Jupiter Research has done some prognosticatin' and come to the conclusion that digital sales are going to keep on growing. In fact, if predictions hold true, digital sales will grow at a compounded rate of 16% per year, to a total of 2.5 billion dollars, or just over 22% of total US consumer spending on music.
Glenn Coolfer astutely observes, "Before you do any math, read a blog post about the survey by Jupiter analyst David Card. He explains something the press release does not: Jupiter did not count ringtone sales as digital revenues. He wrote, "Digital music sales will total 22 percent of US consumer music spending in 2011, and ring tones another 12 percent." Combined with download spending, the adjusted digital figure is actually 34%. That leaves the CD with about 66% of the market."
Subscription services are forecast to keep growing as well, with a staggering 32% compounded growth rate in just that category alone. Napster must be salivating but, frankly I don't see it. Unless some major shift comes along and changes the subscription landscape, or the Major labels relent to an eMusic style model, I just don't see how 32% growth in subscriptions is remotely possible.
This year will see ecosystem changing digital music milestones, if Robert X. Cringely's crystal ball is working properly. In his 2007 predictions Cringely writes, "No one DRM technology emerges as the winner and the RIAA begins to back off as it loses a few legal cases. Still, no Internet-only song wins a Grammy or is even recognized as existing." He also turns his six-shooter of prognostication on Apple's unibrow baby wanna-be, "Zune 2.0 appears, isn't brown, but still nobody buys it."
Cringely's predictions give us something to think about. I've already gone on record as saying DRM is deadmeat in 2007 and, I think he's certainly within reason to believe the RIAA will eventually tire of its endless stream of litigation. What I think the RIAA won't do is end one strategy without starting another, so look for signs of a new direction in "piracy management."
Let's face it, piracy isn't going to shrivel up and die, but will be managed like a chronic disease, rather than through a frantic hacking off of limbs.
As for the Zune, I don't think it matters. Zune 2.0 or not the only thing that will displace Apple as top dog in the digital music marketplace is the end of DRM for mainstream, major label music. The death of DRM would make major changes in the hardware ecosystem possible, as manufacturers compete for eardrums and eyeballs on a level playing field. Apple's DRM has the labels stuck in a very tight place, and there is every reason to believe that deep within the darkest layers of the RIAA's war room there is a sincere desire to break free from Apple's bonds.
As for an internet only song winning a Grammy, as long as the Recording Academy members are exclusively members of the "club", I think it's safe to say that the Grammy awards won't see any internet party crashers invited to the dance. That's just simple logic.
Hear that rumbling sound? It's a giant boulder of DRM-less Mp3 goodness barreling down on the music industry like that scene in Raiders of The Lost Arc.
To kick off the year in fine mp3 positive fashion, Reuters reports on a string of news coming from all corners of the music biz. The two current "Biggies" are:
Former EMI exec Ted Cohen has been hired by a post-lawsuit Limewire to convince labels they can "start charging its 40 million users $1 per download and share the revenue and user-behavior information with the music industry." According to the article Limewire wants this to be a DRM-free experiment.
Amazon is pushing for a DRM free entry into the digital music market
Add to the equation the supporting evidence provided by eMusic's recent 100 Million track milestone and Mp3 experiments from EMI and Yahoo! Music and the only question remaining is; Will the RIAA member labels be able to deftly maneuver around this speeding boulder or, will it overtake them?
An interview with Bob Kohn (co-founder of eMusic and the man who wrote the book on music licensing) in Forbes gets to the core of what Kohn thinks of DRM and the digital music market, "When the majors told us in my eMusic days that they wouldn't sell their recordings in MP3 format, I would say, 'You already are--you're selling CDs, and you can turn them into MP3 files.' If they [drop DRM] today, you will see a tremendous increase in digital download sales, because then you will finally see some good competition to iTunes."
eMusic's popularity has done a great deal for the credibility of the mp3 as a distribution format, and Amazon's new entry should do still more but we've still got a long way to go. It's encouraging to see Mp3 positive language in a publication like Forbes but, we need a full court press on the labels to make 2007 the year of the Mp3. Music fans and musicians need to step up and demand that the majors give us music in the format we want.
