If you want to hear more about the eMusic saga from the company itself, they’ve started a new blog called 17 dots. (For more, see their defense to Ars Technica. Their argument remains simple: people want to pay less for music. Sales are declining; eMusic is the cure. Hypebot has some terrific coverage of the saga of label departures and what it might mean for eMusic. The short story, though eMusic says the departures are amicable, is that a few key labels have left (Victory, Ultra Indie), others are thought to be on the way out (Red House, Silva America, Tzadik), and others are rumored to be leaving. There’s really not a max exodus yet, as some reports might have you believe; the issue seems to be that labels are unhappy at the (distant) #2 online music store.

There are far better people than me to analyze sales data, and if you’ve seen anything intelligent, please send it along. But I think the most important question for musicians to ask is what the underlying trends mean. And there are quite a few unanswered questions about sales in general. You can read the record industry’s market data at the RIAA site. Here’s what I notice people haven’t been asking:

Why talk about the “decline” of music sales while ignoring online sales growth? eMusic and many other pundits point to stats that show consistent double-digit declines in music sales. Interestingly, the numbers look different when you figure in onlinegrowth. Take 2005 – 2006 mid-year. Total physical sales dropped by a whopping year-to-year 15%. That’s an incredible number. But figure in digital growth, which included an even more impressive 86% growth (and 112% growth in digital albums, which actually outgrew digital singles), and the year-to-year drop is only 6.1%. Year-to-year losses of 6% are not a good thing. But that says to me people aren’t buying “less music” so much as the industry isn’t transitioning from one medium to another. Online isn’t growing fast enough to account for the speed of physical sales’ decline. The latter has much more complex sources, including the management of the retail outlets themselves and the fact that the industry was actually producing and shipping less music. If digital growth can’t make up for physical sales, in fact, the solution actually seems to lie in better positioning the physical sales for the digital market.

Ironically, eMusic could be a part of the new growth, but their volume-only approach makes the assumption that losses are based on price alone. What eMusic doesn’t point out is that they’re dwarfed by the #1 online music store, iTunes. iTunes customers seem to feel that $10 an album is appropriate, or they would be the larger part of 112% album growth. (Note that, while I personally like subscription services, they’re a tiny portion of sales compared to iTunes, which could help explain why Apple is in no rush to add subscriptions.)

In fact, eMusic more effectively makes the argument that CDs are too expensive, not online purchases.

No one is talking about the 1990s. We live in a world that seems to have lost the ability to see earlier than the year 2000. Blame blogs. But if you look just before the big drop in US record sales in the 2000s, what you see is extraordinary growth in album sales through the late 90s — growth that might not have been sustainable even without the shift to online distribution. In fact, while sales are indeed declining, they’re not out of line with sales in the early 90s, before the explosive growth raised expectations of the record industry. If you really wanted to analyze the current decline, you’d also need to fully understand why that growth happened and why it wasn’t sustained. You might also ask, how could you recreate that kind of growth with online sales? (Or, for that matter, maybe that question is already answered in the 80-115% growth of online purchases, and the question is how to maintain that growth rate?)

I keep bringing these issues up, though, because I think independent musicians actually have more options than record labels. We also have more to lose. You hear a lot about the music industry, and not so much about the musician industry. We haven’t been hurt nearly as badly by declining CD sales as we have by disappearing live music venues and dwindling live audiences. Take specific genres like classical and jazz, and things get far worse. (One area of growth, incidentally, represented by some readers of this site: “worship”, largely Christian.) And, in the US, I think issues like rising health care costs have had more of a financial impact than single-digit year-to-year retail music sales declines.

The challenges are more daunting, but on a small scale, the solutions can be easier. The question isn’t what consumers in general will pay for music. It’s what your fans will pay for music. The question isn’t the margins and volume growth the industry needs to be successful. It’s what you personally need to support your own music making. When you look at it from a musician’s perspective, and consider massive sales growth online, the way everyone else is looking at the music business seems painfully myopic.