Title: Music in the 2010s: A New Ecosystem for Digital Musical Consumption

 Music in the 2010s: A New Ecosystem for Digital Musical Consumption

February 1, 2011 Industry Trends

It is striking that in the press lately, many previous subjects of discussion have become almost obsolete.  Complaints about free music, about devaluation of music, about pirating ... these are old topics to say the least.  Music now is an excitingly positive new world!

Although physical retail is still the major source of revenue for labels worldwide, compact discs have become a mode of musical consumption that is “niche” when compared to the number of downloads – legal or not – and especially music streams that are happening now.  There are now more transactions for music than ever before.  The challenge is that the value of each transaction is lower.  So what's the solution?  Let’s get more deals, more transactions and embrace the future.

A la carte downloads themselves fail to increase sufficiently to compensate for the decline in physical revenues but the combined ecosystem of musical consumption is growing and fast!  With Spotify, YouTube, Deezer, Simfy, Beezik ... the list goes on and on ... many of these sites are essentially powered by revenues from ad-funded streaming services that are increasing at a much higher rate, reaching levels in two/three years that a la carte models took between 7-8 years growth to achieve. Let’s remember the digital economy is still a baby, not even a teenager ... we are on the way to seeing our industry growing again!

We also know that the activity of streaming is not just monetizable in itself but that it also pushes consumers to digital download stores and most importantly perhaps serves as an additional media in its own right–offering editorial and recommendation support as traditional radio has always done.

People are multiple and diverse users of forms of musical consumption within which there is no simple physical/digital barrier.  We can all listen to a Radio show at breakfast, buy at a download store at work, enjoy a streaming playlist at lunch, play a Vinyl in the evening or any variation on this.  We all do and the factors involved are technical savvy, available revenues and time.

However the most important part of this changing reality is that as it gets easier – 10 million tracks on a mobile phone for example bundled with a telephone subscription – then it also gets “cooler” for young people to use than the boring old P2P model where questions of inter-device useabilty, mobility etc were not all resolved.  If Piracy again begins to be more like actual work, then why bother?  It’s about offering great user experiences, great service and our industry needs to take advantage of this. 

At AudioSparx, our goal is to work together intelligently and collaboratively, making sure that the great volume of music available is not a blocking point or glut,  but rather a high-quality musical library that people can find their way around while providing revenues for those who created the content. This means focusing in on creating an ever larger audience, and working with an ever-expanding artist community to accelerate content quality and quantity.  This is our challenge, and we are focused on this every day.