Digital media/music specialists The Leading Question and Music Ally have warned the record industry that they still have much to do in adapting to the digital era, and that they ought to do what they need to do now if they want to reverse their declining sales. Their comments on the matter coincide with the publication of the results to their Speakerbox survey, due to be released at The Great Escape tomorrow, which apparently claims that the percentage of UK music fans regularly paying for downloads is, wait for it, in decline.
Leading Question MD Tim Walker told CMU: "Many UK music fans are telling us they are dissatisfied with the current legal, paid for digital music experience. They might buy a few tracks from iTunes when they get a new iPod for Christmas but few go on to become regular paying downloaders. The statistics are obviously worrying but the research does offer clues as to how fans who merely dabble can be encouraged to engage fully with licensed digital music services".
Music Ally's MD Paul Brindley added that the record companies needed to more enthusiastically embrace new business models, and if they do their digital future could be more rosy: "Business models need to change radically if the music business is to stand any chance of halting the current decline in sales. It doesn't have to be all doom and gloom".
The Leading Question/Music Ally report makes five specific recommendations as to what music companies should be doing. They are as follows...
1. Music needs to be bundled with other products and entertainment packages: Value can be created from many other ways than consumers simply buying the occasional download. Music needs to move away from per unit sales and become more of a service than a product. It should be pre-loaded into devices, bundled with mobile tariffs, offered as part of TV/Entertainment/ISP packages.
2. Labels needs to experiment with new release schedules and formats: The old model of single and album releases has run its course. Labels needs to be more innovative if they are not to be freezed out altogether. Look at the likes of Radiohead, Nine Inch Nails and Prince and experiment with new and varied formats, new pricing models and release schedules, digital only releases and promotional partnerships with brands.
3. Free doesn't mean no money: The music industry should not fear free. It needs to embrace it. The culture of the net is free or at least feeling free. But money can still be made from other sources: everything from advertising supported services, to brands paying for an association with the artists to newspapers paying for giveaway CDs.
4. Change the charts: The Charts don't make much sense anymore. Now that fewer and fewer people are buying music the charts need to reflect the other ways that people are consuming music.
5. Trust the DJ: Online means anyone can access or own John Peel's entire record collection, but the instant and massive availability of music on demand means you need a trusted guide like John Peel more than ever. The new layers of value will come from the social connections that come about through music as much as from the music itself.
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