Terry McBride's Blog
Wednesday, January 9, 2008
Blog #3
Happy New Year
2008 is going to be a fascinating year. We will see the locking mechanisms of DRM become a thing of the past, we will see Amazon get up to 25% of the Digital market, we will see the average price of downloads begin to decrease in price, maybe hit $0.79 by year's end as other major players such as Ebay enter the market. Apple will start signing Artists as will Telco's and other non Music business entities. Advertising revenues online will grow by 300%, PURLS ( Personal URL's) will get traction, driven by niche markets such as dog enthusiasts; actually, any enthusiasts.
The BNL cruise will be amazing. On amazing, WOW to the Weepies for delivering big time and right on top of huge December digital sales due to awesome placements from Julie! We have a lot of great music coming this year, probably the most exciting year ever for Nettwerk. OK enough of that......some more thoughts on the Music space.
There is a lot of debate these days about the "value of music" in the digital space. The itunes model seems to be the most widely accepted metric associated to the value of a song (79p or $0.99). Now if one was to extrapolate this value across the whole spectrum of the digital music space then the real economic value is in fact around 8p or $0.10 a song. After all, the legal market for consumed digital media is approximately 10% of the whole, the other 90% is apparently free. The Music business is so focused on the 10% of the market, it's almost like the other 90% is a dark force to be fought by an army of lawyers, when in fact it's a market waiting to be monetized. I think there is a tipping point here when the legal cost of music hits a certain price point, which I think is around 15-18p or $0.20- 0.25, then we will start to capture the majority of the digital music spectrum, maybe as much as 75-90%. If you do the math with 50% of the market place at this lower price point we are at today's economic level, anything above that is a gain. This same thought process could be applied to subscription models with the same results. Simply look at the continued success of E-music and the dramatic results that Rhapsody had awhile back when they tested a short term sizable price reduction. I also believe the lower cost will drive full album sales and greater consumer consumption overall.
There will be many who take exception to this point of view, especially those who see the value of a song as being higher and have a need to control not only that perceived value but also how it's consumed. Some record companies, Publishers, Managers and Artists will cry foul. To this I propose a simple thought, who actually owns the song? Legally in most cases the Labels and Publishers will claim they do, of course Artists morally will claim they do. I say none of the above.........so who? LOL
t
2008 is going to be a fascinating year. We will see the locking mechanisms of DRM become a thing of the past, we will see Amazon get up to 25% of the Digital market, we will see the average price of downloads begin to decrease in price, maybe hit $0.79 by year's end as other major players such as Ebay enter the market. Apple will start signing Artists as will Telco's and other non Music business entities. Advertising revenues online will grow by 300%, PURLS ( Personal URL's) will get traction, driven by niche markets such as dog enthusiasts; actually, any enthusiasts.
The BNL cruise will be amazing. On amazing, WOW to the Weepies for delivering big time and right on top of huge December digital sales due to awesome placements from Julie! We have a lot of great music coming this year, probably the most exciting year ever for Nettwerk. OK enough of that......some more thoughts on the Music space.
There is a lot of debate these days about the "value of music" in the digital space. The itunes model seems to be the most widely accepted metric associated to the value of a song (79p or $0.99). Now if one was to extrapolate this value across the whole spectrum of the digital music space then the real economic value is in fact around 8p or $0.10 a song. After all, the legal market for consumed digital media is approximately 10% of the whole, the other 90% is apparently free. The Music business is so focused on the 10% of the market, it's almost like the other 90% is a dark force to be fought by an army of lawyers, when in fact it's a market waiting to be monetized. I think there is a tipping point here when the legal cost of music hits a certain price point, which I think is around 15-18p or $0.20- 0.25, then we will start to capture the majority of the digital music spectrum, maybe as much as 75-90%. If you do the math with 50% of the market place at this lower price point we are at today's economic level, anything above that is a gain. This same thought process could be applied to subscription models with the same results. Simply look at the continued success of E-music and the dramatic results that Rhapsody had awhile back when they tested a short term sizable price reduction. I also believe the lower cost will drive full album sales and greater consumer consumption overall.
There will be many who take exception to this point of view, especially those who see the value of a song as being higher and have a need to control not only that perceived value but also how it's consumed. Some record companies, Publishers, Managers and Artists will cry foul. To this I propose a simple thought, who actually owns the song? Legally in most cases the Labels and Publishers will claim they do, of course Artists morally will claim they do. I say none of the above.........so who? LOL
t
Archives
October 2007 November 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008
Subscribe to Posts [Atom]