How your fave artist will adjust to streaming

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Living species always need to adapt to their context in order to survive. For businesses, the situation is no different. As streaming is fully changing the music industry, its actors, both the labels as well as the artists need to update their way of building their careers in order to stay relevant. Which adjustments do they need to do? Can all artists react positively or are some of them poised to fallinto obscurity?

As we pointed out inside the first part of this set of 3 articles, the Media which links the music industry to the general public, is fast transitioning from

CD/Downloads to streaming. While this isn’t news anymore, no publication so far has gone deep into detailing which differences this will imply. In fact, this change of Media requires to adjust everything: how to record music, how and when to release it, how to package it, how to promote it.

This transition won’t come to no cost for artists. Some of them won’t be able to continue to be as good sellers as before while others will get bigger than ever. Various kind of artists have been extensively exploiting leaks of consumers to secure physical sales even if they weren’t that much successful anymore. This is over. Those artists will see their potential collapse and accordingly labels will stop investing in them. At the same time, they will invest in new singers.

This sounds unclear? That’s not an issue as you will learn all those new insights today itself! To better understand the impact of this earthquake, every section of this article, each of which points out a difference between both eras, is structured the same way: first the situation as it was in a sales environment, second how it will be in a streaming environment, third which changes it requires from labels and artists.

Catalog Management: No more distinct formats

Wild Asian Elephant Herd Crossing the Road

Physical Records Era

If there is one thing that always raised a lot of confusion this is the singles vs albums vs records debate. For decades now, labels used this trick to misled people about how many records an artist sold. On their side, fans used it just as much. Fans of rock bands with few compilations and singles tried to downgrade remaining bands because they sold less studio albums, although in total they sold more records overall, e.g. fans of Pink Floyd vs Queen. Fans of acts that released plenty of compilations that barely re-packaged the same songs used it as an evidence of hundreds of millions of sales, e.g. fans of Elvis Presley or Nana Mouskouri. Finally, fans of youngsters singers act as if a digital song is worth as much as an album, e.g. fans of Rihanna or Katy Perry.

This mess isn’t only a communication problem. It highlights a real issue which is the unfairness of comparisons due to the difference of catalogue exploitations. Indeed, this subject will be covered through an entire article that will show how artists with similar popularity achieved different results due to best / worst exploitation of their respective catalogs.

Streaming Era

Streaming completely erases those problems. Each track is only that, a track. All discographies of all artists are on a par, independently of what’s released on which format. The question we must raise then is how does this impact artists and labels?

Some artists have been heavily relying on selling multiple packages of the same songs to the same fans who collect everything. The most striking example is obviously Elvis Presley. His best selling studio album is his Christmas Album, the only one that is over 5 million units sold Worldwide, but he built an immense total of sales thanks to plenty of compilations, some relevant ones targeted to a large audience but also tons aiming to cash in from his richest followers. As a result, he has more million selling compilations than studio sets. He also has various strong selling box sets of the same material.

Streaming is often blamed for providing the opportunity to repeat tracks, fueling their results. The overall amount of streams happening every day everywhere is so big that this kind of behavior is irrelevant to the full picture. In the other side, an artist like Elvis Presley will have millions of free sales of physical records thanks to repeated purchases in comparison to someone like Billy Joel who’s discography is thinly structured. I voluntarily use this comparison as both are typical US acts attracting mostly people older than the average streaming user, they are also both Sony Legacy artists. At Spotify, Elvis has 7,008,117 monthly listeners while Joel has almost as many at 6,952,718, they also have similar cumulative totals of streams. Still, their album sales are everything but close, in a good part because of distinct catalog exploitations.

Adjustments Required

In recent years, Elvis has been outselling Joel by 3 or 4 to 1. Their respective promotions take into account this fact. We do see heavy and regular TV ads campaigns for the King, but we hardly heard about Joel in years. If both artists perform equally well on streams, there is no reason to expect this situation to remain that way. Elvis should start to be promoted slightly less while Joel will get a bit of light. Catalogs of Phil Collins and Queen have been reignited for this reason in recent years, a trend that will continue with all promotion budgets by estates of all artists adjusting their investments.

