After a decade or more of comfortable growth, the music industry must now adapt to sales increases that are consistent with global economic growth. Channels through which consumers access music proliferate. New carriers are coming to market DVD Audio and Super Audio CD and, in the longer term, flash memory. but it remains an open question whether these will provide enough added value over CD to tempt consumers into another cycle of product replacement.
Two other strands of technological evolution are creating both opportunities and threats: control software (DRM, encryption,compression, etc) and access technologies (broadband Internet, mobile computing, etc).These are poised to change completely the entire value chain of the industry, and permit new B2C business models,virtual record labels, online radio, digital downloads, streaming and mega-music destination sites,e-commerce, file-sharing and subscription services. But B2B business models such as music licensing platforms or various forms of shopping aids are set to have an impact.Although hardware, such as the PC and Internet connections,have reached mass market status, software content has still to overcome constraints to catch up.
The traditional music industry and the newcomers will follow different strategies.To adapt, incumbents will have to change their internal processes for marketing, pricing and distribution. Not all of these business models will succeed, and even then several will only do so much later than many forecasters will want to make us believe. Nevertheless, there is no doubt that online music technologies are here to stay. And their impact will be profound.
Key issues raised and analysed... - What effect will online distribution models have on the existing music industry value chain?
- What are the strengths and weaknesses of the various on-line music business models and what are their chances of survival?
- How have traditional music companies faced up to the issues and challenges thrown up by changes in the value chain; will they be weakened or strengthened?
- What is the future for free music file sharing systems?
- Will revenues from new distribution channels on the Internet add to or cannibalise revenues from the traditional music industry?
- What is the future for Internet radio?
- Are MP3's days numbered as a format for the delivery of digital music?
- Who are the key players in the emerging new hierarchy? Which are destined for success or failure?
- Which companies in the emerging online music industry are best suited to survive the virtual freeze on new finance for dot-com ventures?
- Which companies are now aligned with each other following the recent spate of acquisitions, consolidations and partnerships?
- Will it be by streaming or downloading that consumers will access online music in the future, or will it be a combination of both?
- What is the state of the traditional record industry?
- How do consumers react to the new opportunities?
- Will the legal environment allow a prospering online music economy?
- Do b2b or b2c business models have a better chance to make it?
- How will broadband and 3G phones affect the music industry?
|
