Odyssey to Labels - Get your house in order!
Music Industry News - as it happens
Source: Mi2N - April 16, 2002
While, with the record labels world-wide blaming Net piracy for their losses
in sales, last year, and while the music industry desperately tries to
restrict file sharing among online users, the mass transfer and download
online music continues unabatted.
A study by market-research firm Odyssey shows 31% of online users over the
age of 16 - or more than 40 million US consumers - say they've downloaded or
transferred music online in the past six months, and they do so an average
of 11 times per week.
"Although many factors likely contributed to this downturn, the broad appeal
of digital music appears to be playing a major role," says Odyssey. "The
industry has taken so long to respond that an entirely new set of
expectations has been created. Now record labels will have to climb walls
that they are allowing to be built."
Company president and CEO, Nick Donatiello, says of particular concern to the
industry should be the fact that sharing digital music files appears to have
become a mainstream activity, concentrated among those consumers that are
also the heaviest buyers of music overall.
"As one might expect, younger consumers are more likely to download or
transfer digital music with 53% of online users under 30 years of age having
transferred or downloaded music recently," he says. "However, such behavior
is not relegated exclusively to teens and young adults. In fact, 20% of all
online users over 30 years old and 14% of those over the age of 45 have also
downloaded or transferred music in the past six months. With older consumers
already getting comfortable with digital music, it would appear that the
platform's appeal is not something that this large base of young consumers
is likely to outgrow over time."
He went on that as these new consumption behaviors develop, the music
industry has responded with litigation and digital music services that are
only marginally aligned with consumer interest.
"Today's digital music services were meant to solve the industry's problems,
not meet consumers' needs," said Sean Baenen, Odyssey's managing director.
"They would have been better off waiting to get their house in order than
opening their doors and sending a message that they are not in touch with
why people use digital music."
Digital music speaks to consumers' desire to own, control, and customize
their own music, said the report emphasising, "This underlines the
difficulties that many of the new online music services such as MusicNet and
Pressplay will face in trying to sell restrictive services that do not
currently address the features most important to the consumers who are most
likely to use them, such as custom mix creation and burning of music files
onto a CD.
"The industry's drive to litigate while launching its own limited services
seems particularly out of touch when consumer behavior is looked at as a
whole. Among the increasing proportion of U.S. households with recordable
CD-ROM drives (23%, versus 16% in January '01), more and more are using
these drives to copy songs from a CD or another source onto their hard
drives (50%), or to record their own music CDs by copying music onto blank
CDs (54%). With this in mind, record companies might find ways to embrace
file downloading by offering services that allow consumers to create their
own play lists and burn them onto the format most suitable to their
"Odyssey's data shows that 60% of all U.S. households have some interest in
subscribing to such a service, meaning it could be a good business if it was
constructed to meet - rather than alter - consumer need."
Related News from Mi2N:
» Napster Or Not, Downloading & Sharing Of Music Files Continues