Catalog Management: No more availability issues

Truncated Tree

Physical Records Era

Our generation takes it for granted, every record is available at retailers. Our fathers know it wasn’t true. Specialized retailers as well as mass merchants had to care about spacing issues. They simply couldn’t order every album that ever got released. Even major acts like Carole King, Fleetwood Mac or the Bee Gees, acts who got some of the biggest selling albums of the 70s, had various of their studio albums deleted for very long. Most retailers used to stock at best three albums per artist – the current one, the most famous one plus a compilation.

That’s why compilations appeared. They tend to cannibalize more sales to studio albums than they manage by themselves, which should have conclude on their quick disappearance. They always continued to be part of the picture though, very precisely due to availability purposes. It’s true that 4 or 5 studio albums would cumulatively move more catalog sales than 1 best of, but retailers weren’t going to stock 4 or 5 studio albums of all acts, you would need to be named The Beatles or Pink Floyd to enjoy this situation. Every song on a catalog has a strength. The strength of a catalog is the combined total of all songs it includes. When there is only a best of available, the strength of every song left out is killed.

To point out a concrete example, in the US in 2004 Michael Jackson sold 228,714 units of Thriller, 17,639 units of Bad and 14,598 units of Dangerous. I use that year because it is the last year before the impact of downloads. We notice that Thriller sold respectively 13 and 16 times more than Bad and Dangerous. At Spotify, it is streamed barely  1,5 and 2,9 times more than Bad and Dangerous. The gap may be a bit bigger if we focuses in the US, but nowhere near the figures in album sales from 2004.

How is this situation possible? Considering all those albums were already deep catalog by 2004, their appeal shouldn’t have change much between each other. The case is that the majority of US retailers weren’t stocking Bad and Dangerous in 2004. Both albums would have been selling likely from 50,000 to 100,000 units a year with the same availability as Thriller, but they were doing only a fraction of that. That’s why plenty of US acts have one massive frontrunner album – Michael Jackson, Boston, Fleetwood Mac, Bee Gees, Peter Frampton, Eagles, Carole King, Bruce Springsteen, Prince, Police, etc. – because only the top essential album continued to be widely available, amassing decades of relevant sales.

Streaming Era

This is one more evidence that the whole sales were so much better argument is nonsense. That we needed to go out of our living room and put the money on the table changes nothing to the fact that an awful lot of technical constraints made those sales utterly unfair. Once again, streaming clears this issue as complete catalogs are available, we can stream album tracks from Dangerous as easily as album tracks from Thriller.

Adjustments Required

What’s the impact for labels and artists? The top priority in the past was to build a set of a dozen of songs to get an appealing greatest hits that would thus continue to be displayed on shelves of retailers all over the globe. If singles of a studio album were doing well, that was fine enough too, but as soon as the era of an album started poorly the record was abandoned. Majors always looked to generate direct sales, but also to create valuable brands of the artists and their records. If it wasn’t possible to secure more than a few immediate sales, expensive promotion wasn’t worth it. They already knew that the album wasn’t going to morph into a great catalog seller, it wouldn’t be stocked by retailers in the mid-run, it was dead meat.

With streaming, since all tracks preserve their value, there is no reason to give up fast a project. New songs from Katy Perry may be struggling, new singles continue to be released. In early 00s, similar bombs by Madonna or Mariah Carey weren’t so lucky. It’s an entire vision to renew, rather than building a set of top hits, labels and artists should now be looking at making their entire catalog as valuable as possible.

Catalog Management: No more pricing gaps

Delicate Arch

Physical Records Era

Haven’t you ever wondered why movies as well as music tours are gauged by the money grossed while records sales are valuated by units sold? It is fairly obvious that selling a ticket at $60 isn’t the same as selling one at $15. Why should we assume that selling a double album at $20 is the same as selling a classic album at $9?

The BeatlesAbbey Road sold close to 15,3 million in the US. That’s not surprising, it is one of the most legendary album ever and the Beatles are the top selling group too. How come Led Zeppelin‘s IV has sold 23,75 million then? Streaming figures unsurprisingly give the edge to Abbey Road. At Amazon, you can pick the CD of IV for only $8,99, at the same time you won’t get Abbey Road for less than $14,58. The situation is the same everywhere. IV is a regular at FNAC in every “4 for 20€” offers while the Beatles‘ albums are notoriously excluded from those promotions. That’s how in France IV outsells every year Abbey Road by about 4 to 1 in sales thanks to the huge boost it receives every summer from those low prices.

