve added our voice to the ongoing dialogue over a few of its provisions. But a lot of the criticism is smoke and mirrors, and one thing is certain – with its clearly designed goal of protecting American consumers and businesses, we cannot lose sight of the forest for the trees. Because ultimately what this is about is strengthening the legitimate marketplace by providing incentives for users to get their content legally and for American creators to continue creating the best content in the world. Which we can all agree would be a great thing.
Jonathan Lamy, Senior Vice President, Communications, RIAA
As we enter the second half of 2011, a look back at U.S. music sales for the first six months of the year reveals several upward online sales trends and significant mileposts in the digital marketplace’s ongoing evolution.
According to Nielsen SoundScan, overall sales volumes at midyear are up 3.6 percent (as measured by “TEA” counting ten tracks as one album plus overall album sales) versus the first half of 2010. While physical album sales are down six percent, digital albums are one of the strongest growing segments of the market, up a noteworthy 19 percent versus the prior year with more than 50 million digital albums sold. In addition, individual digital track sales exceeded 650 million in the first half of 2011 and grew 11 percent year-over-year.
So what music have fans purchased online? A bit of everything. According to SoundScan current releases, catalog material, and even deep catalog digital album sales were all up by double digits for the first half of 2011.
Just last week we witnessed Eminem make history: his “Recovery” album became the first ever to sell one million digital copies. Not far behind, both Lady Gaga’s “The Fame” and Adele’s “21” are closely approaching one million download sales each. Nine other albums have crossed the 500,000 digital copies sold threshold as well.
Looking at digital tracks, 52 different songs have sold more than one million copies so far in 2011. Of those, 13 songs have surpassed two million sold, two others have sold three million, and two more – Katy Perry’s “E.T.” and Adele’s “Rolling In The Deep”– have hit four million downloads to become the best selling tracks thus far this year.
To boot, the RIAA certified a record 209 digital single certifications in the first half of 2011 – compared to 313 total in all of 2010 – as part of its historic Gold & Platinum Certification program. 2011’s – and history’s – highest digital single certifications at 6x multi-Platinum are Flo Rida’s “Low,” Lady Gaga’s “Just Dance,” and the Black Eyed Peas’ “I Gotta Feeling.”
What’s our midyear takeaway? We’ve obviously seen better sales figures so far this year than in a while. It’s encouraging, though we’re still an industry that is hard hit by digital theft and less than half the size it was ten years ago. There’s probably no one single reason, but we’d like to think that enhanced marketing efforts – like the sale of music at nontraditional outlets – and anti-piracy successes like the closure of LimeWire have helped.
There’s no doubt that music’s appeal is as high as ever and that fans today have access to more legal music than ever before. Still our job remains to keep that legal access growing at a pace equal to or better than the proliferation of illegal P2P, storage locker, streaming and other rogue sites that operate without any compensation or respect for the music community and those left working in it.
In short, no jumping for joy - a cautious thumbs up.
Joshua P. Friedlander, Vice President, Research and Strategic Analysis, RIAA