Even people who don’t pay close attention to the music business know this refrain by now: Digital music sales are increasing, but not enough to replace plummeting CD sales. Today’s version comes courtesy of the industry trade group IFPI, which has yet come out with an estimate overall sales for 2007, but says that it will be a decline, even with a 40% increase in digital.
Much more alarming, though: While digital sales now account for 15% of the industry’s revenue, growth is already slowing. AP:
From $380 million in 2004, digital revenue roughly tripled in 2005 and nearly doubled in 2006, but brought only a modest 40 per cent increase in 2007, the IFPI said.
This is lousy news for an industry that has finally acknowledged the impending death of the CD, and has been desperately been trying to push as much digital product as it can, in whatever format it can think of: Mobile, subscription, DRM-free downloads. But it’s not working.
Way back in the old Napster days, the music industry’s critics argued people where only “sharing” music because they couldn’t buy it easily online. Since that’s no longer true, there’s only reasonable conclusion left: Most people just don’t value music enough to pay for it in any format. This is why the next great hope for the business has become free, ad-supported music services — souped-up versions of Web radio, essentially. Anyone interested? Let us know in comments below.
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