The gap of price between those albums is already problematic in order to compare their sales in a fair way, but at least they are both regular albums price-wise. If you look at more extreme products, the gap gets as massive as with tickets sales. The Beatles‘ set The Capitol Albums Vol 2 includes 4 albums in both Mono and Stereo, it is priced at $106,70. At the same time, 8 Classic Albums which includes the biggest Elvis efforts costs a mere $11,90. With popularity indicators based solely on records sales, we are forced to close our eyes on those differences, acting as if the 160-million plus album sales managed by both of them in the US alone mean the same thing. They don’t.

Streaming Era

One more time, streaming provides a way to accurately compare all acts, getting rid of one more technical constraint that was corrupting statistics of records sales in the past. By definition, streaming has no cost, the only thing it costs you to listen to one song is time. You won’t be more tempted to buy an album by Elvis or Neil Diamond just because it is 3 times less expensive than a similar product by the Beatles or the Rolling Stones, even if you prefer the music of those groups. You listen to what you really want.

In the past, the weakest was the absolute strength of a record, the lowest it was priced, helping to make the album worth it still. The fact that labels can’t play that game anymore require them to change their habits. They need to adjust not only on streaming front, but also for the records that they are still selling.

Adjustments Required

The regular music consumer of 2017 uses streaming. Records are purchased by people mostly way past  40 – in 2013 already, the average age of German buyers was 46. It is completely different to sell CDs to the entire population or a record to a group of persons aged around 50.

The first difference is that this group of persons grew during the vinyl era, feeling some nostalgia for records from their teenage years. That’s no coincidence if this format has been growing back since youngsters started to go after tracks rather than albums. Since their US low point of 900,000 units sold in 2006, LPs increased their sales every year up to 17,2 million in 2016. The trend is now peaking with an improvement of only 0,9% during the first half of 2017.

A second difference between the general public and people around 50 is their income. Older you get, the most you are healthy financially speaking. If only people over a certain age purchase records rather than everyone, it seems clever to increase their price. Is it happening? Absolutely. In the first half of 2017, every physical format posted better evolutions from last year in gross than in units with the physical segment as a whole dropping 7,2% in units sold but only 1,3% in revenue . The plan is clearly to sell higher-priced items to the ones that have the money.

A third difference is that people around 50 do not get much into novelty acts. They purchase records from a handful of acts they have been long fans of. Fans are much more likely to buy multiple times the same records on distinct versions. They will buy a compilation even if they own already all tracks from it. Also, they will buy a single they already have for decades just because that’s a new edition. They simply like to collect material from their favorite artist. It isn’t even that much expensive since they don’t care about new albums from new singers. If the share of fans among the public that purchases records gets bigger, as it is happening, it sounds logical to release more material of their most beloved acts.

As shown on discogs, an average of 30 compilations of Elvis were released every year during the 90s. In 2013, 34 compilations were released, the tally increased to 42 in 2014, 47 in 2015 and 52 in 2016. This doesn’t even factor in the countless reissues of previously released studio albums and compilations. Reissues of singles also increased from 47 for the entire 90s to 16 in 2016 alone. Majors are milking fans to death. They would be wrong to not do it if fans are ready to pay for that.

Not every artist can claim a set of highly devoted fans, ready to invest a lot of money into records sales. That’s why the countless reissues of vinyl’s in recent months concern acts with relevant fanbases plus a cult appeal.

Last week, it was The SmithsThe Queen Is Dead which was reissued on vinyl for $78,99. This week, Metallica‘s Master Of Puppets benefits from the release of an extended vinyl which costs $174,98. Next week, Queen‘s News of the World will get a 40th Anniversary edition, priced $119,59 on CD, $140,87 on LP and $189,99 on its Super Deluxe version. In 3 weeks, that will be the turn of the Sex Pistols‘ Never Mind The Bollocks, Here’s The Sex Pistols which almost feels cheap with a CD at $67,99. Those releases use all factors coming from the new demographics of persons who still buy records – healthy, that grew with LPs and who are dedicated to a fixed set of acts.

