Top ten digital stores: where do people actually download classical music?

According to the Nielsen mid-year report, record sales in the US are up for the first time since 2004. That’s obviously great news for musicians and labels, but it’s also good for the record-buying public – more sales means more recordings to choose from.

CD sales for the first half of 2011 are actually a bit lower than in the first half of 2010. The growth has come from an 11% increase in digital downloads. Where are people buying all this music? It’s not easy to find out. I looked around online and found a lot of stories about where people can download classical music, but not much about where people actually do download classical music. “That’s ok,” I thought. “We must have that information.” I went digging in our royalty reports.

Here’s a graph of our digital sales for the whole of last year. I’m using a full year’s worth of data because different stores report their sales to us at different intervals. In each case, I’m counting wholesale revenue because that’s the thing we can most consistently measure. The chart shows sales for Naxos, but I’ve looked at the data for the other labels we distribute, and the overall picture is very similar:

Naxos Digital Sales 2010

1) iTunes is #1, and has been since shortly after its launch in 2003. With 225 million users, and just about every recording under the sun, it has become the one-stop-shop of choice for many downloaders. Some critics complain about the search engine and the sound quality. I never saw the problem when I worked there, and it seems like customers agree: if you exclude the streaming services (which are a bit different), iTunes sells more classical downloads than all the other stores put together.

2) At #2, we have Naxos Music Library, which offers a streaming subscription service to universities, libraries and music professionals. It’s one of three specialist classical streaming services in the top ten, and it’s very popular. Ask about it next time you’re in the library – you might already have access (half of all American college students do). You don’t have to be in the library to listen, it’s free to use (the library pays for it), and it even works on iPhones and Android devices. If you piled up all the CDs on Naxos Music Library, they would form a stack 1,400 feet high – that’s taller than the Empire State Building.

3) The third most popular online destination is Amazon’s MP3 store. Amazon is also a very popular place to buy our CDs – great news if you prefer a product you can hold, because Amazon keeps growing and with almost infinite shelf space, we expect all our CDs to be available here for years to come.

4) At #4 is the most popular specialist classical download store, ClassicsOnline. It’s run by Naxos, and it sells classical music from almost all independent labels. If you can’t wait for your local library to get a Naxos Music Library subscription, you can also listen to an even larger selection of full-length recordings on ClassicsOnline for a monthly fee.

5) Next comes EMusic, offering a great many bargains in jazz, rock, and pop as well as classical music for indie music fans. Customers commit to purchase a monthly download allowance which doesn’t roll over, so this store works best if you regularly purchase indie music from all genres.

6) & 7) Rhapsody (#6) and Napster (#7) have been around for along time. They both let you to listen to huge collections of music for a monthly fee. Rhapsody has grown a bit lately, but Napster isn’t as popular as it once was. Neither was really designed for classical music, but they still deliver more classical music to customers than all but two of the specialist classical sites.

8) The new kid on the block is Spotify. This Swedish company made waves in Europe with a free service that allowed users to listen to a lot of music and a few adverts, with the option of paying a monthly fee to lose the ads and access playlists through a mobile device. The free service has some limitations, and it isn’t exactly tailor-made for classical music, but Spotify just made a much-anticipated US launch. Even if it doesn’t change the way you listen to classical music, I’ll expect to see this one in the top five at the end of 2011.

9) Classical Archives is one of the oldest classical music sites on the web. It now offers streaming and downloads from a large selection of recordings, alongside the massive library of midi files that made this site famous back in the days of dialup Internet, when downloading a whole album of high-quality audio would take about as long as listening to the Ring Cycle.

10) Of course, there are lots of smaller digital music stores to explore. Between them, they account for just under 3% of our digital sales. Some are small because they’re new, others because they serve niche markets. HDtracks is one of the more popular destinations for high-quality downloads. Qobuz does a great job with classical downloads for the French-speaking market. eClassical just relaunched with an innovative pricing-by-the-second model. The Classical Shop (run by Chandos) offers a nice selection of independent recordings and high quality downloads. We’ll look forward to seeing these stores grow in the years to come.

 

Where do you go for music on the web? What makes the perfect record store? Use the comments to tell us what you think.

Categories: Tips

8 Comments

  • Thom says:

    I’m waiting for Ariama.com to really beef up their catalog in FLAC downloads. You don’t mention that Naxos Music Library isn’t a download service–it’s for streaming. (I know the difference is blurring, but not when you want to burn a CD for a long car trip). Some other record label sites (such as Linn) offer high-quality downloads, but some of these formats are not playable by all media players/devices.

    • Andy Doe says:

      Thom,

      You raise some good points here. You can currently stream music from:

      - Naxos Music Library
      - ClassicsOnline
      - Rhapsody
      - Napster
      - Spotify
      - Classical Archives

      You can currently download music from:

      - iTunes
      - Amazon
      - ClassicsOnline
      - EMusic
      - Rhapsody
      - Napster
      - Classical Archives

      In time, somebody will have to resolve the high-quality downloads issue. It’s tricky for a mainstream retailer like iTunes, though, because the files are sometimes 10-20 times the size, and if you’ve got 20 million tracks to store at that quality, all ready to go, on servers all around the world, those costs start to mount up. Right now, I think a lot of the people that might buy higher quality downloads are fairly happy with CDs.

