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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.
The only thing that surprises me is how long this industry fought teeth and nails against this. Even now, they are only embracing the online distribution of digital media because they are forced to. Steve Jobs kicked open the online music market and he did the same again with online distribution of videos and now full features. It always takes a visionary with capabilities to take that first step - a smaller company would have been squashed early on. In some ways it's discouraging for small entrepreneurs like me because it paints a picture: don't you think I wasn't dreaming about an iTunes like music store a long time ago? Well, along with power and influence Steve also brought along the iPod, which was another puzzle needed to that piece. He basically had to put all the pieces together, singlehandedly (is that a word?). That's his genius and his vision and that's why he's cleaning up right now. Had I gone to Sony with a software just like iTunes on my laptop 5 years ago they would have just laughed at it. It sometimes takes a lot more than vision and talent to realize a business opportunity, some are tougher to crack than others.
The same can be said about the video distribution business - without Jobs and iTunes we'd still be in the dark ages - just look at the ridiculous blunder of Sony and the PSP - talking about not being able to see the forest before the trees! And in the case of Sony - they even had a content library they could have thrown into the equation. Well, I guess those higher rank managers must get paid those multi-million for their smashing good looks - can't be the types of decision they make or their vision...
I always thought that CDs were digital. Now I hear that digital music only accounts for six percent of music sales? I knew LPs were making a bit of a comeback, but I didn't know it was that big. Everyone must be really enjoying that "warmer" sound.
You need an original CD to rip into Apple Lossless. And if you rip anything from an original CD, there's no DRM whatsoever.
Etiquette is etiquette. He kills his mother but he can't wear grey trousers.
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.
Quality over Quantity...
While Baby-Boomers are now part of this market it is still dominated by younger people who apparently don't care so much about quality. It seems the way people listen to music is changing parallel to the way the music is being distributed. People can now carry so much music in their pocket that they listen to music while doing anything and everything. Music is in essence background music for their lives. For that reason "quantity" is king for these people and "quality" is very secondary. Gone are the days where "listening to music" meant putting an album on in your living room and sitting through the whole thing while doing little other than enjoying the music.
So for that reason I think your point of view is unfortunately a minority, and a shrinking one.
-Oliver / TreasureTunes.com