What happens then to acts like Mariah Carey or Michael Bolton? They sold tons of albums during the 90s, but we have yet to see their records largely reissued. Their catalog sales are dismal, only barely breathing thanks to Christmas releases. They fall into a no man’s land. They are too young to have healthy vinyl lovers among their fans, but too old to attract artists from the streaming generation. Mariah‘s Butterfly did get a vinyl reissue this year, but it barely sold a thing, in spite of being priced at a very reasonable $28,49. Why would a major label push after a new release by popstars from the 90s?

This kind of acts that have no collectors nor streaming appeal may suffer in the future as they are unlikely to benefit from strong promotional efforts. They will need an organic hit to become interesting anew for majors. In the meantime, as shown by Shania Twain or Bon Jovi they are left with tricks to milk money from fans like the newly flamboyant Tour bundles.

Catalog Management: No more compilations

The strawberry moon, June 20, 2016

Physical Records Era

We always took as a given that classic rock acts were great catalog sellers while pop stars felt out of fashion quickly. Is it necessarily unexplained? Obviously, a pop star must follow trends of successful sounds. They will sound disco, funk, rocking, R&B or electro depending on what’s hot at the moment. They look for catchy hooks, no matter which kind of instrumentals help them building it.

Rock has a long culture and largely dominates all-time rankings. Does it explain that much of a gap though? Why would someone like Britney Spears sell so much less catalog albums than Linkin Park while their current albums followed similar sales trends for 15 years? I select this comparison on purpose as Linkin Park do not enter the all-time lists, they aren’t regarded as classic rock stars but they still sold way more catalog albums than Britney, even before the recent passing of Chester Bennington.

The key is defined by one word: compilations. Britney doesn’t only have best ofs from her, her hits are also responsible for 2,278 appearances on multi-artists compilations. On their side, Linkin Park have no best of. They were also part of various artists compilations only 237 times. If you get Baby One More Time and Toxic through Now compilations, you won’t seriously consider going after her debut album or In The Zone. That’s millions of people interested in pop hits that are taken off the range of buyers of Britney, who’s very precisely a pop star. Annoying. If both acts sell the same number of albums and singles from their own catalog while Britney is part of an awful lot more of various artists compilations, is it normal to consider both equally successful then?

Britney is far from being the one who suffers the most from this unfairness. Her name is big enough to secure plenty of sales for her own products. Let’s check the tracklist of the UK version of Now 44 from 1999, the one which included Baby One More Time. Below are streams of 4 of the most well-known songs from it:

  • Britney Spears – Baby One More Time – 116,053,051
  • Lou Bega – Mambo no 5 – 114,005,429
  • Sixpence None The Richer – Kiss Me – 113,600,089
  • Eiffel 65 – Blue (Da Ba Dee) – 108,858,049

All four songs are incredibly close showing a very similar popularity. The last 3 artists sold nowhere near the totals of Britney though. As they failed to get more hits, people invested in various artists compilations rather than their personal outputs. Indeed, Mambo no 5, Kiss Me and Blue (Da Ba Dee) have been featured a combined 1,784 times on various compilations. All that while getting nearly 0 sale by themselves. Ok, they lacked charisma and consistency to sell their own records, should we ignore that those songs sold millions of sales of compilations though?

Streaming Era

Streaming figures happen to be a much better judge once again. Acts like Sixpence None The Richer who were barely getting royalties from products of others can now be paid their due thanks to their sizable streams. They must like it, but their label too. Those acts were absolutely never promoted. Even during the promotional campaign, the budget was limited to boost a mere CD singles, they never invested in order to build them an image, a following among the public. This may change in the future for every new star that is capable of getting hits.

Let’s compare similar acts from our current era. Various acts like AWOLNATION, Bastille, Capital Cities, Of Monsters and Men, Nico & Vinz or OMI who got one viral hit just like the aforementioned 1999 artists enjoyed millions of streams from their remaining songs and got popular DJs working on remixes for them. Streaming makes it easy for the consumer to give them a try, there is no need to risk $15 bucks on an album that may not be worth it. That’s how acts like Tove Lo, Zara Larsson or Sia, that wouldn’t have pass from one-hit wonders in the 90s a la Natalie Imbruglia, Vanessa Carlton or Emilia, ended building quickly a very respectable discography.

