The Music Download Revolution in the Global Music Industry: Markets, Forecasts and Trends

Published by: Gray Area Research

Published: Apr. 15, 2008 - 126 Pages

Table of Contents

INTRODUCTION

OBJECTIVES AND GOALS OF THE REPORT

STUDY SCOPE AND FORMAT

METHODOLOGY

INFORMATION SOURCES

DISCLAIMER

SELECTED RECENTLY PUBLISHED MARKET RESEARCH REPORTS

BY THE AUTHOR

EXECUTIVE SUMMARY

OVERVIEW

MUSIC—THE MOST POPULAR FORM OF ENTERTAINMENT WORLDWIDE—AND GROWING

DYNAMIC TRANSITION IN THE MUSIC PURCHASING MARKETPLACE

THE LANGUAGE OF DIGITAL MUSIC

THE DIGITAL REVOLUTION IN MEDIA

RAPID CHANGES IN HOWTHE WORLD BUYS MUSIC

THE REVIVAL OF THE SINGLE

THE END OF BRICK-AND-MORTAR RECORD STORES

MUSIC COMPANIES SLOW TO RESPOND TO CONSUMER DESIRES AND PRACTICES

A WHOLE NEWPLAYING FIELD AND A WEALTH OF OPPORTUNITY

ISSUES AND TRENDS

THE GROWTH OF BROADBAND AND MOBILE TELEPHONES DRIVE DOWNLOADED MUSIC MARKET

SOCIAL NETWORKING SITES BOOST ONLINE MUSIC SALES

ARTIST AND MUSIC LABEL SITES OFFER DIRECT-TO-CONSUMER DEALS

MOBILE IS THE NEXT FRONTIER

NEWOPPORTUNITIES FOR A&R

NEWOPPORTUNITIES FOR ARTISTS

THE END OF DRM DOWNLOADS

THE HISTORY OF DRM

WHAT DOES THE END OF DRM MEAN FOR ITUNES?

WATERMARKING TO REPLACE DRM?

THE BANE OF ILLEGAL DOWNLOADING

PRE-RELEASE PIRACY

STRATEGIES TO END ILLEGAL DOWNLOADING

THE MOBILE MARKET PREEMPTS ILLEGAL DOWNLOADING

GOVERNMENT REGULATION

TRADE ASSOCIATION PROPOSALS

FILTERING INITIATIVES

LANDMARK LEGISLATION INTRODUCED IN FRANCE IN 2007

BRITAIN PROPOSES GOVERNMENT LEGISLATION REQUIRING ISPS TO FIGHT INTERNET PIRACY

AUSTRALIA IMPLEMENTS THE “THREE STRIKES” RULE

CANADA’S PLAN FOR ISP ENFORCEMENT OF

COPYRIGHT VIOLATION ISPS RELUCTANT TO TAKE ON POLICING ROLE

ARGUMENTS FOR THE FEASIBILITY OF ISP POLICING

MAJOR LABELS SUE IRISH ISP

THE TECHNOLOGICAL DANGERS OF ILLEGAL DOWNLOADING

ILLEGAL DOWNLOADING DECLINES AMONG AMERICAN PRETEENS AND TEENS

THE BOMBING OF THE PIRATE BAY

HOW TO COMPETE WITH FREE

THE GIVEAWAY STRATEGY

CENTRALIZED LICENSING

THE E.U. MOVES TO EXTEND COPYRIGHT TERM

ANTITRUST LAWSUIT AGAINST APPLE

TECHNOLOGY

FROM CD TO DOWNLOAD--SMALLER AND FASTER

DEVICES FOR MUSIC FILE DOWNLOADING

PERSONAL COMPUTER

PORTABLE MUSIC PLAYER

CELLULAR PHONE

STREAMING MEDIA PLAYERS

COMMON DIGITAL AUDIO AND DOWNLOADING FORMATS

AAC (ADVANCED AUDIO CODING)

AIFF (Audio Interchange File Format)

