Remembering back to the days of the 78s that scratched and broke easily, the upgrade to vinyl, then LPs, 8-track and audio cassettes, then CDs. CDs were once reasonably affordable and those who couldn't afford them could copy them on their computer from someone who had bought a copy.
We then saw file sharing on computers, which became illegal because copyright laws were being violated, but it was less often the musician's complaint than the middlemen raking money off someone else's talent because the music was being heard. Now YouTube has taken over that function. Violation for some is less relevant than exposure that ultimately makes more sales because the musicians can post their own music. The technology has become quite simple.
There have been many more recent changes that are clearly observable for anyone who wants to look for them. By 2007, CD sales were down 20% from the preceding year. The Wall Street Journal notes that CD music sales are down 20% from the same week a year ago. The seven year decline in CD sales doesn’t look to be turning around anytime soon.
Legal music digital download sales are increasing by 50% or so a year; overall industry revenue is still down 25% from a year ago by some estimates.
The faster music labels realize their massively profitable days are over, the better it will be for them, as well as the bands they represent and us, their customers. Digital music sales are not going to make up for lost revenue. Suing their customer base is not going to make up for lost revenue. In fact, absolutely nothing is going to make up that lost revenue. The industry, revenue-wise, is going to continue to shrink.
The problem is that their main product, recorded music, has a zero marginal cost to produce. It’s so cheap to make that consumers can actually make it themselves. And they do. A billion songs a month are downloaded, mostly illegally, from P2P networks.
As the marginal price of recorded music continues to fall towards zero, its natural price, bands will need to make money elsewhere. Live concerts will become more and more popular, and will be the largest source of revenue for many artists. Recorded music will be used to promote those live events. Popular artists will still make a very, very good living. Others will have to decide if love of their art is enough to keep going.
In 2007, the NY Times reported a 9.5% decline in album sales. "This is the end of the music industry as we know it," said Forrester principal
analyst James L. McQuivey. No longer will producers fill albums with not-so-great tracks because one on the tracks is not sold singly. Today one can go online and download almost anything.
Since radio stations caved to the exorbitant rates to be paid for playing copywritten songs, gone are the local musicians who used the radio to get heard. Now local musicians bring their own CDs to gigs and sell them directly to the buyer.
For those of us who don't like to be tuned out from the world by headphones, there are the wonderful free Internet music stations which will play your favorite musical genre and random sets. Try Pandora, or Accuradio.
This commentary barely scratches the changes occuring regarding the delivery of music to listeners. Cable stations are offering many stations that carry both audio and video of many genres. Actually, unless you choose not to download your favorite new song, you can hear music all day and not buy a CD.
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