RockBand Music Sales vs. Early iTunes

This guest post comes from Nabeel Hyatt of Conduit Labs who blogs at brinking.

If you care about music, and therefore whether that business will survive, there was some pretty amazing news from Rock Band this week that didn't get the attention it deserved. MTV mentioned that Rock Band had sold 6 million downloadable tracks in its first four months of sales. And while that roughly $10-20M in additional revenue is nothing that will alter parent company Viacom's stock, the finer numbers compare favorably to the early days of iPod.

First, let's keep in mind the state of the music business. People are pirating music like crazy, and consumers that were screaming about .99 cent DRM'd tracks six months ago are screaming about the high price of .89 cent non-DRM'd tracks today. If you want evidence at how much the music industry has changed in the last 24 months, just look at Rcrd Lbl, or the deals that Last.Fm and iMeem struck with the labels. The labels expect most of their money from those deals to come from a split of ad revenue. Which is to say they expect the incremental revenue of each track to hit zero pretty soon.

So on that backdrop, Rock Band is selling totally DRM'd tracks, locked to a single platform, at between $.99 and $2.99 each. And their attach rate considering all that is amazing. For comparison:

This guest post comes from Nabeel Hyatt of Conduit Labs who blogs at brinking.

If you care about music, and therefore whether that business will survive, there was some pretty amazing news from Rock Band this week that didn't get the attention it deserved. MTV mentioned that Rock Band had sold 6 million downloadable tracks in its first four months of sales. And while that roughly $10-20M in additional revenue is nothing that will alter parent company Viacom's stock, the finer numbers compare favorably to the early days of iPod.

First, let's keep in mind the state of the music business. People are pirating music like crazy, and consumers that were screaming about .99 cent DRM'd tracks six months ago are screaming about the high price of .89 cent non-DRM'd tracks today. If you want evidence at how much the music industry has changed in the last 24 months, just look at Rcrd Lbl, or the deals that Last.Fm and iMeem struck with the labels. The labels expect most of their money from those deals to come from a split of ad revenue. Which is to say they expect the incremental revenue of each track to hit zero pretty soon.

So on that backdrop, Rock Band is selling totally DRM'd tracks, locked to a single platform, at between $.99 and $2.99 each. And their attach rate considering all that is amazing. For comparison:

Five years ago on April 23rd, 2003 the iTunes Music Store launched:

• 200,000 songs in catalog (source)
• 977,000 iPods in market (source)
• 3.5m songs/Mo avg sales in first year (source, etc)

Four months (or so) ago Rock Band was released:

• 70 songs in catalog
• 1.1m Rock Band games' in market (as of January) (source)
• 1.5m/Mo avg sales in first four months (source)

The data isn't perfect: the Rock Band sales numbers are not up to date, we're not even talking Guitar Hero DLC, and the iPod had been on sale for over a year before the Music Store came online, giving it a big advantage. However, even with those caveats it is clear that people are willing to pay for more depth in their music experience, the same way they have shown a willingness to still pay for concerts. No, Rock Band isn't likely to be the next iPod, the early numbers are still off substantially from the iPod (see below). But selling active music experiences shows signs of being the growth opportunity for the industry. Which led one industry analyst to say:

"In 10 years people are going to look at idly listening to music the same way as we look at watching a TV show in black and white," said Geoff Keighley, co-chair of the Game Critics Awards that named Rock Band the best game of the industry's annual trade show in July.