Next Big Sound (a/o May 16th):
Who do we have to thank for our modern, digital music market? That would be Apple, but more specifically the iPod, according to top industry analyst Mark Mulligan. And, once sales of iPods started tapering off, so did the explosive growth of the digital assets.
"As soon as iPod sales slowed, so did the digital music market," Mulligan relayed. "Prior to 2008 the digital music market had grown by an average annual rate of 85.2%, after 2008 that rate dropped to 7.5%. In many markets the 2009 slowdown was of falling-off-a-cliff proportions: in the US digital growth slipped from 30% in 2008 to a near flat-lining 1% in 2009."
Which means, we actually have a serious growth problem, right now. Here's a look at digital music sales alongside iPod sales, using IFPI and Apple-supplied stats (and posted on Mulligan's blog).
Of course, portability has grown vastly more complex in the post-iPod era, though the iPod is still a very functional app in iPhones. Androids have full-service music functionality as well, but according to Mulligan, it's not the same thing. And the net result is a non-dynamic, sputtering digital music market, one that really needs another 'iPod moment' more than anything else. "With all of the talk of streaming services and the shift to the consumption era it is easy to think of Apple’s iTunes Store as yesterday's game," Mulligan relayed.
"Such an assumption is as dangerous as looking upon the CD as an irrelevance in the present era. The CD and iTunes combined account for approximately 78% of total recorded music revenue in the world's 10 largest music markets. And yet neither look like they are going to provide the momentum the music industry needs over the next few years."
Casey Wednesday, November 07, 2012
Surprise, Surprise. There won't be another iPod, download sales are not going to be reinvented. We can strike down Spotify and Rhapsody all we want but times are changing and streaming is in. Being built into every copy of Windows 8, upcoming in Apple products, only a matter of time before it is built into Android if it is not already. It's not just music. The idea of buying music, movies, games, software, etc. is over, everything is going to a rent-access model. Interestingly, the software industry has been dreaming of this day for years. Could they know something artists do not?
Ritch Esra Thursday, November 08, 2012
Couldn't agree more. In music, like most media, we're moving to a total access world.
Visitor Thursday, November 08, 2012
Total access, yes -- but for a price!
3 strikes, 6 strikes etc. kill mainstream piracy, while Ms. Swift was kind enough to kill Spotify.
The free ride is over. Get used to it!
Casey Thursday, November 08, 2012
Miss Swift did not kill Spotify. In the end, the artists are not the ones who call the shots. It is the consumers and as consumers continue to move to a cloud-based model, music download sales will be history. Artists that deliver will be rewarded, artists that do not will be either have to be major artists or be left in the dust.
There are countless people who have decided streaming is for them. And more and more people continue to choose this everyday because of the unparelled convenience and availability. Many of these people are paying more for music now than ever before.
Adam Thursday, November 08, 2012
Time to hire some DJ's for spotify and others, start re-inventing the model of curated music but with a streaming form. Options to have curated stations with real DJ's who can play what they want will help renew the idea of music discovery. In addition, time to start charging for subscription services and removing the entirely free model. Where is the really awesome app? Spotify app is a total fail, not convenient, poorly thought out and not navigable in the way a lot of people want... Bring us easy cheap music on our phones and we will pay. But you have to force us to pay. Not with the law, but by taking away the services if we don't pay. Don't they get it? Time to move forward for real this time...
Francesco Cudrano Friday, November 09, 2012
Agree, everytime i think that real human content curation and not algorithmic systems will create value for streaming services i fell like i'm mad cause everybody is investing on software and not on curators. Maybe that's not the case and we will see the resurrence of the radio-dj authority, on a different medium than fm radio.
Spizza Thursday, November 08, 2012
It's an interesting view. The home base for music consumption/purchase was always via the desktop client, not the iPod. So given the iPhone kind of replaced the iPod in terms or portability, you wonder what really changed. The view I had seen locally in OZ was the digital downloads actually increased with the rise of iPhone into the market. Could the iPhone have been such a major distraction?
Other factors, when did variable pricing get introduced on iTunes? That faced resistance from users at the time too..
spizza2 Thursday, November 08, 2012
Yves Villeneuve Thursday, November 08, 2012
As the graph shows, the global recession is the leading cause of lower ipod sales.
I think it was July or September that Apple reported an improvement in ipod sales or mitigated ipod sales environment, possibly an indication of a recovering global economy.
Paying music consumers don't normally spend more than $5-$10 per month, therefore premium subscriptions have little upside. For the average consumer, access to 30 million songs don't mean a thing to them when the best songs are played on mainstream radio.
Global piracy control is on the rise, therefore no need to give away music to fight theft; the latter an irrational concept by itself perpetuated by irrational people. Expect more action to come from many honest governments around the world to fight theft of content.
wallow-T Friday, November 09, 2012
The 78 RPM shellac disc, the vinyl LP, the cassette, the CD, and the MP3/iPod ecosystem: each of them succeeded commercially because each of them solved one or more problems for the paying customer.
The current falloff in sales is a problem for the recording companies, but it is not a problem for the paying (or non-paying) consumer!!
Until "the industry" can present a compelling solution to a customer problem -- maybe a problem the customer didn't even know they had -- there's no reason for the customer to buy into some new product or format.
I see lack of customer/consumer focus in so much music biz reporting. The business is so focused on its own problems that it has lost track of why it exists.
Ron I Friday, November 09, 2012
How about Artists Signed TO Spotify, etc. The service becomes the label . . .
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