December 23, 2008 by Arlen Schweiger
Pick up any CDs as stocking stuffers this year? Those might just be iTunes and Amazon MP3 gift cards next year.
At least, that’s how technology research and advisory company Gartner sees the future of music retailing, suggesting that it’s an immediate future.
The analyst firm has released a report “Christmas 2008: The Last Year of the Retail CD” that details its facts, figures and recommendations on the shift to digital music distribution—with aisles and shelves full of CDs in retail stores merely standing in the way of more immediate sales growth via online outlets.
“By propping up the CD business, rather than fully investing in online distribution alternatives, the major labels and the larger music industry have neither succeeded in stamping out piracy nor done much to recreate the business models of the old ‘record business,’” said Mike McGuire, research vice president at Gartner. “Music labels should instead emphasize ‘digital first,’ making all new releases and catalog issues via digital services and moving CDs to an on-demand publishing mode.”
Gartner notes that physical media music sales have plummeted from 91 percent market share in 2005 to 77 percent last year (and I’m guessing further down in 2008). Combine that with greater broadband penetration nationwide and greater accessibility through devices like mobile phones, and Gartner says the ‘digital first’ mentality should be embraced.
That way, music labels can cut costs by only burning and shipping on-demand CDs, releasing songs and albums online first, and capitalizing on the social networking boom.
And hey, with everyone touting their green practices these days, wouldn’t the music industry be able to better promote itself as a very green one if more of those plastic jewel cases went away and everything was done electronically?
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Arlen writes about home technology installations and product news and reviews for electronichouse.com
and Electronic House magazine.
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