While the Sky ain't falling Distribution isn't getting any easier either - which explains everything.

While Glenn is right that music sales are down at the start of 2014 there's a couple of things that the article and for that matter very few people are considering.   And, that's the State of Distribution and the lack of it's importance it has in the mindset of so many when they are talking about the Music business. 

Let's be clear being on a Major Label means it guaranteed distribution. The END.... 

Trust me every major selling artists knows the value that their distribution team brings to the table and that why you see so many old guys, since it's still mostly guys -- save the few executives like Jess Sarmiento; CoCEO of Altavoz Distribution and Leota Blacknor; VP at Caroline Distribution -- in so many pictures with all your favorite music stars.  -- I'll look for a video I have of Katy thanking her's at a convention two years ago. 

Nelson Jacobsen, Ron Spaulding & Jess Sarmiento #MusicBiz13la

However, back to the point... Considering that only one full service distributor has entered the marketplace since 2004 and consolidations have been going on since 2005 there was going to come a time when the chickens err CDs, BluRays, DVDs and Vinyl --yes some is coming back* come home to roost and that is nye.

So what is happening you ask?    If you've been in this business since the 90s think 1995 store returns and 1997 bankruptcy coming together at one time.  Start with if you didn't notice there where a crap load of releases in the 4th Quarter and consumers didn't consume.   Ego Hoc returns are already in trucks heading back to distributors and labels will be finding out about now.  Plus the merger of the onestops and their combining warehouses along with there other distributors moving warehouses created a cluster jam few could have predicted. 

Sure there are some great things happening and efficiencies are being reached at the very high levels; however, the trickle up that is the music business is about to trickle out.  

We need to start thinking that Distribution is the engine that STEAM runs upon and if we don't plan for it just like electronic parts, food, beer & wine and pot growers whom all know distribution is King Music just won't go any where.  While cities like Austin, Nashville Seattle and fingers crossed Washington DC are starting to understand the importance of music to it's culture and economy.   

There is a cycle that will invariably happen and just when things start reaching a boiling point in each city and the musical talent comes together to generate tangible IP and goods.  This talent has to get it's self in a bus, car or van and get to the next place; So, they can spread word of their music while  a distributor (there are only a handful of companies that do it) have to be along for the ride to make sure that every store online and physical is carrying the releases and knows that story behind it and the artists putting it out.

However before that happens planners, investors and those that are looking at the direction that we want to grow our economies from the local to the global markets nothing must start to consider, fund and promote as economy partners in the economy.    

PS  Soundscan is showing that physical music is  presently outselling digital music. 

Music increases US GDP and some still debating if it's a viable industry?

Gotta give a huge shout out to Glenn Peoples and  +Billboard for putting out this article about something that I've been saying for years.  Music has value. 

To me music has always been the why not the how.  Something along the lines being the medium.. well without the intent to communicate there is no need for a medium.  And! it now seems that the  U.S. Bureau of Economic Analysis (BEA) agrees with me on this and decided to give the US Gross Domestic Product a 3% boost and a HUGE win for those of us in the music world. 


Or in Glenn's words 

"TAKEAWAY: The music industry has always punched above it's weight in profile, but didn't always have the influence that matters. this GDP shift could help fix that disconnect. 

According to Bloomberg's Peter Coy   this rise of the Intangible economy is for real and a couple of quotes from his article got my attention: 

"The effect of the revision will be immediate. Measured GDP will get a one-time boost of about 2.7 percent when the government starts counting R&D and artistic creation as investments. (New Mexico and Maryland will get the biggest lifts.) The future growth rate will probably be fractionally higher, too. With R&D treated as an investment, measured economic growth from 1959 to 2007 would have been 3.39 percent annually instead of 3.32 percent, the BEA estimates." 

 "If all forms of intangible investment were officially recorded, they would exceed investment in bricks, mortar, and machines, according to estimates by economists Carol Corrado of the Conference Board and Charles Hulten of the University of Maryland."   Link 

The Rise of the Intangible Economy: U.S. GDP Counts R&D, Artistic Creation

It also seems that the Secretary Pritzker, from the Commerce Department is getting in on the act too by touring Music making facility and promoting USMADEMUSIC  on the Sec's blog.  which also points this fact out. 
"In fact, entertainment, literary and artistic originals contributed $74 billion to the U.S. economy last year, according to the Department of Commerce’s Bureau of Economic Analysis."








So will these new “intellectual property products.” ( which is a now how cost of new music and other artistic endeavors are to be categorized) bring in the investors that are seeking sustainable returns like the double digits one I' recently blogged about as well as those that want to be part of something more. IMHO music has always been more than most of us can put a handle on and this new way of our economist looking at it helps others start to see the more too.

Terrance and I Capital Hill~ Grammy On the Hill 2013