The State of Internet Music on YouTube, Pandora, iTunes, and Facebook

Of the some 100,000 albums released last year, 17,000 of them sold only 1 copy; more than 81,000 albums sold under 100 copies. In fact, just 1,300 albums sold over 10,000 copies, an astonishing figure given that these numbers combine physical and digital album sales. And for physical sales alone? Only 2% of new albums on Soundscan sold over 5,000 copies -- that's a skydiver's plummet from the golden era of the music industry. Physical sales of albums continues to plummet while digital singles sales grow.

Eric Garland, CEO of Big Champagne, says industry folks today are obsessed with "FFF numbers"--that is, an artist's friends, fans, and followers. "It's a race, but to what end?" he wonders.

Interestingly, it wasn't Apple that Garland viewed as the most important name in music, even though the company's iPods, iPhones, and iTunes indicate otherwise. "YouTube is increasingly the category killer," argued Garland. "When people ask me what is the biggest name in music in my opinion, they want me to say Apple. I usually answer: YouTube." Garland told audiences that if you actually look to where people are listening to music--not even just looking at videos--consumers are turning more and more to YouTube, which he calls the "largest catalog of on-demand music on the Internet." If only Google could make this service profitable, right?