Digital Music
If you’ve followed the evolution of the music industry these past few years the biggest change has been the advent of digital music downloads via the internet along with the decline of CD sales.
To hear industry insiders tell it, you’d think the sky was falling and they’re all gonna die. The antagonist in all this? Illegal downloads – pirating.
So of course the music industry launched its War-On-Pirating because stealing is illegal and had to be stopped. And yes they had every right to do so.
However, whether this industry war on illegal downloading made sense or not remains hotly debated.
Every once in a while someone shines the light of clarity on a confusing topic. One such light is coming from a blog with the curious name: KOLTAIS WHATIF – Economic Technological Analysis of “Stuff”
The refreshingly cool thing about this blog is the author spends less time opining and more time crunching data that can lead to revealing and interesting insights.
The chart above is from a post where KOLTAIS WHATIF dives into the historical record of…well…records. More specifically record sales.
The author’s essential finding is that the music industry has undergone several format changes on roughly 12 year cycles. Preceding each transition there’s been a dip in sales followed by sales growth as the new format is adopted. This is clearly shown in the above sales data graph where the huge numbers on the left represent music sales in billions of dollars per year.
The growth of pirating is represented by the dark blue “P2P” (peer to peer). Napster was a prominent early example of P2P music sharing/downloading that was ultimately shut down and forced into bankruptcy in 2002 for copyright infringement. A high visibility event, it’s noteworthy that P2P only accelerated after Napster was successfully quashed by the music industry.
Where it really gets interesting is how illegal P2P file sharing takes a dive right at the same time legal digital music sales took off soon after Apple opened its store on iTunes. And since then digital sales have skyrocketed with unprecedented sales growth. In fact the advent of digital music sales will likely make the prior history of music sales irrelevant.
The upshot of all this is that the music industry lost an opportunity to embrace digital music early on and instead took an aggressive defensive posture fighting P2P and making early digital adopters put up with truly annoying crap like DRM (digial rights management).
Change is inevitable. And as the Borg would say: resistance is futile. But change is also hard because it pits the unknown against the known. The mistake is thinking the known is static and can be preserved.