ON A MUSICAL MILESTONE

STORM CLOUDS AHEAD

As someone who's followed the commercialization of the Internet for 15 years, it was good to finally see this milestone on a long road, well-described in this New York Times piece:

"Atlantic, a unit of Warner Music Group, says it has reached a milestone that no other major record label has hit: more than half of its music sales in the United States are now from digital products, like downloads on iTunes and ring tones for cellphones..."

It's bitter-sweet news for the industry with many clouds on the horizon*, as the article goes on to explain:

"With the milestone comes a sobering reality already familiar to newspapers and television producers. While digital delivery is becoming a bigger slice of the pie, the overall pie is shrinking fast. Analysts at Forrester Research estimate that music sales in the United States will decline to $9.2 billion in 2013, from $10.1 billion this year. That compares with $14.6 billion in 1999, according to the Recording Industry Association of America.

As a result, the hope that digital revenue will eventually compensate for declining sales of CDs — and usher in overall growth — have largely been dashed..."
"...In virtually all these corners of the media world, executives are fighting to hold onto as much of their old business as possible while transitioning to digital — a difficult process that NBC Universal’s chief executive, Jeff Zucker, has described as “trading analog dollars for digital pennies.”

A long way to go for many industries, with far less reward...but the benefits for consumers surpass the old way of doing things by a wide margin.  So in the larger scheme of things, it's generally a good thing.
*Image source.

Comments

[Alex Tolley]

makes you wonder what the newspaper industry would be worth if you could similarly unbundle the product like iTunes does for CDs.

What might the WSJ be priced at without the opinion pages, personal journal etc and just stuck to the business and markets sections - 25 cents? What if you could just buy the major front page stories?

Other papers are even more exposed - USA Today, LA Times.

Pricing a product for the parts the consumer actual wants rather than as a package that the producer wants to sell is going to have a devastating impact on these traditional bundlers of content and advertising.