‘Burgeoning’ online music -
We see frequent Ra Ra Way to Go stories on what’s often called the ‘burgeoning online music market’.
However, there’s not much substance to them and actually, record label (and other) efforts to capture the online music market have so far met with a noteable lack of success, the many and various major media reports to the contrary notwithstanding.
On the one hand, you have sad failures such as the music industry joint ventures pressplay (now owned by Roxio, Napster II’s parent) and MusicNet (Bertelsmann, Time Warner, EMI Group and RealNetworks)launched in 2001.
On the other, you have the fast-growing list of Corporate Biggies such as Coke, Wal-Mart, HP, et al, who are desperately throwing up (we use the term advisedly) sites as fast as they can go.
But their offerings are limited, over-priced and narrow and in reality, they’re not genuine music sites. In some (most?) cases they’re loss leaders, as Apple boss Steve Jobs has admitted more than once, or A decides to ‘bring music to the masses’ because B has just done it – the Lemming Syndrome in action.
Apple’s iTunes is regularly lauded as being a raging success. Not even nearly. Its offerings aren’t what you’d call exciting and the labels must have seen Steve Jobs coming. Ninety-nine cents a pop? No wonder Jobs says he’ll be happy if Apple can break even on iTunes.
"The market is growing fast for sure, but new markets take time," says Charles Grimsdale, chief executive of Britain’s OD2, which he co-founded with Peter Gabriel, quoted in a Reuters story here.
Not at all incidentally, OD2 is in bed with Microsoft and has licensing deals with all five of the Big Five music labels – with a catalog of a measly 260,000 songs.
In the meanwhile, the "emerging download market offers a glimmer of hope for record label executives who have struggled for years to thwart free file-sharing services like Kazaa," it says.
"I have to believe electronic distribution of music will be an increasingly important part of the business for record labels, but unfortunately I don’t think this is an instant cure," Grimsdale is also quoted as saying.
Still, "the volume of downloads is growing 25 percent month on month, Grimsdale said, which would mean download sales should grow more than three-fold in 2004," says the report, continuing: .
"The more mature U.S. market is growing even faster. American music fans purchased 30 million download tracks in 2003 as online stores such as Apple Computer’s iTunes proved a big hit with consumers."
For OD2, "which licenses its download service to 30 European retail and Internet partners including HMV and Microsoft’s MSN, the volume of downloads picked up in August when it introduced through MSN a tariff scheme allowing users to buy downloads without a subscription," says Reuters and, "Our sales increased in some cases as much as 900 percent at that point," Grimsdale said.
Back in the USSA, iTunes and Napster II are lining up for a European invasion and "Grimsdale acknowledged competition will be much more fierce in 2004," it adds.
"Industry officials expect the big U.S.-based online stores such as iTunes and Roxio’s Napster will make their European debut by summer."
