Why the Music Industry is F*ked, by Mark Mulligan...

Music industry researchers are finally starting to embrace reality, but are they taking it too far? In Toronto this morning at Canadian Music Week, Forrester Research analyst Mark Mulligan played quite the stark realist—a tune that started in Midem. “Unless the periphery becomes the core, something needs to happen," Mulligan started out, before running through a depressing list of niche non-starters.

According to Mulligan, these are just some of the reasons why digital music—and the broader music industry—is in such a troubled state.

1. The CD is “still a bedrock“ of sales.

2. Subscription platforms have yet to “emerge from the niche."

3. Big funding rounds are “the exception not the norm," and “licensing structures are disadvantaging the format."

4. Current music products do not meet consumer demand.

5. The industry is “still working out mobile," despite lots of false-starts and years of promise.

6. The 99-cent download is “not a mass market value proposition," and paid downloads simply “do not translate well outside the iTunes ecosystem," and “the 0-cents download is always going to win."

7. YouTube—not more revenue-friendly products—are “music's real killer app," and “the music video remains the consumer usage sweet spot."

8. The industry is overly-focused on the “Transition Generation," the 16-24 demographic that still has a memory of analog formats. But an entirely new, “Digitally Native“ generation of 12-15 year-olds is displaying entirely different behaviors.

9. Meanwhile, these “Digital Native" listeners—which favor experience over acquisition, and enjoy total abundance—could create “another Napster moment“ if not properly embraced.