Did Digital Kill the Radio Star?

[Todd Klein]

<div class='os_post_top_link'><a href='http://www.nytimes.com/2011/01/24/technology/24music.html?_r=1&ref=technology&pagewanted=all' target='_blank'>http://www.nytimes.com/2011/01/24/t...&pagewanted=all</a><br /><br /></div><p><em>"The International Federation of the Phonographic Industry, a trade group based in London, said last week that sales of music in digital form had risen only 6 percent worldwide in 2010, even as the overall music market had shrunk 8 percent or 9 percent, extending a decade-long decline.&nbsp;</em><em>In each of the past two years, the rate of increase in digital revenue has approximately halved. If that trend continues, digital sales could top out at less than $5 billion this year, about a third of the overall music market but many billions of dollars short of the amount needed to replace long-gone sales of compact discs. &nbsp;</em><em>&ldquo;Music&rsquo;s first digital decade is behind us and what do we have?&rdquo; said Mark Mulligan, an analyst at&nbsp;<a href="http://topics.nytimes.com/top/news/business/companies/forrester-research-inc/index.html?inline=nyt-org" title="More information about Forrester Research Incorporated">Forrester Research</a>. &ldquo;Not a lot of progress.&nbsp;</em><em>We are at one of the most worrying stages yet for the industry,&rdquo; he continued. &ldquo;As thin</em><em>gs stand now, digital music has failed.&rdquo;</em></p><p><em><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/wpt/auto/1295929203.usr112503.jpg" style="border: 1px solid #d2d2bb;" /></em></p><p><a href="http://www.nytimes.com" target="_blank">The New York Times</a>&nbsp;reports <a href="http://www.nytimes.com/2011/01/24/technology/24music.html?_r=1&amp;ref=technology&amp;pagewanted=all" target="_blank">this astonishing&nbsp;indictment</a> of an industry that's produced iTunes, Pandora, Spotify, Lastfm and several other services with millions of engaged worldwide users. &nbsp;Yes, digital killed the CD business by undbundling songs from albums, and by extension struck a fatal blow to bricks and mortar music retailers. &nbsp;Yes, piracy is a problem that must be managed if artists are to be supported. &nbsp;But to declare that an entirely new medium, digital delivery of music, has failed because the established players have suffered economically while consumers have experienced a technology tsunami of music discovery, sharing, choice, and purchasing models seems to put the cart before the horse.</p><p>Tell me, has digital killed your music experience?</p>

[gdoerr56]

It's a lot like saying that the internet as a news delivery service has failed because newpaper publishers have lost a ton of revenue.

Of course digital deliveries have depressed music sales. We're now buying or renting the music we want rather than buying a $15 CD to get the two to four tracks we want.

If the publishers were smart (and we know they're not), they would change their business model to allow artists more control over the publishing process and "sell" their value add as image management, marketing, promotion, licensing and distribution.

What will likely happen is a completely new set of companies will emerge that will embrace digital delivery and finally kill the old model.

[Dyvim]

It's a lot like saying that the internet as a news delivery service has failed because newpaper publishers have lost a ton of revenue.
Exactly. Digital delivery has revolutionized several industries and in all cases you end up trading analog dollars for digital pennies. e.g. how Craig's List has decimated the classified ad industry in traditional print media. Craig's List makes much less money than the classified ad industry used to make, but they still make millions of dollars.

I bet people today are listening to and discovering more music than ever before, largely thanks to digital music; the music industry just isn't making as much money off of it as they used to and they're pining away for their analog dollars (but those will never be coming back).

[Jason Dunn]

If I fire up my Zune software and sort my albums by release year as a rough way of seeing how much music I bought each year - though this isn't entirely accurate because I don't always buy music the year it was released - I can see a slight decline in the number of music I bought from 2008 to 2010 versus 2005 to 2007, but a definite decline in the number of songs because I now purchase individual tracks more often than whole albums. So my buying patterns have changed, but not my consumption - I still listen to music a lot and buy it regularly.