Adjustments Required

In fact, in the past, people used to buy from 5 to 15 albums a year, which gave very little chances for newcomers, so majors were pushing over and over the same big names like Mariah, Madonna or Celine Dion. This created a very unfair context where those stars could sell 100 million albums while hitting 20 million for others was painful. Now that streamers want diversity with an almost unlimited budget of time, labels can distribute in a more balanced way their promotion budgets over a large set of artists, welcoming new hit makers.

Promotion Management: Scheduling switch

2012 December - First Snow

Physical Records Era

For decades, the first question at the time of releasing an album was always the same – Q4 or not Q4. The market during the holiday season was completely different. Here too, the gap isn’t barely the size of the market. The profile of a December consumer isn’t the same at all as the July consumer, you don’t sell him the same material, nor for the same price. In recent years, each and every time fans compare debuts of strong albums, claims are made arguing the album issued before Q4 would have sold more if released during the Christmas rush.

That’s obviously wrong. First week sales are mostly fueled by fans, the number of fans of an artist is consistent all year long. The Christmas market is also way more competitive so an album that manages to be hyped in March may miss to impact the main audience in November when playlists of radios are full of new hits from major stars plus Christmas songs. The Christmas market can be so profitable when it works that a label can pay the big money to promote on the largest channels the album, which is why the X Factor-like TV shows always happened in the run for Christmas.

At that time of the year, tons of albums are bought as presents, there the music has a secondary role. You decide which album you offer on the back of the image you have of it. Music have always been offered between persons from a different generation, e.g. from a kid to his mom or from a mom to his son. You don’t buy music for your sister when you are an adult. That means you don’t really know what’s popular for the persons you will buy an album for, you barely try as per what is being said. You buy the last Michael Bublé album to your mom because you suppose she will like him, while she buys you the last album from teen stars that she knows nothing of in reality.

All those elements plus many others bring the conclusion that the music market used to be entirely different during Q4 and during the rest of the year. Comparing sales as well as chart runs of a record issued in November with one that came out in February is touchy to say the list.

Streaming Era

Streaming has no price, it can’t be offered as a one-shot present, it works by subscription. Revenues are linear all year long with monthly active users increasing steadily over time. Ed Sheeran‘s Divide broke all streaming records in early March, quickly topped by Drake, itself cracked in the US as early as in April by Kendrick Lamar. Big streams can be achieved anytime, there is no need to wait for December.

Adjustments Required

It’s quite the opposite, with streams being so linear all year long, the target of labels becomes to spread out fairly their big releases over the full year, avoiding strong competitions.

In fact, while consumers were able to buy two big albums at once in the past, they won’t be able to stream on a loop distinct sets. Each stream of one record comes at the expense of someone else. You won’t see Kendrick Lamar and Drake release an album the same day anytime soon, unlike what happened in hyped confrontations from the past like the history-making clash between Kanye West and 50 Cent. While there is space for everyone, for optimization purpose majors will need to be cautious in order to avoid artists with similar target audiences to front each other. They need to feed streamers all year long, to get a new big album out exactly when the previous one appealing to the same public starts to feel old.

This change will lead them to announce records very late. Once again, it is no coincidence if we are getting more and more surprise releases.

The rapper Future has already issued several albums that way, all of them on periods of weak competition. Indeed, 5 out of his 6 LPs released during the last 2 years came out when there was no Rap / R&B album inside the Top 3 of the Billboard 200. The only exception came out with What a Time to Be Alive which faced The Weeknd, but this was a collaboration effort with Drake which granted the album to get the edge. He is no exception, Eminem released a couple of days ago his new lead single featuring Beyoncé, herself the first major act that tried, and succeeded, the surprise release. Eminem‘s new album, Revival, still has no release date a mere 6 weeks before Christmas.

This situation was absolutely impossible during the physicals era. Expect the release schedule to become more spread over the entire calendar in the future but also to become more and more fluctuant.

Promotion Management: Profitability vs Promotion

Harvest

Physical Records Era

During this article, we spotted a lot of elements which revealed that records sales weren’t that much of a good indicator of success. Streaming fixes all those flaws while deeply changing the role of majors who need to adjust accordingly. For all those elements, we saw that the impact on their way of working is already visible – expensive records, vinyl’s / singles’ reissues, surprise releases, no more big Q4 rush, promising acts better supported, the end of compilations, release date clashes avoided, etc. There is one more huge difference that isn’t visible so far, a highly positive one.

