Net Neutrality Updates and Nielsen Music 2014 Sales Report News, January 4, 2014

Net Neutrality Updates and Nielsen Music 2014 Sales Report News, January 4, 2014

Federal regulators said they will vote on net neutrality in February. And Nielsen’s annual end-of-year music sales report showed that streaming music services are still not killing the music industry.


On Stage - Music Business News - Musician Coaching


FCC Voting on Net Neutrality Rules Next Month


Top telcom regulator Tom Wheeler of the Federal Communications Commission (FCC) told commissioners late last month that new net neutrality rules will be introduced and voted on in February, revealed The Washington Post. This decision will dictate how Internet service providers handle content – including music and other forms of entertainment – flowing across their high-speed networks.


According to an unnamed federal regulator, Wheeler told other commissioners he would be sending a preliminary proposal outlining rules in February with the intention of approving it in just a few weeks. The rules established, if approved, will keep broadband providers from speeding up or slowing down certain websites and could affect the prices users pay for online entertainment, news and other content.


President Obama asked the FCC to make Internet service providers follow the same regulations established for telephone companies 80 years ago: Title II of the Communications Act. Industry advocates want to protect the concept of net neutrality, the idea that everyone who has an Internet connection should get equal access to all online content: music; email; photos; social networks; maps; video.


While FCC spokesperson Kim Hart would not comment on the exact details of the upcoming deliberations, she confirmed they would begin in February. Analysts still cannot speculate what will be in Wheeler’s plan. However, those close to the FCC claimed that there has been recent discussion of imposing stricter regulations than originally planned.


The FCC has its scheduled monthly meeting on February 26. The organization will likely be in for a fight with Congress over net neutrality, as Republican lawmakers are preparing to present legislation this month that could go against potential FCC rulings.


Nielsen Music’s End-of-Year Report: Streaming is Not the Enemy


Declines in sales of CDs and downloads were the focus of Nielsen Music’s 2014 report on sales in the music industry, said Billboard. However, the recorded music business looks much healthier once gains in streaming are analyzed, indicating that streaming could be helping it rebound after a slow, steady decline in the Digital Age.


Total album sales fell 11.2 percent, according to Nielsen Music. And Track sales dropped 12.5 percent, down 17.5 percent from their high in 2012. Vinyl has been making a comeback with a sales increase of 51.8 percent, although this only made up 3.6 percent of album sales.


Billboard pointed out six observations that provide a deeper look into the U.S. music business and pointed out that not all genres are changing at the same rate or at the same time and streaming is definitely still the area of the music industry to watch.


First of all, straight purchase amounts do not tell the entire story, said Billboard. On-demand streaming was up 54 percent to 164 billion songs, an increase of 57.5 billion tracks. This boom is the same as if album sales had gone up 56.1 million units, thus negating the decline in other areas of the market.


And streaming actually grew more than Nielsein Music reported last year, as Pandora and Sirius XM’s streams are not tracked by the company. In the 12 months that ended September 30, Pandora provided royalties to rights holders that equaled about 16.3 million album sales.


Billboard also noted the gigantic impact Taylor Swift’s shift to pop from country had on both genres’ sales in 2014. In fact, the .1-percent increase in pop album sales can be attributed directly to 1989, which was the top album of 2014 and was classified by SoundScan as pop. Thus, it was Swift who helped make pop the only major genre to see an increase in album sales last year. Swift likely prevented pop album sales from dropping 10.6 percent and may have also contributed to a decline in country music sales because of her departure from the genre.


2014 also showed that rock is still faring well as a genre. It was the only other major genre besides pop that had a decline under the decline of the overall industry. The hard rock sub-genre was the standout, with a decline of just 5.1 percent.


R&B and hip hop were the genres most hit by a drop in sales in 2014. The total percentage of decline across formats was double the decline for overall sales in the industry. Still, R&B and hip hop were and continue to be popular on streaming sites, with increases of 54 percent in that area.


Billboard also noted that country and Latin music – the two genres that were among the last to thrive in the digital world – are “among the last to abandon the format.” Country digital album sales were down 7.8 percent, whereas Latin digital album sales were down 2.8 percent. Fans in both genres were very late to adopt digital downloads. And CDs in both genres are still selling compared to CDs in other genres. Country CD sales made up 69.1 percent of overall sales in the genre and Latin made up 81 percent of total sales in the genre.


Sales figures from last year also showed just how powerful Pharrell’s song “Happy” was. The single sold 6.41 million tracks, 3.3 percent more than the top song of 2013, Robin Thicke’s “Blurred Lines.”