The music industry still isn’t dead, contrary to years of bellowing from top executives.
In fact, according to analysts at Ovum, the digital music business alone will be worth $20 billion by the time our calendars reach 2015, if a Mayan prophecy hasn’t literally killed us all first. The report says subscription based services will be a tidy earner in the industry and behind strong growth, according to forecasts.
Although the predicted figures mean a compound annual growth rate (CAGR) of over 20 percent from now until then, the industry is still not doing enough to maximise profits and revenues.
Former execs at global record labels are happy to talk in the pub how the music industry is still strong and despite all the squawking about piracy, it has not even seen death row, let alone been sentenced to the electric chair.
According to Ovum, the problem with digital music is that there is too much free music doing the rounds.
Not the free music you’d find on The Pirate Bay or Rapid Share, but free internet radio like Pandora or Grooveshark, or indeed label-approved “Freemium” models such as Spotify. These services are offering freedom to get fat from the music trough without themselves maximising advertising, or even premium subscription revenues.
Subscription services, says Ovum, will see a CAGR of over 60 percent leading from 2011 to 2015.
The benefits outweigh the traditionalist’s argument that holding a CD is just a nice thing: they will realise that having access to millions of streamed songs for the cost of just one CD a month isn’t something to be sniffed at.
While paid-for streaming is on the up, it is having a negative effect on legitimate music downloads through stores in the US. Ovum believes that it’s not long before that trend arrives in Europe.
Could it be fair to say that the music industry still hasn’t woken up to digital? It could be turning a very respectable profit already, had it taken the initiative on adopting newer models for consumption while pushing its own agenda.
Either way, the music industry certainly is not dead, and it’s hard to lend support to claims from the likes of the RIAA that it was ever, seriously, on its death bed.