Filed under: Products and services, Consumer experience, Apple Inc (AAPL), Marketing and advertising, Sony Corp ADR (SNE)
With the monumental changes the music industry experienced in 2007, this year has large shoes to fill in order to see if the developments will continue or stall. One of the biggest developments that will likely continue to change is the place of anti-piracy technology, namely the use of Digital Rights Management software (DRM). It’s been quite a while since EMI Group plc (ADR) (OTC: EMIPY) decided to halt its use of the technology (last April) and since then the other majors have been slow to adopt similar stances, while EMI has changed hands (literally) becoming a part of European-based private equity firm Terra Firma.
Sony BMG, a merger between Sony Corp. (NYSE: SNE) and Germany based BMG, have recently debuted “MP3 cards” which will enable consumers to buy DRM-free albums from stores versus buying the tracks strictly from an online store. The program is intended to “bring digital stores into the physical retail space” with Sony BMG using the website MusicPass.com to allow buyers to retrieve albums. In essence, Sony hopes that the program will expand both the digital and physical markets. Apple (NASDAQ: AAPL)’s iTunes Store debuted a similar program with Starbucks (NASDAQ: SBUX) last autumn, but the new program will see a larger market due to the retail stores chosen to stock the cards.
Finally, the other major development is the band’s Radiohead online-only decision to initially release an album without label involvement. Although this kind of move will likely not be repeated across the board, some bands have mentioned intentions to follow the direction and offer new music in a similar method. The problem with this method is that Radiohead is a firmly established act with a large fan base. New acts and smaller groups will still need to rely on the music industry to further their names unfortunately. It is unlikely that this method will ever be viable for a band unless they are firmly established and can foot the bill without label money. Of course, Radiohead itself has labeled the release an “official” leak, which means that it conforms to similar patterns that album releases face, albeit one from the band itself and not fans getting material out illegally before the CD is released.
It seems that the future of the music industry will rely on these kinds of developments, even if they are not successful. The benefit they bring to the industry is a new level of excitement and interest peaked in changing business practices and models.
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