Good news for Apple, bad news for music labels

That observation is proving axiomatic yet again as news emerges that Apple's iTunes has now leap-frogged Wal-Mart to become the No 1 music retailer in the United States, which is the No 1 music market in the world. According to Ars Technica, Apple has 19 per cent of the music retail market compared to Wal-Mart's 15 per cent. A year ago, iTunes surpassed Amazon for the first time. Now, Amazon is in fourth, Ars says, citing statistics from industry sales tracker NPD Group.

While the report suggests download sales are still surging (at least for Apple), it does point to yet again worrisome news for the labels. NPD Group had been tracking the precipitous decline in physical music sales for some time. In February, it estimated  that "one million consumers dropped out of the CD buyer market in 2007, a flight led by younger consumers. In fact, 48 percent of US teens did not purchase a single CD in 2007, compared to 38 percent in 2006."

So, while everything looks rosy for the sale of iPods and tracks on iTunes, few music execs have reason to smile. These latest figures no doubt will propel talks by the major labels to push ahead with plans to introduce all-you-can-eat monthly fees to broadband users who want access to their catalogues. If a universal fee is introduced, it might just be called the next "iTunes killer." 

Comments

[John Allen]

If teens are 'fleeing' music purchasing, do you really think the prescription for the health of the industry will be to provide for monthly flat fees? Download services like Amazon and iTunes are limiting the damage to record sales, not deepening it.

There's always room for new business models - iTunes have also been rumoured to be looking at flat fees - but I think the music industry is simply going to be less profitable in the digital age. Because who really needs music labels any more? Madonna's just signed her career over to a concert promoter.

[Startled Rabbit]

Why is this bad for the record companies? They still get paid and they also have zero costs for the distribution as Apple covers the bandwidth. Seems like a good thing to me.

[Bert]

I have only just started my CD collection.

I can no longer buy proper records.

My local record shop has closed.

I had a substantial BETA collection which had to be scrapped because tasteless dim-wits went and bought VHS.

I now have a substantial VHS collection which will may soon have to be scrapped in favour DVD (ooops sorry, Blue-Ray).

How many more times are these capitalist filth going to give us this shit?

Please tell the capitalists to put everything back to 1900 and sort themselves out. Then when they have decided on one technology we can get on with it.

I have just had to throw away a perfectly good television because the manufacturers: SONY, would not supply a new tube. The new television - an LCD - is incapable of achieving a true black-level. And this digital nightmare is a disaster: straight lines are like staircases because digital displays can only put a pixel on or off; not in between.

Vinyl and CRT are still way better than all this awful digital nonsense; but the capitalists insist upon forcing second rate rubbish on us and the government goes along with it.

Bert.

[Will]

Haha, great post Bert, I miss the days of waving a candle behind a lithograph, certainly no worries about gold plated hdmi cables back then.

As for the music labels, what a shame they'll be getting less profit for smothering us with over produced tripe pop. I hope its a lonely funeral.

[CS]

why is this bad for the labels?

digital music is easy to buy- i just bought two albums from my desk this morning that i would never have done if i went to a shop.

digital music allows new music through, -look at emusic and magnatune showcasing new artists.

all that it is doing is making the music labels who rip off artists and consumers alike less relevant. good i say.

time to evolve

[Joe Staples]

This is one of many current Times articles on this subject that seem to suffer from what I call the British Hypocrisy Disease (BHD).

Its symptoms are pretty easy to spot; acres of type written by people who only know others who pirate music and other digital material.

Well, let me be the first. I haven't bought a CD in at least 10 years but I have a huge collection of music that I pirated. I very rarely go to the cinema or buy/hire a DVD but I've seen at least 50 current films in the last year. I never buy newspapers but I read them regularly.

I rarely see adverts on TV because I use a TIVO type box and skip through them. I rarely see non-text adverts on web pages because I use Firefox with an advert blocker.

But the future is bright. My local cinema may finally get its act together, get a decent sound system, bring back the big screen and stop charging ridiculous prices for snacks; so that people like me might have a reason to go again. Madonna and her ilk will stop making mega-bucks and do more live concerts. Record companies will go bust (hurrah!).

[Sunil Chauhan]

Speaking as a child of the Internet generation, I’ll admit, along with many others, I download pirated music from the internet without paying for it because:
a. pirate site have a greater collection
b. I don’t have to pay for individual tracks
c. They’re DRM free!

The same goes with movies…I download 90% of my movies because:
a. Hollywood is more concerned with “playing it safe” and cashing in on resurrecting classics…die hard, Indiana Jones, rocky, Rambo…etc
b. Some really cr@p movies have come out lately and after downloading it, I’m actually glad I didn’t pay £7.20 to go and watch it!
c. Why do cinemas feel the need to charge different rates if you’re a student/child or adult…each occupant is still going to fill a single seat, so why not charge a 1 off flat fee?!!

It is for these reasons I download and do not buy…it just seems that the industry is behind and needs to play catch up…the movie/music industry’s best option would be to:
a. Open up its entire catalogue to companies, DRM free and allow unlimited purchase plans as opposed to charging for individual tracks.
b. Advertise more in your movies…for example have an actor drink a coke and then charge Coca Cola, have them drive a BMW and then charge BMW…etc etc

If the media industry wants to stay afloat it should focus its attention on other ways to gain capital instead of fighting pirates. NBC have already launched a service called Hulu which allows users in the US to watch their TV shows in high quality format (far better than YouTube quality) which is funded by advertising. This is a step in the right direction. BBC have launched the iPlayer which again is a step in the right direction. No one knows the right answer to how to stop piracy because no one has come up with the most ideal business model, but instead of fighting pirates, why not learn from them.

[simon mackie]

bert
you are an idiot. Sony no longer may CRT's they are bad for the enviroment and power hungry. Buy a better LCD not a cheap one or if you want black to be black buy a plasma, and if you have only just started buying CD's when did you stop using gas lighting and taking a s*** in an outside toilet get a life.
Sunil you are a thief
would you expect to go to a restaurant try the food and if you dont like it walk out. its people like you who are killing the industry. yes they pay acts far too much money and actors should be on reasonalbe wages not the 20 million payday. but there is no reason to steal.

[Francisco Mogno]

Sirach (Apocrypha), chapter 10

30: The poor man is honoured for his skill, and the rich man is honoured for his riches.
31: He that is honoured in poverty, how much more in riches? and he that is dishonourable in riches, how much more in poverty?

[mease]

old technology is inefficient and takes up space. try to get new ones for better quality and productivity.

welcome to the internet age where information intends to be free for everyone, no restrictions no discrimination. content providers should find new ways of revenue than charging outright for your hard earned cash.

bbc iplayer is a good source of content and free.

[John]

I found the one comment where the person says that they haven't bought music or movies, yet have pirated them, etc rather funny. Basically the person is a thief and steals everything and seems to be proud of it. Ridiculous.

Why do people think that they should just take things without buying them.. Just because they're in digital form? People used to copy tapes/videos, etc but not to the extent they do now because it's much easier to just download something. Does not make it right though!

While I don't think it's a big deal if someone 'tries' a song or something, but then either erases or purchases it (in fact I think that a lot of sales can be made that way).. I think that being pleased with yourself for being an outright thief is nuts.

[max power]

I can't imagine buying many CDs in the future. Artwork and lyrics are great. Documentary DVDs are great, too, but let me download it and take it with me in the car, on the bike trail and in the woods. No way I'm carrying a pack of discs that far.