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Top 10 Music Industry Predictions

Published: Tue January 27, 2009  News Feed

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If 2008 was like the Wild West for the music industry, what does that say about our future in 2009? Brace yourself because it’s not all good news, but from conflict and struggle comes creativity, which is all the more reason to forge ahead.

NO. 1: MAJORS BECOME LESS MAJOR
Economically, 2009 is set to be a very difficult year, perhaps the most difficult one that anyone can remember. That will have a profound impact on the music industry, already in disruptive transition. The majors are in serious decline, outside of the recent economic meltdown. But expect the typical music fan to spend even less in 2009, especially on traditional items like CDs. That means less shelf space at big-box retailers like Wal-Mart and serious downward pressure on label balance sheets. The result? Majors will be further forced into a defensive position. Expect four major labels to move to three, either through acquisition, bankruptcy or another disruptive event. The consolidations will continue.

NO. 2: LIVE SHOWS—MORE IS LESS
People are dialing back their spending and stuffing cash in their mattresses. Entertainment typically fares well in a bad economy, but high-price shows may not this time around. Expect thinner crowds at shows for big-name artists who refuse to offer a bargain. The rest is a toss-up: Cheaper club shows will probably still appeal to dedicated music fans, though bigger adventures could face a pinch.

NO. 3: THE PAID DOWNLOAD—PLATEAU AHEAD
The paid download has surged into the billions since the iTunes Store (then the iTunes Music Store) debuted in 2003. But the excitement is starting to wane, especially as the iPod buzz wears off. And that is a problem, especially as the iPod is one of the biggest drivers of paid download sales. Expect paid downloads to flatten in 2009, especially as disposable cash shrinks.

NO. 4: iPOD SETTLES IN; iPHONE GRABS MORE
Almost every music fan now has an iPod (or three). Since debuting in 2001, the device has become both an icon and a commonplace toy. Apple will still sell millions of iPods in 2009, but the new shiny toy is the iPhone, especially as capacities and capabilities improve. The current iPhone 3G has its issues, but Apple is still cutting its teeth. Expect a greatly improved update at a price people can afford. That is the face of the new portable player and part of a quickly growing mobile-music sector.

NO. 5: MUSIC KEEPS PLAYING
Some of the greatest music comes from the hardest times, and this will be no different. Actually, the difference this time is that great music is spread instantly, with or without the participation of the artist. Some will successfully monetize that energy and some won’t, but expect more creativity ahead.

NO. 6: THE NEWER, SMARTER ARTIST GROWS
Older artists like Guns N’ Roses are suing leakers and making exclusive deals with Best Buy. The rest are playing a new game, one that puts less emphasis on the recording and more on other aspects of the business, including touring, licensing, advertising and publishing. That means less acrimony between artists and fans and a healthier marketplace.

NO. 7: THE BOOTSTRAPPING RENAISSANCE
The flush days of well-funded music startups will take a hiatus, at least during 2009. Less liquidity and less credit means less funding from venture capitalists. But the daring entrepreneur will still find a way through “bootstrapping,” a term used by VCs to describe a self-financed startup. Savings accounts, credit cards and sweat equity will power startups in 2009, but expect some steely, strong teams and ideas to emerge. Sometimes, a downtime is the best time to start a company, simply because of the discipline and focus it creates.

NO. 8: THE SWAP GETS SUPERSIZED
This could be the year that BitTorrent truly enraptures the music industry. P2P apps like LimeWire deliver the single, but BitTorrent is the place for albums, discographies and DVD collections. And for those who can still afford their broadband connections, the lure will become irresistible.

NO. 9: DIVERSIFIED MODELS KEEP GROWING
Bigger, diversified players will continue to gain steam. That includes LiveNation and Ticketmaster, both companies aiming to deliver a more comprehensive suite of artist products and experiences. It also includes labels such as Universal Music Group, a company pushing more aggressively into publishing, merchandising and management. But time is narrowing for labels, and 2009 could be make-or-break.

NO. 10: BIGGER GAMES; BIGGER ARTIST EXPOSURE
Rock Band, Guitar Hero, Grand Theft Auto and SingStar have all helped to layer some bling into the music experience. Instead of listening to “Back in Black,” a younger generation is playing it—and then buying it, seeing it and playing it some more. Expect this story to keep growing in 2009, especially as consumers seek some refuge from the stresses of a down economy.

Source: Paul Resnikoff

DigitalMusicNews.com

 
 
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