Decline and fall of a music empire

Posted on January 4, 2007
Filed Under Advertising, Broadband, Copyright, Digitisation, Entertainment, Future, Music, Newspapers, Paid Content, Technology, Trends |

The FT reports on MusicZone’s slide into administration.  There is upside for the industry in terms of the growth of digital revenues but this growth is no where near enough to cover the dramatic decline in the revenue from physical formats. This will all sound very familiar to newspaper executives.

The downward trend has been clear for five years but recent figures suggest that the decline in CDs and DVDs has accelerated. The IFPI, the music trade association, reported a 10 per cent slide in physical format sales in the first half of the year around the world.

Ged Doherty, the head of Sony BMG’s UK operations, predicted two months ago that CD sales would halve over the next three years.

“We predict digital growth of 25 per cent per year but it is not enough to replace the loss from falling CD sales.”

Mr Doherty warned that, if current trends continued, by 2010 the industry’s total revenues could be 30 per cent lower than they are now. He said: “We have to reinvent.”

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