APPLE LOSSLESS

ATRAC

ATRAC3

ATRAC3plus

AU45

DPCM

DOLBY DIGITAL

Dolby Digital EX

Dolby Digital Plus

FLAC

LOSSLESS DATA COMPRESSION

LOSSY DATA COMPRESSION

MIDI (MUSICAL INSTRUMENT DIGITAL INTERFACE)

MPEG (MOVING PICTURES EXPERTS GROUP)

MPEG1

MPEG2

MP3 (MPEG1, Audio Layer 3)

MP3Pro

MPEG4

PCM

QUICKTIME

SDII (SOUND DESIGNER II)

SHN (SHORTEN)

TAC

TWINVQ (VQF)

VARIABLE BITRATE (VBR)

VORBIS (OGG-VORBIS)

WAV

WMA (WINDOWS MEDIA AUDIO)

PRODUCTS AND MARKETS

ONLINE AND MOBILE MUSIC PROVIDERS

Online Music Stores

Innovative New Entrants

A La Carte Downloads

Online Subscription Services

Bundled Subscription Services

On-Demand Music Streaming

PORTABLE MUSIC PLAYERS

MOBILE TELEPHONES

MOBILE SUBSCRIPTION SERVICES

THE GLOBAL MUSIC MARKET

THE GLOBAL MUSIC DOWNLOAD MARKET

INDUSTRY

ROADBLOCKS TO INDUSTRY EXPANSION

RECORD COMPANIES UNDERGOING TRANSFORMATION

THE AGE OF THE ZEN MUSICAL EXPERIENCE

CONSUMER COMMENTS ABOUT THE CHANGING MUSIC INDUSTRY AND ONLINE DOWNLOADING

PRICING

MEETING THE NEEDS OF THE CREDIT CARD-CHALLENGED

COURTING THE OVER-40 MUSIC FAN

CREATING A MARKET FOR THE AUDIOPHILE

NEWGEOGRAPHIC MARKETS

2008 - THE YEAR OF INNOVATIVE BUSINESS MODELS

ARRANGEMENTS WITH ARTISTS

The Standard Distribution Deal

The License Deal

The 360 Model

The Profit-Sharing Deal

The Manufacturing and Distribution Deal

Voluntary Collective Licensing

The Self-Distribution Model

The Disintermediation Model

The Failure of Current Solutions to the Crisis in the Music Industry

A Simpler, Sleeker, More Fair Model for Marketing Music

To Each According to His Contribution

Knowing Your Audience Before the Music is Released

Building Mind-Share

The Continuing Need for the Recording Studio

The Direct Connection Between Listener and Artist

The $3 Album

The Feasibility of Disintermediation in Online Music

INNOVATIONS IN COMMERCIAL MUSIC DOWNLOAD SERVICES

Advertising Supported Services

Spiral Frog

Qtrax

Rcrd Lbl

Attitude of the Major Labels to Ad-Supported Online Music

Scaled Pricing

Subscription Services

UNIQUE BUSINESS MODELS FROM VARIOUS ARTISTS AND COMPANIES

AmieStreet

ArtistShare

Calabash Music

Creative Commons

eMusic

IMeem

Jamendo

Last.fm

Magnatune

Nettwerk

Pandora

Prince

Rhapsody

Sellaband

SlicethePie

Soundclick

ONLINE DISTRIBUTION SERVICES

THE ROLE OF THE CONCERT TOUR IN THE DIGITAL AGE

THE BIG FOUR LABELS

COMPANY SNAPSHOTS

AMAZON MP3

APPLE INC.

IPHONE

IPOD

IPod Shuffle

iPod Nano

iPod Classic

iPod Touch

ITUNES MUSIC PLAYER

ITUNES MUSIC STORE

iTunes Brings the Major Labels Online

iTunes a Loss Leader?

