Skip to main content

Record Labels Will Consider the Unthinkable

The New York Times reports that sometimes even the most unthinkable change can become acceptable when you allow yourself to let go of obsolete and self-destructive biases. Apparently, the major record labels are moving closer to releasing music on the Internet with no copying restrictions -- a step they once vowed never to take.

Executives of several technology companies meeting in Cannes, France at Midem -- the annual global trade fair for the music industry -- said that at least one of the four major record companies could move toward the sale of 'unrestricted' digital files in the MP3 format within the coming months.

Most independent record labels already sell music tracks digitally compressed in the MP3 format, which can be downloaded, e-mailed or copied to computers, mobile phones, portable music players and a compact disc (CD) without limit. The independents see providing songs in MP3 partly as a way of generating publicity that could lead to future sales.

In contrast, instead of harnessing low- or no-cost consumer 'word-of-mouth' momentum to stimulate awareness and demand, the major labels have stuck to their expensive and less effective traditional mass-marketing and promotion models. The majors, as a result, have witnessed a diminishing return on investment from the denial that their own conventional wisdom was responsible for their woes -- not unruly consumers.

For the major recording companies, however, selling in the MP3 format would be a capitulation to the power of the Internet, which has destroyed their control over the worldwide distribution of recorded music. Until last year, the industry was counting on online purchases of music, led by Apple's iTunes music store, to make up the difference.

But digital sales in 2006, while 80 percent ahead of the year before, grew slower than in 2005 and did not compensate for the decline in prerecorded CD sales, according to an industry report released in London last week.

Even so, the move to the MP3 format is not inevitable, some insiders warn. Publicly, music company executives say their systems for limiting copies are a way to fairly compensate artists and other copyright holders who contribute to the creation of music.

But privately, there are signs of a new appreciation in the music recording and distribution industry for unrestricted copies, which could be sold as singles or through subscription services or made freely available on Internet sites that support advertising.

The marketing lessons learned here can be applied to the legacy film industry, but I doubt that they will allow themselves to benefit from the experiences of their music sector peer group. Unfortunately, old memories of a bygone era tend to linger in the minds of these industry heavyweights that proves a point worthy of repeating -- it's so much more difficult to unlearn old market truths than it is to learn and embrace new ones.

Popular posts from this blog

Industrial and Manufacturing Technology Growth

In an evolving era of rapid advancement, market demand for innovative technology in the industrial and manufacturing sectors is skyrocketing. Leaders are recognizing the immense potential of digital transformation and are driving initiatives to integrate technologies into their business operations.  These initiatives aim to enhance efficiency, reduce costs, and ultimately drive growth and competitiveness in an increasingly digital business upward trajectory. The industrial and manufacturing sectors have been the backbone of the Global Networked Economy, contributing $16 trillion in value in 2021. Industrial and Manufacturing Tech Market Development   This growth represents a 20 percent increase from 2020, highlighting the resilience and adaptability of these sectors in the face of unprecedented challenges, according to the latest worldwide market study by ABI Research . The five largest manufacturing verticals -- automotive, computer and electronic, primary metal, food, and machinery -

Rise of AI-Enabled Smart Traffic Management

The demand for smart traffic management systems has grown due to rising urban populations and increasing vehicle ownership. With more people and cars concentrated in cities, problems like traffic congestion, air pollution, and greenhouse gas emissions are pressing issues. Since the early 2000s, government leaders have been exploring ways to leverage advances in IoT connectivity, sensors, artificial intelligence (AI), and data analytics to address these transportation challenges. The concept of a Smart City emerged in the 2010s, with smart mobility and intelligent traffic management as key components.  Smart Traffic Management Market Development Concerns about continued climate change, as well as cost savings from improved traffic flow, have further motivated local government investment in these advanced systems. According to the latest worldwide market study by Juniper Research, they found that by 2028, smart traffic management investment will be up by 75 percent from a 2023 figure of

How GenAI is Transforming the Role of CIO

The introduction of Artificial intelligence (AI), and the emergence of Generative AI  (GenAI), are now resulting in two key focus areas for Chief Information Officers (CIOs) and their IT leadership team. "GenAI is not just a technology or just a business trend. It is a profound shift in how humans and machines interact," said Mary Mesaglio, VP Analyst at Gartner . "We are moving from what machines can do for us to what machines can be for us." AI platforms are evolving rapidly from being our tools to becoming our teammates. Gartner predicts that by 2025, GenAI will be a workforce partner for 90 percent of companies worldwide. CIO Leadership Market Development CIOs have a major role in how they shape AI and how AI shapes us. According to recent Gartner surveys of CEOs, enterprise CIOs are their number one choice to unlock the value of GenAI tools. In fact, CIOs and IT executives will prioritize two areas to unleash the possibility of AI over the next 12-24 months – t