MP3s are good for music biz – Forrester
Pigopolists should monetize P2P networks
Forrester Research has surveyed a thousand music customers and concludes that MP3 downloads are good for the music business.
Twenty per cent of those surveyed - two groups Forrester describes as "music lovers and music learners" - buy 36 per cent of CDs, and these enthusiastic downloaders said MP3s had no effect on their CD purchasing.
"The idea that digital music is responsible for slump is completely false," concludes Forrester analyst Josh Bernoff.
The news will dismay the entertainment pigopolies*.
Forrester attributes the 15 per cent slump in music sales to a number of other factors. The economy is in a slump, there's much more competition from games, from DVDs - which saw an 80 per cent rise in sales - and most interestingly - from the "limited playlists" rotated by commercial US radio stations.
Forrester notes that one company, ClearChannel controls 60 per cent of radio, so new artists don't get the opportunity to be heard.
"Playlists are very short," it notes.
And that's how the Recording Industry of America Association (RIAA), the music Pigopolists' trade association, likes it. It has lobbied hard to tighten its grip on alternative promotional channels recently, forcing many small webcasters off the air by imposing royalties that traditional radio stations don't have to pay.
Forrester is upbeat about the industry's prospects - if only they were smart enough to embrace downloads. But Forrester concludes that it is essential that citizens have variety - "more than two or three labels worth of choice" - and that their right to control music, to copy and burn it, is preserved.
"Labels have to stop focussing on distribution, and concentrate on promotion, and new accounting systems," says Bernoff.
"There's a chance that labels can monetize peer-to-peer networks," he adds.
Forrester summarizes its conclusions here.
*Register Dictionary Definition: [n,pl.] "market condition formed by several extremely greedy oligopolists." Adopted by Dave Marsh, who was nice enough to credit us.