Saturday, December 08, 2007

The last chance for Music Industry comes from mobiles

The slump in CD sales has hit record industry profits

The music business has been in decline for the last seven years. CDs are not selling in the numbers they used to, which is a worry for the record industry as well as retailers.

The online revolution took the record industry by surprise and it has been playing catch-up ever since.

"I think the music industry has to accept its fair share of the blame for not acting quickly enough to digital music," said Adam Benzine from Music Week magazine.

"There was a feeling in the music industry around 1998 when Napster first came out, well, there was simply a feeling of bewilderment and confusion.

"What is this thing, how do we deal with it and, more importantly, how do we turn it off? How do we stop people putting music on the internet, rather than how can we monetise this and how can we embrace this?"

Mobile potential

The recording industry is finally hitting back and mobile phones are leading the charge.

CD sales might be tumbling but digital music sales are steadily increasing. Unfortunately digital growth only accounts for a tenth of overall music sales, so they are still not making up for the shortfall generated by CDs.

Downloading music on mobiles has taken off in Japan

There is one territory which is bucking this trend though. Digital music sales in Japan are sufficient to offset the loss made by CDs. In fact, Japan saw a 1% rise in music sales last year. Industry observers attribute this rise to mobile music downloads.

"When you look at advanced markets like Japan, most digital music is already being consumed via mobile phones," said Rob Wells, senior vice president of digital music at Universal.

"Fixed-line services are not as successful as over-the-air-delivered music services to mobile phones."

Downloading via mobile offers the user the ability to browse a store's back catalogue, purchase and download music all via a mobile phone while on the move, cutting out the need to download songs using a computer.

Adam Benzine said: "Pretty much everybody in this country over the age of 12 has got a mobile phone with them, not everybody has got a music device with them, but everybody has got a mobile phone so you've got an immediate captive audience."

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