Thursday, June 19, 2008

Legal Music Downloads Will Be Bigger Than 'Piracy' As Major Labels Slowly Wake Up To Digital Marketplace

By Darryl Mason

Paid digital downloads have exploded in Australian in the past few years, from $100,000 in 2004 to an estimated $100 million this year, about 1 in 5 of all recorded music sales.

By 2013, a new report predicts, digital downloads will be responsible for half of all music sales. But, to no great surprise, record companies are still not prepared for the next stage of the digital music revolution :

...record companies' hip pockets were "seriously hurting" and they were struggling to find ways to fight the rise.

Individual artists were better at handling the changes, benefiting from merchandise sales and touring.

"Having initially fought downloading, rather than looking at ways of legally exploiting and profiting from it, record labels are now finding themselves playing catch up...."

...the report says legal downloads would start to outpace illegal downloads as legal options became cheaper and more available.
There's no mystery why CD sales in Australia are falling.

Charging more than $30 dollars for a CD disc and jewel case is absurd, particularly now teenagers know how much those materials actually cost (less than $1 each), unlike the days of vinyl records.

The vast majority of music lovers who carry their sounds with them use MP3 music players.

When you buy CDs that are blocked from being copied by terrified music corporations, you give up on CDs real fast.

Nearly every song recorded in the past few decades is now in a digital format, somewhere on the web. But options to browse and legally buy vast realms of back catalogue music in MP3 format is limited. Except when you go to the 'piracy' sites that are now showing music corporations how huge the digital marketplace actually is and how to build new digital business plans they should have developed years ago.

The music industry isn't dying, but the long and often times criminal strangle hold the majors had over the marketplace (record stores, distribution) has been broken by the digital music revolution.

The vast, vast majority of Australians now raiding entire discographies of their favourite old bands for free at The Pirate Bay and MiniNova (both sites stay high in the Top 100 most popular websites used by Australians) are not criminals, and they should not be thought of as such by record companies. It is a simple fact of the marketplace that the more music a music lover hears, the more they spend on music.

So-called music 'piracy' has actually broadened the marketplace and audience to which record companies can now pitch their products. But they have to make the products worth buying.

It may well be true that an entire generation of children believe that "music is free", but that doesn't mean they are not buying music, or won't buy music when they've got cash to spend.

They won't buy a $25 CD, but would they buy a $30 CD that had a beautiful poster-sized piece of fold-out art (like an old double vinyl album cover), a couple of nice prints of the musician or band and a memory stick packed with extra tracks, videos, remixes, raw master recordings? Put it this way, they are more likely to buy the $30 pack than the $25 extras-free CD.

The music industry, like the movie industry, has to adapt to the digital marketplace that already exists, not try and bust it apart with legal threats (they can't win that war) or through fan-infuriating levels of control over the digital formats of the music and movies they release.

When people hear something they like, they want to share it with friends and family. It has always been this way with music, as it has been with all story-telling.

There are more music junkies in Australia than ever before, with nearly every one of them carrying their favourite tunes with them in their music players, in car stereos, in their phones.

The music industry should be rejoicing that the digital marketplace is so huge (through little effort of their own) and so incredibly easy to access and to sell music to. But the makers have to offer the buyers something a bit more special now than a plain old CD.

They have to give the customers numerous reasons to pay for the music they want to listen to, and share; a package they cannot download from The Pirate Bay, something physical, unique, beautiful. Something the music fans simply have to own.

Blaming music lovers for not buying products they're not interested in buying is ridiculous, and utterly self-defeating.

Music 'piracy' is not destroying the market for music, it's rapidly expanding it. The explosion in popularity of live rock across Australia owes something to the mostly illegal digital music sharing amongst teenagers in the past five years, particularly through social networking sites.

It's now up to major players of the Australian music industry to find new and innovative ways to sell that music (in various formats and packages) to the customers who want it, and it's time for those same major players to realise that file-sharing will lead to an even bigger audience to sell to, if they are actually selling, at reasonable prices, what the people want to buy.