Sunday, March 07, 2004

Record industry losing grip

From Chicago Tribune by Greg Kot an article on the continuing demise of the traditional record industry:

"Josh Bernoff, a Forrester Research analyst, told music and technology executives at the MidemNet conference last week in Cannes, France, that music downloads will make CDs obsolete in the next five years, and predicts that half the companies selling digital songs online will fail this year. Companies such as Wal-Mart, AT&T and Coca-Cola, which introduced an online download service in Great Britain a few weeks ago, are rushing to sell digital tracks that can be played on computers, cell phones and other portable devices. The mantra in the music business has become "dirt-cheap storage and the ability to access and play any type of music anytime, anywhere," in the words of Mike Dreese, the CEO and founder of Newbury Comics, a New England record-store chain.

That's why some industry insiders see a much longer shelf life for compact discs than Forrester's Bernoff predicts. Flanders notes that Columbia House was still selling $5 million a week last year in physical music product. Apple's much-touted iTunes store, which allows consumers to download songs for 99 cents, made $30 million for the entire year. What's more, CDs are morphing into something more substantial and consumer-friendly. Performers such as Neil Young and Metallica are beginning to stock their CDs with bonus material -- DVDs, access to songs and videos at Web sites, documentary footage -- in an effort to entice fans to buy the physical disc instead of downloading the songs."

Guess it's just a matter of time...


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