Does increase spending in digital music forecast the death of CDs and Records?

Music is sentimental to the individual thereby appealing to a listener’s inner being and emotional requirements. This has been true for decades and centuries just as much as the changes in technology have required a change in deliverance of the same service; though with a dose of alternative options such as classical, rock, blues, country, hip hop and so on. In an article written by Mark Sweeney and published in The Guardian on Thursday May 31, 2012, the BPI that represents the British music industry reported that spending in digital music in the first three months of 2012 has outpaced traditional CDs and records for the first time with digital music revenues accounting for 55.5% of the revenues while sales in CDs fell by 15%. Britain is a significant market in the consumption of digital music worldwide and such changes could be the case in the US which is on the same digital transformation boat.

The question I will beg to ask is whether this increase in spending in digital music formats such as downloaded tracks and paid for subscriptions will imply the end of CDs and records. this might be an overstatement but for an industry that is fast moving into the technological space and generation driven, record and CD selling businesses will hurt immensely if their goods become collectibles rather than household products. Record labels and Band Managers have to figure out a way of making that quick sale of their album in CDs and then worry about singles sales later. A good example of such a strategy is the new Madonna “MDNA” album that Live Nation sold 420,000 copies in three weeks. These albums were bundled with Madonna’s summer 2012 concert tickets of which 600,000 had been sold. The most interesting piece of this deal is that out of the 420K albums sold, 180K concert ticket buyers did not need the album nor downloaded the songs through the link provided. Is the industry pushing unwanted product to consumers? That possibly adds more validity to the increase in digital download and the fall in CD and record sales in Britain this year.

Personally, increase in digital download and fall in CD or record sales could mean a huge industry shift from a focus on providing the listeners and fans with more music to a focus on delivering channels of convenience to access these musical products (audio and video alike). From the two articles reflected above, it can be deduced that consumers want to experience their favorite songs and be able to access it wherever and whenever they need to. That said, I applaud the recent decision made by Microsoft to discontinue the Zune and focus on X-Box Music. The X-Box already has Kinect, a Microsoft dance product which makes the musical experience more engaging for the consumer. I do hope Microsoft links its Kinect to the extensive library of X-Box Music to give a richer experience to the consumer. Even though the X-Box is not as portable as its competing IPhone, it offers a greater environment for the artist’s song to reach a wider audience if it was bought through the X-Box Music. Hence, a more viable way to compete with ITunes.

By Gerard Ngwang

References:

http://www.guardian.co.uk/media/2012/may/31/digital-music-spending-bpi

http://www.forbes.com/sites/rogerfriedman/2012/04/21/madonna-mnda-180k-concert-ticket-buyers-didnt-want-cd-theyd-bought-anyway/

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