      I do think there’s an opportunity for us to improve the FLAC offering on ClassicsOnline. It’s a shame that FLAC isn’t more widely supported by the popular portable players. We looked into offering a more universally supported format like WAV. I think we could deal with the fact that the files are 40% larger, but the real problem was that they don’t support ID3 tags, so you wouldn’t get any metadata with your music.

      -Andy

  • Andy,

    Thanks – very interesting statistics. I’m wondering: are these numbers revenue or unit volume? Because I think you’re sort of comparing apples (no pun intended) to oranges if you graph download and streaming services together. As you know, royalties from downloads differ greatly from those from streaming. It would be interesting to see the download and streaming sites broken out and compared against each other, and to find some data on average plays per download in order to more properly compare the two.

    • Andy Doe says:

      Hi Bill,

      The numbers here are all gross wholesale revenue, so I haven’t included our the retail margin from our own stores. This seemed like the best single measure of the amount of business each store does.

      The difficulty with any other metric is that no two stores work exactly the same, even within the broad categories of streaming and downloads. One store might define a “unit” as a track or album, another as one second of music. Some generate (and share) revenue from non-musical sources like advertising or unredeemed store credit, and cloud service revenue complicates things further. Some streaming services pay a per-stream minimum, others per-second or per-user. Some just add up all the cash and share it out.

      When it comes to selling digital music, there’s some ordinary apples, a few pears, a whole lot of grapes and even some orange juice, but at the end of the day, it’s all fruit. If we were selling it all, we could measure it by weight, but since some of it is only rented (and I can’t think of a fruity parallel to this bit), we have to measure it by what we got paid.

      You raise an interesting question though – how many times does the average download get heard, and would people be better off subscribing?

      For me, it doesn’t make much sense to even try to work it out. We might find that, on average, one group of people (subscribers or downloaders) ends up paying more, but nobody is average, so that wouldn’t tell us what was right for any one person individually. If you like to listen to a small repertoire over and over, you’ll pay less by downloading it once. If you like to listen to something new every day, you’ll save money with a subscription, but it won’t be quite as portable.

      Like a lot of people, I do both.

      From a business standpoint (and I think this is what you’re really asking), I can see how it makes sense to compare how much we make from the sale of a CD, a download and a subscription, and to compare how each of these gets used. The trouble here is that most people don’t need music, so demand is flexible. We can’t assume that all subscriptions replace sales, or that every download represents another CD gathering dust in the warehouse*. There are many factors at play, all interacting with each other. Every time we try to construct a mathematical model of what’s going on, the assumptions start to pile up until we don’t really have any faith in the results. If we really want to know what will work, we have to experiment, on a large scale, in the real world.

      -Andy

      * This is a figure of speech. Our warehouses are actually very clean. Our biggest warehouse is in Munich, where we have a huge vacuum cleaner like a mini tractor. It looks like a lot of fun. If I behave myself, perhaps they’ll let me drive it one day.

  • Lighthouse says:

    Dear Andy Doe,

    I gentely disagree that FLAC is not widely supported format.

    Pretty much every single android phones can play FLAC (thanks to Samsung) and with 3rd party (which is usually free) iPhones also can play FLAC files no problem.

    For dedicated music players, even cheap $40 Sansa Clip can play FLAC files these days.

    It’s been a long time (read : more than 5 years) since both Itunes and WMP can play FLAC with plug-in, and other major music players such as Winamp, foobar2000 support FLAC playback for a long time.

    Heck, even some of bleeding-edge cloud services support FLAC files. I was very surprised when Google Music Beta automatically detected my 24bit FLAC files and stream them into my android smartphone. Probably it is downsampled, but it is very welcoming support from a leading tech company.

    Hardware-wise, I believe FLAC has been fully supported since as early as 2005…. what -still- lack are accessibility and availability of the contents.

    At last, Linn Record revealed that once they started high-def music download service, (SACD/DVD-A/Bluray quality) the overall percentage of people choosing download was more than 60% at the first day of the launch. Currently the figure is more than 90%. Remind you Linn also offered mp3, normal-quality FLAC, physical CDs and even Vinyl, but 9 out of 10 chose high-def FLAC.

    People buy CD, only because they have zero alternative to get high-quality music otherwise.

    • Andy Doe says:

      It’s certainly true that FLAC support is becoming more widely-supported – and that’s a really positive thing. I hope it one day enjoys the same kind of universal compatibility as WAV or MP3.

      As you say, there are stores offering lossless recordings. You can see more than 1700 Naxos recordings available in FLAC here at The Classical Shop. This is an alternative to buying the CD but it often seems as if people would rather have the disc.

  • George Komiotis says:

    I enjoy streaming through Spotify but find it hard to find all types of music and also sometimes reception doesn’t allow