Feeds

Last Xmas for CDs, please, researcher tells music biz

Gartner demands freedom from compilation albums?

High performance access to file storage

Market watcher Gartner is playing Scrooge for the music industry - or at least that part of it that is still in love with the CD as revenue generator.

The research company this week called in the music biz to leave this old optical technology behind - the CD has been on sale for more than 26 years - and fully embrace downloading instead.

Indeed, it said, it's that insistence on sticking with the CD that's preventing music companies make the most of the online sales opportunity.

"By propping up the CD business, rather than fully investing in online distribution alternatives, the major labels and the larger music industry have neither succeeded in stamping out piracy nor done much to recreate the business models of the old ‘record business'," said Gartner's Mike McGuire.

"Music labels should... move CDs to an on-demand publishing mode," he suggested.

Look at the numbers. In 2007, online sales yielded 23 per cent of music revenues in the US, though only 15 per cent throughout the world as a whole. This year's numbers aren't in yet, but they're clearly going to show both figures rising sharply. Since 2005, downloads have gone from nine per cent of music revenues to 23 per cent last year, and it's hard not to see a similarly sharp increase between 2007 and 2008.

CD sales have declined over the past three years by the same amount. That's left labels struggling even harder to forecast demand so that they can get the right number of CDs manufactured, packaged and distributed. It's Gartner's contention that they haven't done so too well. While that many not have mattered in the 1990s - retailers would 'soak' up the excess units on their store shelves - it has now become a real liability.

Contrast that with downloads where, once the source file is encoded, production costs cease no matter how many or how few are sold. Put the money wasted on CD over-production and lost through under-production into marketing online music and the business will blossom.

Throw in the ability to better monetise back-catalogue - which the labels have still to fully embrace, though that may be as much down to Apple and iTunes' willingness or ability to load up the servers with limited-interest content - and the industry can drive down costs, lower the price of entry for consumers and beat the pirates that way.

With an all-digital approach, labels are free to sell through almost any online outlet, from iTunes to social networking sites to - heck - irreverent technology news sites who happen to mention a track or an album in a review.

Now there's a thought... ®

Music Player Reviews...


Sony Walkman S

iPod Nano

Samsung Q1

iPod Touch

SANS - Survey on application security programs

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
Number crunching suggests Yahoo! US is worth less than nothing
China and Japan holdings worth more than entire company
prev story

Whitepapers

SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.