In a year marked by surprises, it seemed fitting that, as a recent story on Billboard’s website attested, the top-selling CD in 2016 came from Wolfgang Amadeus Mozart, who has been dead for 225 years.
So move over, Drake. Take that, Adele. Mozart is king.
The story was widely picked up and shared, from Forbes to NPR. It seemed to confirm the sad state of a music industry rocked by successive waves of technology and declining sales. Mozart was said to have claimed his posthumous title in an unusual way — by supposedly selling 6,250 units of a new 200-CD box set. That works out to an impressive 1.25 million CDs, which the Billboard story claimed made it the year’s top-seller.
But the Mozart story was more marketing hype than true — because no one counts box sets as single CDs and, in fact, fewer than 300 Mozart box sets have been sold in the United States (equaling a more modest 60,000 CDs), the market tracked by Billboard’s famous charts, according to Nielsen Music.
Yet the Mozart story also obscured an even more surprising fact about the music industry in 2016: It was a pretty good year. While the salad days of the CD era just a decade ago are gone, the industry is no longer in freefall. Technology has changed how we define what it means to buy music. And this year it became increasingly clear that people once again are paying for their music, just in different ways.
“That’s the interesting part,” said David Bakula, a senior vice president at Nielsen Music, which provides the data used by Billboard to compile its various lists of the best-selling tunes. “There’s not a lull in the music industry. There’s been a dramatic change in consumption.”
Consider the case of Canadian rapper Drake, who earned the true title for top-selling album of 2016. It was for his latest release Views, which includes the singles “Hotline Bling” and “One Dance.” The album – in various forms — has sold just shy of 4 million units going into year’s end.
How Nielsen accounts for that number reflects how much the music industry has shifted in the last decade. Today, Nielsen tallies up digital and physical album sales, digital single sales and online audio streams. That gives you the new metric that the industry lives and dies by: The album-equivalent unit.
Drake has sold only about 300,000 physical CDs. But the album enjoyed 1.2 million digital album sales, 5 million digital singles sales and an astonishing 2.8 billion audio streams. Nielsen divides digital singles by 10 and audio streams by 1,500 to create new numbers that equal the revenue from a single album sale.
Looking at the health of the music industry in this way – with a mishmash of financial ratios that attempts to capture how people consume music today — shows that overall music sales are up 3 percent through 50 weeks in 2016, compared to last year, Bakula said.
So, yes, traditional album sales are down 16 percent. That’s bad. (Interestingly, digital album sales fell faster than physical album sales, too.) Digital single sales are down 25 percent. That’s even worse. But revenue from on-demand digital streams exploded 77 percent over last year, reaching 234 billion streams.
“You’ve gone from a world where digital disturbed the scene, but now digital is falling in terms of ownership (of music),” Bakula said. Today, “the digital consumer has switched to streaming.”
The streaming number comes from services such as Spotify, Apple Music, Napster, Google and Amazon, which offer huge buffets of music through either subscriptions or advertising-supported models. But Nielsen’s streaming count does not include online sites popular with music lovers such as Pandora, which acts more like a radio station, or Youtube, where users often play music videos.
After years of worry that technology would foster only the theft of digital music, artists finally are getting paid – albeit fractions of a penny for each song streamed. That’s why it takes 1,500 song streams to equal the financial impact of a single physical music CD.
Those fractions of a penny can add up. In May, Drake set a new record for the number of digital audio songs streamed in a single week: 246 million. Drake became only the third artist to ever crack the 100-million streams-in-a-week milestone. And he crushed it.
Drake then surpassed that 100-million milestone seven more times this year.
“He is the master of streaming,” Bakula said.
Adele, the British singer behind the year’s No. 2 release, has taken a different approach to selling music. Adele has moved 2.3 million units this year, despite her album “25” actually debuting in 2015. But more than half of her sales (1.2 million) have come from physical CD sales – four times what Drake sold in music hard copies. Adele had an exclusive deal with Target to sell a special edition of her CD. She also refused to allow streaming services to tap her new album until late June.
“It’s completely different consumption models for different artists,” Bakula said.
In the first six months of 2016, the money coming in from subscription streaming services more than offset continuing drops in sales of physical and digital music, according to the Recording Industry Association of America. Revenues from retail sales grew 8.1 percent compared to the same period in 2015 – strongest growth since the late 1990s.
The overall share of revenue coming from streaming hit 38 percent, through 50 weeks of this year, Nielsen said.
The death of the traditional album is not exaggerated. This year will mark the first since 1991, when Nielsen began tracking sales, that no album moves at least 2 million units in either physical or digital form. Last year, there were five.
Bakula said it’s an outdated metric.
“That’s not how we should measure success anymore,” he said.
It’s understandable why the Mozart story would gain traction. It reflected how the music world used to operate – putting aside doubts about whether each CD in the box set should be tallied as a separate sale.
Last week, the original Billboard story was quietly updated with a new, more subdued headline that calls the box set only “a Surprisingly Hot Seller.” Billboard did not respond to a request for comment. For a box set that includes 240 hours of music, every work by the famous composer, that’s probably true. But in the music industry’s new world, it was not even close to a title contender.