Tuesday, May 29, 2007

CD market goes kaput

After seeing sales drop by 20%, the US music industry now expects this Christmas to be the final big holiday season for CDs (thanks, Helger!). A drought in new creative talent is also causing problems.

In response the music industry is being forced to innovate, dropping demands for unpopular DRM restrictions on downloaded tracks and diversifying into areas such as music publishing, merchandising and advertising. It would be in a much stronger position if it had made these moves a decade ago as the Internet and other new digital technologies really took off.


tmoorer said...

You hit right on the mark. I think its incredible that the music industry (major labels) waited this long to jump into the tech area. They will continue to play catch up on a long term basis and may never recover.

I recently had a conversation with a few people in the music business and we all agree that everything is going back to the Indies. Good blog!

Ian Brown said...

Thanks! I don't think that a restructuring of the industry towards smaller bands is a disaster. Britney, Madonna and friends can probably cope with one or two million dollars a year less. The innovation of the small indie labels is now paying off for them.