This year we saw severalDRM freeexperiments from the major labels. 2007 can be "The Year of The Mp3," the year unencrypted, DRM free mp3s revive, rather than raze the music business but, you and I have to stand up together and yell loudly in order for the dream to come true.
As we get ready to bid a fond farewell to 2006, I've been doing some thinking; It's high-time we as digital music consumers make our desires clear.
We want DRM free music.
We aren't thieves.
We're willing to pay, if you give us what we want.
It really is that simple. eMusic has proven this year that the mp3 is a viable media format, without any crippling DRM layer applied. The continued growth of P2P, even after a slew of lawsuits, settlements and unhappy PR moments also proves that DRM isn't saving anyone from anything.. and most certainly isn't protecting music from piracy.
It's time for the record execs to give up the flimsy arguments that have boxed them into a corner so deep they're unable to see the light at the other end of the room. Mp3 is here to stay, it's nothing to be afraid of and, if the record labels would just treat us like adults, everyone would be much better off.
Hypebot reports that Amazon will enter the universally compatible, DRM free mp3 market in 2007. Aiming for a late first quarter launch (otherwise known to those who can do basic math and read a calendar as "the month of March"), the new Amazon offering will reportedly offer variable pricing.
It's an encouraging sign that larger players are dipping their toes in the DRM free waters. EMI has been open to experimental use of mp3s lately, and the smaller labels are selling thousands of DRM free tracks every day on eMusic and Aime Street.
It's too early to call 2007 the "year of DRM" however, it's pretty clear that it will be a year of increased pressure against the dominance of Apple's iPod.
It's the democratization of the music business, and it's becoming a trend to large to ignore. The LA Times reports on artists who've given up (or never wanted) a major label deal, and are instead finding success online.
"It's nice to have the deep pockets and clout of a major record company. [...] Nonetheless, the Web is turning into a viable alternative with which bands can develop a following and earn some money while still pursuing fame and fortune. Such popular groups as Britain's Arctic Monkeys used the Web extensively before getting a break. Indeed, music companies are embracing the Internet as a convenient way to scout new talent."
What's more, artists with online followings have a whole lot more negotiation clout when they do sit-down to discuss a deal. Making it in music is hard, and the internet hasn't changed that. What it has done, is serve to create a much more even (although still rather slanted) playing field in which the indie artist has a real fighting chance, something they definitely didn't have just 15 years ago. With music blogs playing the part that radio stations once did (and no sign of radio recovering from its glut of self serving poppycock), could we really be that far from taking the major label system and turning it on its ear?
Thumbs up to eMusic, who've managed to pass the 100 Million download mark (all without DRM!) and congratulations to Michael Brennan, the lucky customer who downloaded that milestone track.
As promised earlier, the Barenaked Ladies will write and record a track all about Michael Brennan, which will then be packaged as a bonus track for the upcoming album, "Barenaked Ladies Are Men." The track will also be available as a free download for a period in January as part of eMusic's celebration.
"Subscribers like Michael Brennan are what make eMusic the number one site for serious music lovers. We congratulate him on downloading eMusic's 100 millionth track and helping make us the world's number two digital music store," said eMusic President and CEO David Pakman.
So, uh, Mr. Major Label executive guy; How many million DRM free tracks does eMusic have to sell before you join the party? No, really.. how many?
The Barenaked Ladies will help eMusic celebrate dishing out its 100 millionth download by recording a special song, written about and for the lucky downloader. eMusic reached it's 50 millionth download over a period of two years, and has doubled that in less than a year, showing the phenominal growth path eMusic has seen with its subscription service.
BnL's drummer Tyler Stewart calls eMusic and , "a fabulous way to bring music to our fans in a fast, efficient, and good-sounding way," adding "eMusic is an important part of Barenaked Ladies' thrust into the digital music revolution."
