Wednesday, March 10, 2010

Music changes

Back in February the LA Times reported on a study by the NPD Group. According to the article,

Last year saw a 21% drop in the number of people in the U.S. buying music -- both digital and physical -- compared with 2007, according to figures released Thursday by NPD Group, a market research firm.
The NPD numbers echo similarly dour news released last month from the IFPI, a London-based consortium of 1,400 record companies. A 12% uptick in digital music sales in 2009 was not enough to reverse an overall 10% slide in global sales of recorded music in all formats
So things are changing. Another study by the NPD Group further illuminates. As you read the report, keep in mind what the major labels want.

1) There's more profit in albums than in singles, so the majors held the line on album prices and killed off CD singles so consumers had to buy the album to get the song they wanted.

2) There's more profit in physical profit than in downloads, so the majors dragged their feet even getting into the download market, and have been doing everything they can to stop consumers from downloading and/or sharing music illegally.

And the result?
Consumers’ primary reason for not purchasing CDs was that they were spending less on entertainment overall, because of the recession. Consumers were also concerned about the price of CDs, and expressed satisfaction with the collection of titles they already own. Among the reasons consumers cited for preferring digital music over CDs was that they could choose only the songs they wanted to purchase, and could immediately download and listen to their purchases.
See the problem? Consumers want one thing, the labels another. Businesses that survive adapt to the market. Those that don't die.

I don't think we're seeing the death of music, or artists no longer being able to support themselves, or any of that. But for the labels that are desperately trying to turn back the clock? The market's already spoken.

 - Ralph

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