In the presentation I did last year at the NARM event, one of the things I noted was that people who were pinning their hopes on the music industry making a revival through digital sales of songs were betting on a false hope. They were betting on the idea that they could just take the old world (Tower Records) and move it to the new world (iTunes) with a digital facelift. Doing so ignored the reality of what the internet does and allows. The internet doesn’t just let you take a store and move it online. It changes nearly every aspect of the creation, promotion, distribution and business models around music. Yet, this was a point that I got a lot of pushback on. People still insisted that selling music files was going to be “the thing” that worked. They might want to check that assumption. Reports are coming out, noting that while digital music sales are still growing, the pace at which they’re growing is slowing down, in some cases drastically.
Now, you can’t expect massive growth forever. At some point, every growth market begins to mature and saturate and the growth rate slows down. But, digital music sales are still a relatively small market. It seems much wiser to focus on the markets that actually have much more potential than the one that tries to just recreate the old world by applying artificial scarcities.
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