Even cooler than the specially recorded BnL song, the 100 millionth downloader will also receive a lifetime premium subscription to eMusic and the opportunity to participate in an upcoming eMusic print advertising campaign.
So, congrats to eMusic for serving up 100 million DRM free songs over the last few years, and for offering the only DRM free download service that competes with the big boys.
Joining the "usual suspects" in decrying DRM is a new voice, but one you'll recognize. UK manager Peter Jenner (The Clash, Pink Floyd, Billy Bragg) is singing a song that many in the industry aren't going to like hearing. In an interview with The Register, Jenner goes on to explain how the big winners are going to be the indies. "he's [...] optimistic that for almost everyone else - indie labels, musicians, songwriters and budding entrepreneurs - as well as network providers - the future's going to be pretty bright. The Big Four know that the DRM era is nearly over - and within two or three years, he predicts, "most countries" in the world will have a blanket licensing regime where we exchange music freely, for a couple of quid a month."
Jenner is a bit of a legend and, whether what he says holds true, the fact that he's saying it is a pretty big win. He's a brash and uncharacteristic guy, but his points around where the industry is headed are on pretty solid ground. His interview should be required reading for anyone who's trying to divine where this big, lumbering digital music ship is headed thorugh the murky fog of the present.
eMusic has announced it will cut back on the generous subscription packages it offers. The change will see the basic package dropping to 30 songs per month from 40, the plus package dropping to 65 to 50 songs per month and the premium package will drop from 90 songs per month to 75.
An eMusic spokesperson told The Register, "We have a much bigger catalog than we had when we relaunched in 2003 - 1.7m songs as opposed to 250,000 - and the web site is much more sophisticated too."
It's tough to say how this will effect the momentum eMusic has mustered. In honesty, what they offered before was a fantastic deal, and what they're offering now is still a fantastic deal, albeit a little less fantastic. If I have a criticism of the move it would be this; Many people I talk to about eMusic love it particularly because they use their "extra" subscription songs each month to explore new artists. Reducing the discretionary budget of eMusic users in this manner could quell some of that pioneer spirit among the eMusic user base.
Cingular is set to launch a non-OTA music service for its mobile phones. Details are a bit sketch but, the new Cingular service will be vastly different than that of its mobile phone market competitors. Users will be able to download from three competing web services, Napster, Yahoo! Music and eMusic and transfer those tracks to their Cingular handset of choice via cable connection to a PC (Uh, wasn't 3G supposed to make all these wires go away? Bluetooth? Wi-Fi?)
Cingular's system breaks the mold set by other mobile operator backed services which have attempted to dive deep into your wallet while failing to mention that most handsets will happily play the Mp3's you already own. It may be a bit old school but, Cingular's service sounds like a good deal for end users, as opposed to a magic tool for removing dollars from customer's wallets.
I've been pretty anti-mp3 phone in the past, and that hasn't changed. I'm still unconvinced that you'll get anything more than a substandard version of phone, mp3 player or both when you attempt to mix the two together in one device. For certain, it's not as easy a recipe as peanut butter and chocolate. If you remove the crazy types of restrictions that most mobile providers use to hijack your wallet, a slightly sub par mp3 player/phone wouldn't be a bad alternative to say, owning a "nice" PMP and a smaller ultra portable class player.
The Independent Film Channel and eMusic will team up in a partnership that will see IFC viewers exposed to great tracks from eMusic in a video version of the (already popular) eMusic Dozen. The first episode, titled "Independence," will introduce IFC viewers to a host of underexposed indie music including Hold Steady, RJD2, Madvillain and Bjork.
Evan Shapiro, EVP/GM of IFC, said, "Much like IFC and our commitment to 'TV. Uncut.,' eMusic gives independent artists a voice, one that can be expressed without censorship or corporate interference. This partnership between our two companies is a very natural linkage that will enable both us to extend our reach and brand awareness."
