I haven’t bought a CD in over a year, and I use internet radio (Pandora) or download mixed MP3s from DJs at no cost. To me, music media is free and will continue to be.
The WSJ reports that Sales of music, long in decline, plunge sharply as the sales of CDs continue to diminish:
“compact-disc sales for the first three months of this year plunged 20 percent from a year earlier,”
which sadly is the cash cow:
“(cds) account for more than 85 percent of music sold”
It doesn’t end with CDs, but also resulted in the closure of brick and mortar companies that failed to shift to a Web Strategy:
“including the demise of specialty music retailers like longtime music mecca Tower Records. About 800 music stores, including Tower’s 89 locations, closed in 2006 alone.”
Where are the ears getting their music fix? From P2P networks, (both illegal and legal) as well as traditional computer companies that have figured out how to tap into that market (Apple’s iTunes).
Web and Media Strategies for the Music Industry
Music is free, trying to control it will always be a challenge going forward, the internet has dropped many of the barriers, and any speedbump is just a slowdown for the savvy consumer. I would suggest for artists and labels to figure out to embed monetization and market value into the song, some ideas:
1) Product Placement within the song: this has been done by many rap artists since the 1990s. The most popular drink, clothing, and car is mentioned in these songs, spurring a culture shift in consumerism. This is a sponsorship model which could lead towards monetization.
2) Many music artists know that the money is not made from CD sales, but from the tour, merchandise, and other auxiliaries and accessories. Bear with me, here comes the Web Marketing angle:
3) Viral Web Marketing play: Artists could deploy a viral widget that web users can place on their social network or blog sites. For every play, artists could give money to the site owner or blogger, in return for advertising sales of the two points mentioned above.
4) Is DRM a completely viable solution? One bootlegged copy on a college campus, and it’s completely gone.
I’ve some other ideas, but I’m not quite willing to publish them here in public yet. If you’ve some ways to help salvage this industry, so they can harness the web, leave a comment.
Update: Dan Blank has some really great observations and analysis on this changing industry, this quote sums it up “Music Hasn’t Changed, But Everything Around it Has”