Despite the music industries efforts to fight the
distribution of music through digital formats such as iTunes, experts predict
that digital music will account for 1/3 of total music sales in the US by
2012. Unfortunately, increased digital
music purchases will not compensate for decreased CD sales. What this article does not talk about is the
increased profit margins that come with digital distribution. Let’s flashback to 2000 when A&M Records
and several other recording companies sought and received an injunction that
effectively shut down Napster: The fact
that a college kid and his uncle could create a distribution network for
digital music that would grow to over 26 million users worldwide should have
cued in record companies that digital music sales would be the future of
music. What we’re seeing now is that the
companies that embraced and fostered the new technology are reaping the rewards
and those that fought it are being forced to get on the train or be left
behind.
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