The State of Digital Music in 2006

wh0pper writes "Designtechnica has an excellent article on the state of digital music in 2006. Digital music accounted for only six percent of total music sales in 2005. Yet even that is a massive increase over the year before, a whopping 194 percent, which is fiscally valuable as the sales of CDs continue to decrease (although even with digital sales, the record labels experienced another downturn in 2005). While the young, usually the first to adopt and adapt to new technology, have been downloading and swapping music for quite some time, there's been a ripple effect into the older, warier area of the population, one that will only increase. Thank--or blame--Apple and its iPod, or any of the many other makes selling like hotcakes in the stores.

Comments

For all you DRM neysayers

[7Prime]

Remember that 30 years ago, we had vinyl and cassette tapes. Vinyl was easily rippable, although "ripping" one meant something a little different back then. Cassette tapes sounded like total crap. If you think about it, even *with* DRM, we've come a long way in quality and ease of copying. And don't worry about compression for the moment, this is just a passing phase while non-lossy algorythms become more streamlined and connection speeds get faster. DRM is a neccessary evil, unfortunately, because no record company, in their right mind, would agree to selling media without it. Thankfully, there are many quick, and fairly painless ways of getting past Apple's DRM if you're really worried about it (I'm amazed that record companies agreed to FairPlay, it's so easy to bypass).

Apple is one step in the right direction.

[twitter]

My mom is a good example of where things are going. I showed her my cheap Ilo player from Walmart ($50 baby) and an Ari Hest Concert from archive.org and suddenly "digital music" made sense to her. If she was not hoplessly hooked on Windoze, I'd set her up with Amarok and the usb-device script and that would be that. That's not the case, so I recommended an Ipod. Even she knows that music+windoze= crashed computer, so the free software may come later to her old laptop which still runs WinME! If she can get it, anyone can.

The RIAA is over. Apple makes it easy for people to spend their money on music but the RIAA way is not the future. Sales are only a small piece of the picture. More and more, reputations are not going to be built on radio play but on web play. Bands that understand this are going to be here tomorrow and the rest are going to look like slaves to greedy pigs. Portable music devices can hold more songs than the average radio station can afford to broadcast. To the user, it's all killer and no annoying adverts. The "Industry" is fighting back with satellite radio and FM crap flooding but it's not good enough. Players like Apple are going to help transition the industry to it's less centralized and less parasitic future. The free market forces and free software will move in and make life better for everyone, especially the artists.

The tipping point is near

[tentimestwenty]

As a record store owner and the webmaster for RecordStoreReview.com I have a pretty good read on where things are going. This gradual decline in physical sales is about to reach the tipping point where the distribution model crumbles and downloads increase exponentially. It might not happen in 2006 but 2007 is very likely. At the store level, there just isn't sustainable profit from physical sales.

Re:MP3 Blogs and Netlabels

[dilvie]

Exactly my point. It's really a whole different ball-game now. I've been playing ball with a bunch of indie labels and artists, and we're achieving some pretty stunning distribution numbers. Some of the top features on my MP3 blog have been downloaded over 60,000 times each. My own music had a quarter-million downloads last month -- and this is for electronic music, where 10,000 record sales is considered a hit.

My friends in Taxi Doll are just an indie group going it alone (as of this writing), and they've managed to got their music into films staring J-Lo and Harrison Ford. They're taking advantage of digital distribution and free downloads to help them get the word out, and they've got plans to expand the strategy in the future.

Why are people still talking about the music industry like it's 1997? Whole genres have broken off from the major outlets, and started hacking it alone. There are tons of indies on sites like Beatport and CD Baby selling digital downloads and CDs with no DRM. Imagine that -- music producers giving people what they want, rather than force feeding them crippled songs.

There's a huge undercurrent in the music industry right now, and the storm is brewing. The old industry is a sinking ship. Some of us have been saying it for years, but the day of reckoning is coming quickly, now.

Re:And no OGG support

[Firehed]

What do you expect? OGG is barely popular even among geeks, let alone in the mainstream. I'm sure that if you asked 95% of iTMS users, they'd be sure they're downloading MP3s. After all, the iPod isn't advertised as an AAC player, is it? They don't care what extension the file is provided it's not distorted (not to be confused with lossy - often times, you won't notice anything missing with lower bitrate versions unless you've heard the original) and it plays on their player. While I'd love to have all of my music in FLAC, few players support it (and more importantly, not mine) and the files are huge with a generally negligably boost in audio quality, and I'm not yet willing to drop a decent chunk of change to get better headphones. Plus the fact that I no longer buy CDs (partly due to availability, partly due to price and mostly because I refuse to give money to my oppressors) means that any lossless codec isn't an option for me. I don't feel *as* guilty buying from iTMS as somewhat more of the money goes to the artist, but if it were up to me (which it half-is), I'd pirate a flac version and then paypal the artist five bucks if I liked it. It's a lot more than they'd get per album regardless.

Smart artists would do something like an oscommerce store (or whatever) where you can buy a flac/mp3 download for, say, 40 or 25 cents, two downloads allowed in case your hard drive dies and you're in the 99% of the world that sucks at backups. Cheaper for us, more profit for them, world+dog-riaa is happy.