Thursday, November 22, 2007

Mixed Music Messages - But What's New

According to the UK industry trade association, the BPI, and the Official Charts Company the 150 millionth download was sold last week. This figure has been achieved over the last three years. So are things picking up for the industry are retailers happy at a time when pre-Christmas sales make up 40% of its revenues?

The digital sales actually amount to an average of less than one 79p per download per head of population per year. Recorded music companies have seen the slide in CD sales not being offset by growth in digital music.

So what is the answer and does one exist? Some blame DRM (Digital Rights Management) for the slow take-up of legal digital services and now more companies are starting to experiment with the DRM-free MP3 format. This charge was started in February by Apple’s Steve Jobs and has been followed by many including the major producers Universal Music, EMI who offer consumers a premium for DRM-free versions of its music on Apple’s iTunes store

At the moment, DRM is clearly seen as putting consumers off and the added confusion about formats results in driving people toward illegal downloads. BPI research this month that found consumers were almost four times as likely to choose an MP3 file as a DRM-protected track when the two were offered alongside each other.

The news from the US is no better. Even though, according to a Jupiter Research report, digital music spending is expected to grow to $3.4 billion over the next five years, and account for more than a third of U.S. consumer music purchases, it will not compensate for the anticipated lost in CD sales. They predict that the music download business will serve as an alternative, but not a replacement to CDs. JupiterResearch president David Schatsky reflects that, "One size does not fit all when it comes to acquiring music and consumer behaviour toward the variety of formats available reinforces that claim."

So even in a digital market such as music the physical product is still holding an attraction. Does this mean will still be enjoying the book for many more years than Mr Gates wildly predicted?