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

I have been consulting a great deal with people and the artists I work with about the massive changes in the music industry lately. It is long overdue that I make an official blog post about it.
But how do you sum up what equates to declaring the death of gravity to a physicist in a short blog entry? It’s a challenge, however, now we know enough to confidently make some bold statements about where the music industry is going and I will very briefly summarize them here:

• The music industry is moving away from corporations and back to the artist/musician where it should be (this is a very good thing for you, the artist, but more rights and control means more work and responsibility)
• Giving music away for free and digital downloading doesn’t hurt music sales, it is in fact the only way music is purchased, and essentially has been for a long time. (The myth that downloading is hurting sales is propaganda that corporations have spread in attempt to retain control they are losing over the music industry – see first point)
• Music as an emotional commodity has become about building and selling relationships, NOT selling a product. Build a strong following and fans will support you in all your efforts. This will soon become a philosophy for all business in the near future in my opinion.
• The Internet now fully into it’s web 2.0 phase is the way that artists can independently build a strong business without corporations or other companies due to it’s many resources. (This is covered in detail in Andrew Dubbers’ free eBook which I blogged about here, and links to some of these can be found in my blogroll/links page
• Blogging and social networking is one of the most important ways to accomplish the above and embrace the new music industry and start building your audience.

So these are some pretty drastic changes, I mean, telling artists they need to give their music away in order to sell it when they have been told that is stealing and will cost them sales? Well, I have started to do it myself as mentioned here, and many professionals, industry experts and artists have proven these points to not only be true, but very successful, artists like Jonathan Coultan. He may not be famous enough for you to know him, but he’s an independent artist making a living from his music using these very techniques. There are articles about it all over the internet. Major artists like radiohead have been starting to make changes as well, selling their music by donation, and a lot of people not only think they’re crazy, fellow artists think they are ruining the music industry. But those people haven’t studied the proven facts about where music is going.

I have been researching this for some time now, particularly for a course I teach at a local college as part of the full time music program. I also offer artists consulting on effectively using these techniques. I don’t have all the answers because no one does yet, things are still changing and progressing. But I can see where things are going, and it is a good thing.