This year, listeners will spend $256 million dollars on legitimate sites selling downloads, like I-Tunes. In 2005, $541 million. By 2007, $2.1 billion. That's the new music business. Goodbye CDs, hello digital media. If people are downloading files and getting tracks, is this the modern equivalent of the 45? Not quite, but we may be witnessing the end of the album era.
The current legal downloading landscapes includes several major players, notably Apple, who has two thirds of the market thanks to the success of the I-Pod, Rhapsody, a division of Real Media, a legal version of Napster, Music Match, and a few others. These services are primarily huge databases of music. If you have the time, the bandwidth, and know what you seek, they're pretty cool. However, most of the music comes from major labels. Although CD-Baby has an agreement with I-Tunes, there is very little in the way of independent music on these services.
I-Tunes and Rhapsody both have featured content, although its most likely pop music. Hey, these folks aren't altruistic, they just want to make money and Jay-Z sells a lot more tracks than Eric Dolphy. When Jazz is featured, it sells, yet selling five hundred downloads a week won't finance any revolutions.
This whole thing is just beginning, although the "big guys" are already trying to muscle in and get their share. Our major record labels are part of the multi-national conglomerates who control the world. In the old days, the big guys made all the money because they had total control.
It's no surprise the big guys are already positioning for power because that's what big guys do, try and rule. This is the way of the world, the big guys, and the little ones, probably since the days of the caveman. The Net has leveled the playing field, somewhat, and given the little guys a distribution channel. But still, the question is, how do you get people's attention? With so many choices, how does an independent artist get some play?
That's why the big labels have been successful in the past, because they had the ability market their music, controlling distribution and radio. Even though the old order is crumbling, let's not underestimate how a couple of million dollars in marketing money wisely spent can create quite a buzz.
Yet in the music business today, there's actually fewer big guys, the so-called major labels are down to less than handful. In addition to the labels, the evolving music biz now includes Apple, Starbucks and Microsoft. Starbucks sells lots of CDs, and in the not too distant future, will be selling downloads from many of their outlets. Get your latte, and then plug to their system for some downloads. Thankfully, somebody at Starbucks really likes Jazz.
The decentralization of the media, because of the Net, and the unprecedented number of leisure time choices, have deeply cut into CD sales. The existing order of the music biz has been crying foul over downloading, doing the legal thing to scare people.
What are ten thousand lawyers at the bottom of the ocean? A good start.
Yet lawsuits or not, downloading continues, and whether or not downloading has actually hurt sales remains to be seen. Before downloading, CD sales were starting to tumble, anyway, so filesharing might not be the nail in the coffin that they say it is. Accordingly, many people are seeking a magic bullet to help us return to those golden days of yesteryear.
Act One of the Digital Media Dreama finds us in the current environment, with the early adopters downloading tracks from these megasites. The numbers are growing, but what's next?
In a recent interview with Newsweek, Jeff Bezos, the man behind Amazon, when asked "Will you eventually sell media content online like Apple?" repied that "Everyone from Wal-Mart to Microsoft is doing it now. It is still very early, and there's still lots of improvements that can be made to that experience. Certainly music is a part of it, and it is an area that we're very interested in."
Of course everybody is interested, when you consider the possibilities. We're talking millions and millions of dollars at stake here. Amazon already has scores of customers who can easily be converted into download consumers.
By the way, as long as we're talking about Amazon here, check out the movie shorts on their site. It would appear that Amazon is now producing content, as well.
So what has to happen for this download thing to really work?
First of all, everyone has to have broadband. A dial-up connection makes downloading anything big practically impossible. The growth of broadband is accelerating and at this point, at the end of 2004, nearly fifty percent of American users have a speedy connection. By 2006, seventy percent and by 2008, probably ninety percent. The rest of the world will take some time to catch up. With more wireless hotspots, and the Net arriving via electrical lines, it's only a matter of time before broadband is everywhere.