Digital music sales double – could it have been more?

Last year the legal, on-line digital music market grew 189% (still pales in comparison to p2p swapping stats of course). This year, it “doubled”.  That is remarkable; kind of. Why not tripled? Why are CD sales continuing to fall?

In my view, it’s a question of value to the consumer. With the increase in digital players and integration of digital players into mainstream life and devices, there is less need for CDs, hence less value to the consumer. And when a consumer really wants the best quality songs from an album (or just the ones they like), then the value of the CD is decreased even further.  That’s one factor for the decrease in sales. I don’t think the industry would disagree – hence the reason for these new double sided CDs with videos, etc (supposedly more value).

Additionally, with the increasing access to music via online services, which easily fits into the digital music player lifestyle, there is even less reason to buy the CD (unless you really really want the album art – all 7 or so inches of it). 

So it should be no surprise that the on-line music market is skyrocketing. But after last year’s growth, it’s starting it’s first roll off.  Not a bad thing necessarily, but why?  Why is it that there on iPod’s there are only an average of 22 songs purchased from iTunes

It’s certainly not due to lack of media coverage. Or lack of Apple’s advertising, or lack of players or lack of services (since there are “nearly 500” international services now). It’s not lack of interest (since there are about 2.6 unique billion files swapped on p2p networks per month – we’ll call that “interest”).

It’s due to restrictive DRM practices and interoperability issues. People want their music open to be able to use it how they want.

Fortunately the answer is pretty simple – remove DRM and let market forces and innovation do their work.

Fortunately rVibe is a solid path in that direction.

Posted on January 17, 2007 in Market

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