Wednesday, November 26, 2008

Digital Sales Surpass Physical at Atlantic Records

"Atlantic, a unit of Warner Music Group, says it has reached a milestone that no other major record label has hit: more than half of its music sales in the United States are now from digital products, like downloads on iTunes and ring tones for cellphones."
According to the New York Times, Atlantic Records is reporting that digital product sales have accounted for 51% of its revenue in the fourth quarter. This marks the first time this has happened on a major label level. While everyone seemed to expect it, the reversal in overall profit has come sooner than most expected. As the NYT reported, labels have long hoped that a rise in digital sales would offset the slump in physical profits. Yet, at this time that hope seems to have evaporated. Labels are exploring many options surrounding the "360 model" which includes sharing profits from ticket and merch sales, but a suitable and sustainable model has not yet emerged. Read the full article HERE.

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