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The end of the music industry as we know it

Last year I blogged about how the music industry is changing along with a lot of others…
Recently, A very detailed 18 page report has been published by renowned technology and market research company, Forrester. I don’t have access to the entire article, as that would be expensive, but here is the essence of it:

  • Half of all music sold in the US will be digital in 2011 and sales of digitally downloaded music will surpass physical CD sales in 2012, reaching $4.8 billion in revenue by 2012, but in 2012, CD sales will be reduced to just $3.8 billion.
  • Media executives eager to stay afloat in this receding tide must clear the path of discovery and purchase, but only hardware and software providers can ultimately make listening to music as easy as turning on the radio.
  • The average MP3 player is only 57 percent full, suggesting that the devices are underutilized (correct in my case)
  • DRM(digital rights management copy protection)-free music enables every profile page on MySpace.com or Facebook to immediately become a music store where friends sell friends their favorite tracks
  • Cable TV style subscription music services will show modest growth, reaching just $459 million in revenue in 2012, while experiments in ad-supported downloads will be silenced by the powerful combination of DRM-free music and on-demand music streaming on sites like imeem.com
  • It is now very clear: Digital Ownership IS The Music Model For The Future
  • Forester’s recommendation to the ailing music industry: Solve The ‘Discovery Of New Music’ Problem Consumers Have First, Then Get Out Of The Consumer’s Way!

And the MOST important finding of this whole article in my opinion is:
“The industry has to redefine what its product is, said analyst McQuivey. Music executives have spent years tracking CD sales. But the ARTIST is the product not just the source of it.
New forms of revenue will come from unexpected sources. For example, the industry has failed to capitalize on the growing popularity of video games such as Guitar Hero and Rock Band. In a market where musicians are happy to sell a million copies of a CD, a video game market where titles can sell five million copies is enough to motivate even the most depressed music executive.”
The Forrester report is based in part on a survey of more than 5,000 consumers in the US and Canada.

I found it particularly interesting that way back in 2001, Forester did a study that the industry essentially ignored that proved digital music sales to be the future of music.

More here: www.news.com/8301-10784_3-9874319-7.html
Forester document: www.forrester.com/go?docid=43759

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2 Responses to “The end of the music industry as we know it”

  1. Help Me Help Your Music. | Jarome Matthew's Blog Says:

    […] The new music industry is drastically changing, moving away from major record corporations and back to independent artists, moving away from physical product to digital media. Economics will bring in $4.8 billion in revenue from digital downloads in the US alone in 2012. I blogged about the changes in the music industry more here: the-end-of-the-music-industry-as-we-know-it […]

  2. The Ongoing Vaccination Debate: A Good Thing | Jarome Matthew's Blog Says:

    […] the way they want to and have been for centuries. It’s the same issue that is overturning the music industry. The People are winning the battle, and it is a very good […]