Atlantic Records - Downloads provide 51% of revenue

[GA Russell]

Everyone said that it was only a matter of time, and now a major record label says that a majority of its revenue is derived from downloads and ringtones.

http://www.dailyadvance.com/business/digit...tic-261762.html

(NY Times article too long to cut and paste)

[The Magnificent Goldberg]

Interesting - thanks.

MG

[Claude]

Is this about the turnover or the profits from each format?

Because downloads have a much higher profit margin than CDs (no manufacturing costs, substantially lower distribution costs), I can imagine that they quickly generate more profits than CD sales, even if CDs are still by far the dominant format.

Edited November 26, 2008 by Claude

[GregK]

so, it seems the end is near. How long before they just dump CDs altogether

[Shrdlu]

Well it's been a long time since I bought a CD, and I have not bought many for a few years now.

[A Lark Ascending]

so, it seems the end is near. How long before they just dump CDs altogether

I don't think they'll exist five years from now...except for the equivalent of those companies who put out runs of vinyl for those who prefer that medium. I've gone over to (legal) downloads in 2008, only buying CDs if I can't find a download source.

[Guy Berger]

Is this about the turnover or the profits from each format?

Because downloads have a much higher profit margin than CDs (no manufacturing costs, substantially lower distribution costs), I can imagine that they quickly generate more profits than CD sales, even if CDs are still by far the dominant format.

Haven't read the article, but "revenues" would suggest cash flow rather than profits. In other words, if your logic is correct (and I am inclined to think it is), this means that 51% of profits preceded the current milestone.

Guy

[chewy-chew-chew-bean-benitez]

yea, well consdering the state of disrepair/disregard of their tape archives, maybe its all for the best- 'jaknow wot i mean mon?

[chewy-chew-chew-bean-benitez]

i miss the days when we could have atlantic-releated anomolies like these- happen: like this record-club only release from 1986!

1-9-8-6 people!

[Claude]

Is this about the turnover or the profits from each format?

Because downloads have a much higher profit margin than CDs (no manufacturing costs, substantially lower distribution costs), I can imagine that they quickly generate more profits than CD sales, even if CDs are still by far the dominant format.

Haven't read the article, but "revenues" would suggest cash flow rather than profits. In other words, if your logic is correct (and I am inclined to think it is), this means that 51% of profits preceded the current milestone.

The problem is that the articles are rather vague and even included fundamental errors.

This graph in the NYT says that downloads surpassed CD in terms of units sold, but in terms of value, downloads represent much less than CDs

I think the simple reason for this is that for downloads the unit is one track, as tracks can be bought individually. So it's no surprise that the number of usits is high, but that the value is much lower. They should divide the download units by 10 (average number of tracks on a CD) in order to compare both formats.

Edited November 27, 2008 by Claude

[The Magnificent Goldberg]

Is this about the turnover or the profits from each format?

Because downloads have a much higher profit margin than CDs (no manufacturing costs, substantially lower distribution costs), I can imagine that they quickly generate more profits than CD sales, even if CDs are still by far the dominant format.

Haven't read the article, but "revenues" would suggest cash flow rather than profits. In other words, if your logic is correct (and I am inclined to think it is), this means that 51% of profits preceded the current milestone.

The problem is that the articles are rather vague and even included fundamental errors.

This graph in the NYT says that downloads surpassed CD in terms of units sold, but in terms of value, downloads represent much less than CDs

I think the simple reason for this is that for downloads the unit is one track, as tracks can be bought individually. So it's no surprise that the number of usits is high, but that the value is much lower. They should divide the download units by 10 (average number of tracks on a CD) in order to compare both formats.

The other thing is, what are they counting, geographically? Physical unit counts will be sales in the US. Downloads could be from anywhere in the world.

MG