The article by Charles Arthur, analyses the impact of the iPod on the music industry and where it leaves the music industry in the future. Article link. www.theage.com.au
It has become evident that sales of digital music downloads are declining along with CD sales, which leaves the music industry grasping for the release of new technologies such as the iPod, to leverage a small boost in sales for digital download music.
In April of 2003 the Apple iTunes store was launched which showed some gain in sales for digital downloads. In 2009 CD sales were devalued by a $US1.6 billion while digital downloads gained less than $US400 million according to a spokesman from the International Federation of the Phonographic Industry.
Mark Mulligan of Forrester Research suggests in the past when CD replaced vinyl they would see a hockey stick growth in sales. At the time of when digital was coming in as a replacement for CD, they were asking if they would see a similar pattern appear from digital downloads, instead the pattern displayed the release of niche technology.
There was always going to be a struggle with getting customers to pay for digital downloaded music ever since the Napster saga. The music industry did not foresee the amount of people it was going to offend by shutting down a bank of free music that had a huge community base. Imagine shutting down facebook today and then telling the loyal members tomorrow you can join back up but you have to pay. Still the fact remains, Napster was promoting blatant piracy, but piracy has always been an issue well before Napster.
What I liked about purchasing a CD was having that tangible product in my hands, but you can’t look past the ease of mp3 players and shopping online for music. When a majority of online Music stores adopted an ‘a la carte’ method of downloading, it made purchasing music so much more flexible and dynamic. This ‘a la carte’ approach may contribute to the negative effect on recorded music revenues, but the flexibility is a big plus for the consumer.
Some of us may remember making a mix CD (or tape for all those gen X’s) of our favourite songs and playing it to our friends or cranking it in the car stereo. Some of us spent our spare time and enjoyed doing this, now that task is achieved quite easily with the advantage of our online stores. No need to buy a blank CD or tape whilst sifting through a pile of CD’s, we just punch in an artist or track name in the search bar and we have a world of music at our fingertips, with no geographical boundaries.
Although it appears that digital music sales are impacted by niche technology, I do not believe this is a single motivational factor for consumers to purchase digital music online. Sure the technology is great, we can store thousands of songs into a tiny device and make mix song lists on the fly, but speak to anybody who enjoys music and ask them if they purchased more digital music online because their new iPod plays music better! I believe it comes down to getting that new toy and playing with it for the first time. Like any new gadget or device, the first day we get it we want to play with it, we want to explore it, we want to load it up with as many apps, songs, photos or videos as possible, just so we can show our friends “Hey check this out”.
I think the music industry requires a new approach on how they market digital downloads. Radiohead have been great pioneers of pushing the whole online music arena to new levels. By allowing anybody to download their 2007 album “In Rainbows” and pay an amount the customer saw fit, Radiohead still managed to sell over three million copies worldwide on both digital and CD. It is this forward thinking approach which may need to be adopted by the music industry.
It would be interesting to see a community that is built around online music stores that is integrated with social media sites, such as, facebook and Twitter. If I were looking at purchasing an album or a few songs from iTunes or Amazon, it would be great to see within the site’s interface if any of my facebook friends have purchased the same album or songs. Or wouldn’t it be great to build a digital mix ‘tape’ where all of your facebook friends have contributed in voting for the tracks. By integrating online music stores and facebook together, a bridge is built between one of the biggest online music libraries and the biggest social networks in the world. These two elements go hand in hand, ‘social’ and ‘music’, after all this was the very foundation on which Napster was built on.
Although the music industry is in a terminal decline which appears is related to the sales of the iPod, I still believe there is always a place for music stores either online or bricks and mortar. I think by relying on the release of the new iPod to help boost dismal sales, is the wrong way for the music industry to do business. This approach is clearly not delivering results. Issues arise such as being locked in with the Apple brand, which puts Apple in the driver’s seat of a large segment within music industry, not to mention the customer being restricted to Apple’s desired music format and products. It is a huge commitment that would see the music industry playing second fiddle to the other mediums available on Apple products which are soaring in sales.