The first part of this series mentioned how much bigger the music market will become in upcoming years. Every business sets its promotion budget depending on the forecasted results. The music industry is no different. I often spoke about the distinct leagues to which the artists belong. Depending on your potential, you will be promoted at the highest level or you won’t. That potential doesn’t depend only on an artist’s potential, but also on the potential allowed by the market. Using the big guns to promote a product that is out of fashion is rarely viable.

Today, only Adele and Taylor Swift enter this category in the US, which enables them to sell way, way, way more than anyone else. Had Ed Sheeran‘s last album been promoted the same way in the US as them, 800,000 / 1 million first week sales would have been a realistic target, but it wasn’t done that way because it wouldn’t have been enough to make it viable financially speaking. This means that while his absolute popularity was good enough to register more than half of Taylor‘s sales, the 40% weaker appeal put him on lower league for promotion purpose which only enabled him to do a fourth of what she is doing to do with reputation.

Streaming Era

The fact that the industry is booming changes this picture. If in early 2017, it wasn’t viable to do that massive promotion for him, by 2019 or 2020 a similar popularity will definitely be sufficient to justify an insane amount of promotion. How can we concretely see that? The highest league of artists is the one that is promoted on Medias that break over the music consumers to reach the general population, which is why on a dying music market the gap between both audiences get massive. Acts promoted to the entire population are acts that most inhabitants are aware of. Let’s check the Christmas Top 10 Album chart in the US from 10 and 20 years ago.

Chart dated 12-25-1997

  1. Garth BrooksSevens
  2. Celine DionLet’s Talk About Love
  3. Barbra StreisandHigher Ground
  4. Leann RimesYou Light Up My Life
  5. Chumbawamba – Tubthumper
  6. Spice GirlsSpiceworld
  7. Shania TwainCome On Over
  8. MetallicaReLoad
  9. HansonMiddle of Nowhere
  10. Mariah CareyRainbow

As many as 8 artists had a level of awareness among people from 7 to 77 fairly high. Only Hanson and Chumbawamba weren’t known by the mom of people buying them at the time. The market was healthy by then, which gave the possibility to the industry to extensively promote a lot of artists on major Medias like Oprah’s Show or general news.

Chart dated 12-25-2007

  1. Josh GrobanNoel
  2. Alicia KeysAs I Am
  3. EaglesLong Road Out Of Heaven
  4. VariousNow 26
  5. Mannheim SteamrollerChristmas Song
  6. SoundtrackHigh School Musical 2
  7. Miley Cyrus – Hannah Montana 2
  8. Taylor SwiftTaylor Swift
  9. Carrie Underwood – Carnival Ride
  10. Garth Brooks – The Ultimate Hits

By then, Swift and Cyrus weren’t household names. Mannheim Steamroller have never been, just like Groban. There is two various artists titles. This lets us with only 4 widely known artists, two of which, the Eagles and Garth Brooks, were sold almost only on nostalgia / thanks to their catalog appeal. Alicia Keys broke the main audience before the crash of the music industry, while Carrie Underwood got into the spotlight thanks to a TV show. That was the Christmas week, the one supposed to have the biggest names out there.

By 2007, there was simply much less big stars than in 1997. With a market going down every year in spite of the inflation, the music industry wasn’t risking a lot of dollars to build new figures, they were already losing money and firing people. On those dark moments, they had to keep exploiting their existing catalog and playing it safe.

Adjustments Required

With the market on its way to go strongly up anew, you should expect new Mariahs and Celines to pop out soon. Massive marketing plans of Adele and Taylor Swift were only the first examples of those larger bets. It wouldn’t be surprising to see big music-TV shows reappear along the way too. TV Specials about specific artists aired in key moments will also flourish. Will those new superstars be Ariana Grande and Shawn Mendes or fully unknown artists that we still need to discover? I can’t help for this question, only time will tell!

As usual, feel free to comment and / or ask a question.

Sources: IFPI, Billboard, Discogs, Rolling Stones Magazine, The Verge, Hiphopdx, Statista

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Che1967

Hey MJD,

Very interesting. Presumablmably in terms of gross sales (as in films) The Beatles would be way ahead? Is that correct.

Msion

Hi MJD
Is that true Nana mouskouri’s best selling female artist of all time with 300 million records sold?How many records she sold?Thanks

Karalady

I thought she sold less than one tenth of this