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April 10, 2006
The end of the hit (inflation corrected!)
Australian actuary Dermot Baslan kindly corrected my The End of the Hit data for inflation (actuaries are great at this stuff). Then, while I was revisiting the data, I went back and re-ran my queries on the RIAA database to eliminate singles, music DVDs and other non-album fare. Finally, I updated the figures to get the final 2005 numbers.
The revised numbers, with a nice six-degree polynomial regression line to highlight the trend in the lower chart, look like this:
The point? When you express hits as a ratio of total industry sales and then correct for inflation, it's not quite as dramatic--total music sales have been falling along with the hits. But it still ain't pretty. At all.
The updated spreadsheet is here.
Posted at 10:24 PM in Media Meltdown | Permalink
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» Long Tail from Perceptric Forum
Chris Anderson has an update on his Long Tail data regarding the peak hit value in the music business. If you are intererested in the record biz you really should read this... [Read More]
Tracked on April 15, 2006 at 05:15 PM
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Would it look better if you showed a five degree polynomial which didn't have to end on a massive downward gradient not supported by the data points?
Posted by: Tom | April 11, 2006 at 02:15 AM
Chris,
Some loose thoughts...
Can we get more information on how the inflation was stripped out of the data please? I've looked at this for a while and what strikes me is that you've had deflation (at the retail end) of music sales for the past few years, with the price of a new 'hit' CD dropping from a peak of £13 in the late 90's to only £7 today.
This made me think again about how to use delators on the data as its not a consistent trend - price levels are moving up as well as down. Then I thought about what it is you might actually want to deflate - the retail price value of the CD (now falling), the wholesale cost of producing the CD (...who knows whats happening there?) or - better still - the profit margin of the music industry (...okay).
With no clear trend in the direction of price, perhaps it would be better to 'Follow the Money' - that is the only money that matters, profits. If it was possible to strip inflation out of time series data on profits of hits (or majors), then this might be a good 'real terms' illustration of Long Tail effects over time.
Will Page
PS: The very best of luck with the book, cant wait - I've got my advance order in!
Posted by: Will Page | April 12, 2006 at 03:01 PM
Right on track.
Posted by: csven | April 14, 2006 at 08:14 AM
I violently disagree with fitting variational data like this with high degree polynomials. The data cries out for smoothing, or at worst one of those arbitrary moving averages (which introduces smoothing and lag). What if the latest data is off a bit? Screws up the interpretation. And how did we manage to get curves that appear to end in 2007? Not buying this conclusion, but I really like the blog...
Posted by: Walter Lounsbery | April 29, 2006 at 09:28 AM
Nice analysis .. But i am not so agree with the chart of hit albums to industry sales. It is little bit misguiding by my point of view.
Posted by: christmas shopping | November 12, 2009 at 02:57 AM