Tuesday, November 17, 2009

Digital Music Infographic


I've been following the pace of digital music downloads for a few years now.  The above infographic was floating around last week {HT:  RosieSiman}.  I crunched the compound annual growth rate {CAGR} for digital's 2007-9 share of the US market and it was 21.6%, which isn't surprising given other reports {ifpi}.  It should be noted that the US and Japan lead digital consumption of music, with the rest of the world lagging.

I think users still get value from CDs {and dare I say vinyl}, explaining why physical music is still around.  The music industry is still figuring out how consumption works in the digital age and I've seen these questions bandied about over the years::

  • Is the music a "loss leader" and the true value is in the live performance experience?
  • How much do and how many consumers really care about packaging/artwork and the symbolic value of possessing music?
  • How should labels offer different products to different segments of consumers?
  • Do consumers think of physical and digital music consumption differently?
  • What's the optimal pricing scheme?
  • How should piracy and intellectual property {IP} rights be treated?
  • Will Apple and iTunes ever iron out the DRM and usability issues to allow users to manage their music that maximizes the user experience?

These are interrelated issues that are often context dependent, but I think there are two key issues that need to be resolved::

  1. Which business models really work and what is being bought/sold {MP3s, CDs, artwork, ancillaries/merchandise, concerts, etc.}?
  2. How should what is being offered be priced?

Back to the infographic, I think what's telling is how when iTunes introduced variable pricing, the average number of monthly transactions increased from about 2.4 to 3.4.  {The average transaction value was $7 in QI/II of 2009, which has room for improvement}.  I think the industry really needs to examine the role of price, particularly downwards, and finding ways of better enhancing value for consumers.  I honestly believe consumers are perfectly willing to pay for entertainment content in all of its forms {not just the music itself} because music gives people meaning and identity.  It just needs to be priced right and made easy to obtain.

Twitterversion::  Infographic from Mint via @rosiesiman serves up stats. on digital music in the US. What should be the next steps for the industry? @Prof_K

Song::  "Dance Anthem of the 80s"-Regina Spektor {viral video, summer 2009, released on MySpace}

regina spektor | MySpace Video

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