Why And How Digital Music Products Have Indeed Failed

There’s been a lot of buzz (some positive and not so positive!) about comments I have made about the current state of the digital music market in The New York Times and at Midem. 

The quote that really grabbed the attention was “As Things Stand Now, Digital Music Has Failed.”

The problem with a quote like that, of course, is that it can mean many things to many people without further context, so here’s the additional context I gave around this in my Midem speech:

Digital music is at an impasse. Digital music has failed to reach its three key objectives:

1 – To offset the impact of declining CD sales.

2 – To generate a format replacement cycle.

3 - To compete effectively with piracy.

With music’s first digital decade behind us, we’re still trying to define a role for mobile; we’re still waiting for a 99-cent download market to emerge outside of iTunes; we’re still waiting for 9.99 subscriptions to break out of a niche; we’re still trying to work out how to make the economics of ad-supported add up; we’re still waiting for piracy to decline; we’re still watching recorded music revenues decline; and we’ve still got CDs as the bedrock of music sales.

The simple fact is that current music products do not meet consumer demand, and the divergence between emerging consumer behavior and legitimate music products is widening at an alarming rate.

Current digital music products are essentially transition technologies that were useful for bridging the gap between the analogue and digital worlds, but now it’s time to start the digital journey in earnest. The current portfolio of digital products will not get us there. Consumer behavior, as disruptive as it may be, is rapidly outpacing the evolution of digital music products. This means a complete new wave of music products that embrace access and experience, instead of trying to replicate analogue-era distribution business models in a digital context. 

Selling units of "stuff" is not the future. The slowdown in digital music growth is rock- solid evidence of this fact.

Music products must harness disruption; that isn’t in question. What is in question is whether they will do so quickly enough to prevent another massive chunk of the marketplace disappearing for good.

Comments

Your Midem Comments

Mark,

I think you nailed the problem, and have drawn an accurate picture of the elephant in the Music Industry room. In a recent post, I elaborated on what could happen if rights holders saw things similarly.

i think you are doing good thinking.

The whole post is here:
http://bit.ly/fJRaQW

Cheers. --JI

Great commentary. The

Great commentary. The approach to date has been to try and replicate the physical business model in a digital model. This has absolutely failed given that the digital opportunity has completely changed the consumer's behavior and demand. This consumer change begs for a new model that needs to ripple through the entire value chain from A&R to song production to marketing and distribution. In addition, the cost structure of underlying processes tied to production and marketing really need to change if future product/service offerings are to be profitable. For example, services like StudioTraxx.com (online musician-for-hire and production) are beginning to change the way songs are produced and recorded -- access to broader studio musician talent pools, lower studio costs, faster turn around times. This presents an opportunity to create higher volumes of quality content (songs) cheaper.

excellent blog to kick start the 2nd digital mobile decade

you have hit the nail on the head here. i found midem interesting on many negative/positive levels of which i will respond later on that score to this blog when i have time. i have never in 10 years seen the state of the union so eloquently put in simple black and white.

there are far too many players in the industry across so many entry levels of access from social to mobile to digital to phsyical etc

these new players do not understand how the music industry functions either in the old or new ways

i find experienced major label heads confusing themselves trying to morphe thier way of thinking to influence the independent sectors of which in my view midem represents 90% of

B2B 360 major labels/publishers >> independent labels >> unsigned musicians>> reality wanna be's

B2C 360 major labels/publishers >> independent labels >> unsigned musicians>> reality wanna be's

note please: B2B and B2C are separate but they both operate across physical, digital, mobile, social, streaming, etc etc

there are too many new players who dont give a fiddlers fart about creating or providing new positive solutions but are more interested in a fat buck linked to a lucrative exit strategy which is not healthy to our biz

gonna blog here in 7 days with those solutions as i am tired tired tired my god of so many new experts who either have adopted or piggie backed new ideas from someone and tey then take credit for that [example midem net organisers who leverage what i just siad to make money at major label level or idiots who get conned in2 yet another stupid license model coming down the tracks doom 2 fail] fuck them i am gonna call cos the cynicism of all that is galling

no one dares to critisize them for fear of black list...where are the new punk rockers man cos the old ones have no balls

expect POSITIVE fire works N solutions for debate from this blog page soon

mark mulligan...gr8 fuckin job..inspires me

[dENVER/CEO FOUNDER www.music2text.com

Have to agree with this

Have to agree with this article as well as the last comment (denver thomas)....after attending midem as well, the amount of companies cramming themselves into the music space with "the solution" is crazy and although technically smart it's usually about industry fast tracking and hijacking a way into the muscle of the industry rather than massaging through trial and error based on real artist / industry needs.