Music business finds little to sing about

Iria · Jan 22, 2006, 11:55 PM

CANNES - The global music business shrank by another couple of billion dollars in revenue last year, bringing the decline over the past five years to about 20 percent, the chairman of an international recording industry group estimated on Sunday.

John Kennedy, the head of the group, IFPI, said retail sales fell below $31 billion in 2005 from $33.6 billion in 2004 and $39.7 billion in 2000. Although music revenue via computers and mobile phones nearly tripled last year to $1.1 billion, the gains could not match the decline in sales of CDs of recorded music.

Kennedy, speaking in Cannes at the start of the 40th-annual international industry conference called Midem, also said he did not expect to see a turnaround in sales this year, in part because of the effect of billions of songs traded freely each month over unlicensed file-sharing networks on the Internet.

But he insisted that online transactions, which accounted for a robust 6 percent of the recording industry's sales in 2005, up from virtually nothing two years ago, would lead to a "bigger pie" by 2007.

Many executives meeting here returned again and again to three possible ways out of music's malaise: using the online price of music as a marketing tool to charge more for, say, a hot single and less for a golden oldie; making digital music formats standard and playable no matter what the device of the end user; and increasing music sales over mobile phones.

The first two approaches are direct stabs at Apple Computer and its vise-like hold over Internet music sales, with a market share of more than 70 percent last year. Apple set the bar at 99 cents a single when iTunes began in 2003, and Steve Jobs, the Apple chief executive, has continued to say that the simplicity of his pricing structure is still important in pulling in potential music customers.
_______________
Read More / Source: International Herald Tribune

Jan 22, 2006, 11:55 PM	#1
Iria DriverHeaven Extreme Member Join Date: Apr 2004 Posts: 7,275 Rep Power: 87	Music business finds little to sing about CANNES - The global music business shrank by another couple of billion dollars in revenue last year, bringing the decline over the past five years to about 20 percent, the chairman of an international recording industry group estimated on Sunday. John Kennedy, the head of the group, IFPI, said retail sales fell below $31 billion in 2005 from $33.6 billion in 2004 and $39.7 billion in 2000. Although music revenue via computers and mobile phones nearly tripled last year to $1.1 billion, the gains could not match the decline in sales of CDs of recorded music. Kennedy, speaking in Cannes at the start of the 40th-annual international industry conference called Midem, also said he did not expect to see a turnaround in sales this year, in part because of the effect of billions of songs traded freely each month over unlicensed file-sharing networks on the Internet. But he insisted that online transactions, which accounted for a robust 6 percent of the recording industry's sales in 2005, up from virtually nothing two years ago, would lead to a "bigger pie" by 2007. Many executives meeting here returned again and again to three possible ways out of music's malaise: using the online price of music as a marketing tool to charge more for, say, a hot single and less for a golden oldie; making digital music formats standard and playable no matter what the device of the end user; and increasing music sales over mobile phones. The first two approaches are direct stabs at Apple Computer and its vise-like hold over Internet music sales, with a market share of more than 70 percent last year. Apple set the bar at 99 cents a single when iTunes began in 2003, and Steve Jobs, the Apple chief executive, has continued to say that the simplicity of his pricing structure is still important in pulling in potential music customers. _______________ Read More / Source: International Herald Tribune