The segments will wed music with "a captivating video montage that includes concert footage, interviews, animation and "found" video set to an independent-music soundtrack". The partnership with IFC also includes TV ads, a joint advertising promotion in the December issue of SPIN magazine, and 10,000 co-branded cards offering 25 free eMusic downloads.
The EFF take a bit deeper look at the rift between the RIAA and the publishing associations on this issue. The RIAA is overwhelmingly supportive of the new structure, a point which reminds us all that the interests of the record labels are not always in balance with the interests of the music publishers.
"The RIAA argues that extending the compulsory license best serves public policy goals, regardless of the narrow interests of certain copyright holders (publishers) who might want to hold back innovation. Of course, when the shoe is on the other foot, the RIAA is not so quick to embrace compulsory licenses; like the composers who decried the player piano and the compulsory mechanical license in 1909, the major record labels recoil in horror at compulsory licensing of sound recordings for digital and Internet uses. But make no mistake: the RIAA recognizes that a little compulsory licensed "piracy" can get copyright owners and artists appropriately compensated while leaving lots of room for innovation in both new technologies and new distribution channels."
The RIAA has repeatedly rejected any sort of compulsory licensing schemes that would make legal, trackable P2P services possible.
The voices against DRM are increasing in volume almost daily. Scientific American's recent article lays out in clear language what we've been saying for ages, " If the music industry truly wants to loosen Apple's iron grip on digital music sales, it should start allowing music to be sold without digital rights management protection."
Praising eMusic and calling into question the DRM stranglehold allowed to grow and mature under the leadership of Apple Computer and the thickheaded-ness of the major labels. eMusic CEO David Packman said recently, "There's no way you can say with a straight face that [DRM is] something consumers want. This has to get solved for the industry to grow."
The above quote isn't in some left-wing kook rag, espousing the view of the so-called copyleftists; it comes from a Reuters/Billboard article. eMusic is clearly showing that there is another way, and that they aren't harmed by piracy, even when they offer customers what they want, freedom.
Yahoo Music general manager David Goldberg told Billboard, "It's all nonsense. Music is never going to be protected, and anybody who tells you that is not being honest. Yes, you can put up speed bumps, but the people who really want to steal music are going to steal it. So you're just making it hard for people who want to do the right thing to get the music they legitimately purchased on the devices and services that they want."
Jupiter Research has done some prognosticatin' and come to the conclusion that digital sales are going to keep on growing. In fact, if predictions hold true, digital sales will grow at a compounded rate of 16% per year, to a total of 2.5 billion dollars, or just over 22% of total US consumer spending on music. 
This year will see ecosystem changing digital music milestones, if Robert X. Cringely's crystal ball is working properly. In his 2007 predictions Cringely writes, "No one DRM technology emerges as the winner and the RIAA begins to back off as it loses a few legal cases. Still, no Internet-only song wins a Grammy or is even recognized as existing." He also turns his six-shooter of prognostication on Apple's unibrow baby wanna-be, "Zune 2.0 appears, isn't brown, but still nobody buys it."
Hear that rumbling sound? It's a giant boulder of DRM-less Mp3 goodness barreling down on the music industry like that scene in Raiders of The Lost Arc. 
An 
This year we saw 
Hypebot 
It's the democratization of the music business, and it's becoming a trend to large to ignore. The LA Times 
Thumbs up to eMusic, who've managed to pass the 100 Million download mark (all without DRM!) and congratulations to Michael Brennan, the lucky customer who downloaded that milestone track. 
The Barenaked Ladies will help 
Joining the "usual suspects" in decrying DRM is a new voice, but one you'll recognize. UK manager 
Cingular is 
The Independent Film Channel and eMusic will team up in a partnership that will see IFC viewers exposed to great tracks from eMusic in a video version of the (already popular) eMusic Dozen. The first episode, titled "Independence," will introduce IFC viewers to a host of underexposed indie music including Hold Steady, RJD2, Madvillain and Bjork.
I wrote last week about the 
The voices against DRM are increasing in volume almost daily.