LOGIC STUDIO

QUICKTIME

BIGCHAMPAGNE

CD BABY

THE EMI GROUP

EMUSIC

LALA.COM

LIME WIRE LLC

NAPSTER, INC

RHAPSODY

TUNECORE

SERVICES FOR ARTISTS

SERVICES FOR LABELS

UNIVERSAL MUSIC GROUP

WARNER MUSIC GROUP CORP

LIST OF TABLES

GLOBAL MARKET FOR DOWNLOADED MUSIC (ONLINE AND MOBILE), PORTABLE MP3 MUSIC PLAYERS AND COMPACT DISKS: 2005-2013

1. GLOBAL MUSIC MARKET REVENUES, 2002-2007

2. MARKET SHARE AMONG MUSIC DISTRIBUTORS, BY VOLUME, 2006 AND 2007

3. GLOBAL MUSIC MARKET REVENUES, ONLINE DOWNLOADS VERSUS PHYSICAL MEDIA: 2003-2007

4. GLOBAL MUSIC MARKET VALUE BY FORMAT: 1996, 2000, 2004, 2008, AND 2013

5. THE EVOLUTION OF THE DIGITAL ERA IN THE MUSIC INDUSTRY

6. PERCENTAGE OF GLOBAL DIGITAL REVENUE, BY INDUSTRY: 2007

7. MARKET FOR DOWNLOADED AND PHYSICAL MUSIC, SELECTED COUNTRIES: 2006

8. ONLINE VERSUS MOBILE MUSIC SALES, TOP 10 DIGITAL MUSIC MARKETS:2007

9. GLOBAL DOWNLOADED MUSIC MARKET: 2005, 2006, AND 2007

10. DOWNLOADED MUSIC REVENUES BY CHANNEL, WORLDWIDE: 2006 AND 2007

11. DOWNLOADED MUSIC MARKET, U.S.: 2005, 2006, AND 2007

12. DOWNLOADED MUSIC UNIT VOLUMES AND REVENUES, U.S.: 2006 AND 2007

13. ALBUM SALES, DOWNLOADS VERSUS PHYSICAL MEDIA, U.S: 2006 AND 2007

14. UNIT SALES OF DIGITAL AND PHYSICAL MUSIC, U.S.: 2002-2007

15. DOWNLOADED MUSIC MARKET, EUROPE: 2005 AND 2006

16. THE GLOBAL MARKET FOR COMPACT DISKS: 2002-2007 (UNITS)

17. THE GLOBAL MARKET FOR COMPACT DISKS: 2002-2007 (DOLLARS)

18. THE MARKET FOR COMPACT DISKS, U.S.: 2002-2007

19. ANNUAL PERCENTAGE DECLINE IN CD UNIT SALES, U.S.: 2002-2007

20. THE MARKET FOR COMPACT DISKS, U.S.: 2002-2007

21. GROWTH OF BROADBAND IN U.S. HOMES: 2006 THROUGH 2008

22. GROWTH AMONG UNIQUE USERS OF STREAMING MEDIA PLAYERS, 2004-2008

23. SELECTED ONLINE MUSIC STORES, 2008

24. THE GLOBAL MARKET FOR ONLINE SUBSCRIPTION MUSIC SERVICES: 2005- 2013

25. THE GLOBAL MARKET FOR PORTABLE MP3 MUSIC PLAYERS: 2005-2013

26. THE GLOBAL MARKET FOR PORTABLE MP3 MUSIC PLAYERS: 2005-2013

27. GLOBAL IPOD MARKET SHARE, BY REVENUES AND UNITS: 2004-2007

28. DOWNLOADED MUSIC (ONLINE AND MOBILE) AS A PERCENTAGE OF THE GLOBAL MUSIC MARKET: 2005-2013

29. GLOBAL MARKET FOR DOWNLOADED MUSIC (ONLINE AND MOBILE): 2005-2013

30. GLOBAL MARKET FOR MOBILE DOWNLOADED MUSIC, BY REGION: 2005-2013

31. MARKET FOR DOWNLOADED MUSIC (ONLINE AND MOBILE), U.S.: 2005-2013

32. THE GLOBAL MARKET FOR COMPACT DISKS: 2005-2013

33. PERCENTAGE AND VALUE OF A CD SALE BY RECIPIENT

Abstract

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