Atlantic Records have reported that revenue from digital media (music downloads via sites like iTunes, ring tone downloads etc.) have made up 51% of their 4th quarter revenues. The news that these new forms of media distribution have become so prominent will not surprise most of the MTV generation, but seems to have come out of the blue to some inside the music industry…which is a surprise in itself. NBC Universal CEO Jeff Zucker has reportedly called the transition “trading analog dollars for digital pennies.”
With the success of Radiohead’s “In Rainbows” release on the basis of a pay-what-you-want approach, the growth of the iPhone expanding access to digital media through a number of impressive applications and the regular case of new singles being released earlier on music download sites than they are in physical formats, the development of the digital market sector should be clear.
For some labels to be passing off this transition as a drop in the ocean when compared to physical sales is quite puzzling considering how much can be saved in distribution and production by utilising the digital route. This may have to change though as reports predict that music sales will fall $0.9 billion over the next five years to $9.2 billion. These testing times may push those labels that have been afraid to jump, causing them to review their approach and begin to embrace the digital age.
Source:
