So, it looks like digital music sales aren’t going to ever be enough to make up for the loss of the compact disc, which cost about 10 cents to produce and could then be sold for eighteen bucks. Shocking.
In each of the past two years, the rate of increase in digital revenue has approximately halved. If that trend continues, digital sales could top out at less than $5 billion this year, about a third of the overall music market but many billions of dollars short of the amount needed to replace long-gone sales of compact discs.
“Music’s first digital decade is behind us and what do we have?” said Mark Mulligan, an analyst at Forrester Research. “Not a lot of progress.”
“We are at one of the most worrying stages yet for the industry,” he continued. “As things stand now, digital music has failed.”
Digital music, which does five billion dollars in revenue a year, has “failed”. Failed at what? Sustaining a stupid, unsustainable, exploitative cartel? And at any rate, what have we learned from all of this? Is it time to start thinking about a better market solution to distributing creative works and compensating artists?
Of course not! It’s time to shut off people’s internet access!
Ms. Moore said the recent introduction of tough anti-piracy laws in South Korea and France, which authorize cutting off the Internet connection of repeat offenders, showed that stricter enforcement could persuade listeners to seek out legal alternatives to unauthorized file-sharing services.
In South Korea, where the music business has long been blighted by piracy, digital music sales rose 14 percent in the first half of last year, after the new law went into effect in 2009, the federation said. The first account suspensions occurred in the autumn, and the group said the publicity surrounding the crackdown should help convert more consumers.
Up next, the South Korean government seals off your garage so you can’t store all those stolen televisions in there. GARAGES ARE A PRIVILEGE, NOT A RIGHT. USE THEM RESPONSIBLY, OR DON’T USE THEM AT ALL. NO RUNNING IN THE HALL!
Any other big ideas, music dinosaurs?
“The television is a great opportunity,” said Thomas Hesse, head of the digital business at Sony Music Entertainment. “We haven’t innovated in the living room for many years.”
Thomas is certainly half-right — Sony hasn’t innovated at all for many years. But do you really think I’m going to pay for music to come out of my (Sony brand, of course) television? Don’t I already have a stereo for that? I mean, this sounds an awful lot like your “subscription” fantasy from 2002, where I don’t own any content, plus you get recurring revenue and your customers become dependent on the quality of your service. You’ve been pushing that line since I was in college, and no one’s especially interested.
Around the world, 10 million people have already signed up for subscription-based online services from Spotify, Rdio and Deezer, some of which have attracted additional millions of users with free, advertising-supported services. Many executives hope the growth of offerings like these can reduce the industry’s dependence on sales of individual tracks through digital stores like Apple iTunes, a model that has attracted little interest from young music fans, particularly outside the United States.
So, you’ve got 10 million people in the entire world (.02%) signed up for these services, and an even smaller group of people who will sign up for these services, but only if they’re free. And, you’re optimistic about this, but disappointed by FIVE BILLION DOLLARS in normal sales??? Guys, guys, guys…. join the winning team here. Hint : it’s not “Zune Pass”.
With growth in digital revenue slowing nearly to a standstill, analysts say, it is no surprise that talk of mergers and buyouts is again swirling around some of the Big Four music companies — Universal, Sony, Warner Music Group and EMI. Warner, for example, is said to have hired bankers to explore a sale of the company or a purchase of EMI.
“What has been keeping labels afloat has been the digital story,” said Mr. Mulligan, of Forrester Research. “If, all of a sudden, what they have been telling the market is the future turns out to be a failure, that radically changes the conversation.”
Yeah, I see, and if we don’t have giant record labels, we won’t have music anymore, right?
Wait… you mean the labels don’t actually make music? They just restrict access to it, and then pester me with cross-promotional advertising campaigns for Taylor Swift, and then shut off my South Korean internet access if I’m not willing to pay them enough to cover their 3000% profit margin expectations?
For the last time (yeah right), suit-wearing-or-non-suit-wearing-industry-dudes. Your product went through a dramatic cost-change — access is not valuable anymore. CDs are dead, and music is now a volume industry, not a high-margin one. If you don’t want to play in that economic sandbox, go somewhere else. Otherwise, stop complaining and figure out how to make five billion dollars (which you’re basically getting because Apple, and then Amazon, swooped in and built you an ass-saving distribution channel, which they go so far as to manage for you) go far enough to sustain your companies. If you can’t, I’m sure someone else will, because five billion dollars is a lot of money to make from selling someone else’s idea, digitally, over someone else’s website.