Mon 25 Jun 2007
From Rolling Stone:
For the music industry, it was a rare bit of good news: Linkin Park’s new album sold 623,000 copies in its first week this May — the strongest debut of the year. But it wasn’t nearly enough. That same month, the band’s record company, Warner Music Group, announced that it would lay off 400 people, and its stock price lingered at fifty-eight percent of its peak from last June.
Overall CD sales have plummeted sixteen percent for the year so far — and that’s after seven years of near-constant erosion. In the face of widespread piracy, consumers’ growing preference for low-profit-margin digital singles over albums, and other woes, the record business has plunged into a historic decline.
The major labels are struggling to reinvent their business models, even as some wonder whether it’s too late. "The record business is over," says music attorney Peter Paterno, who represents Metallica and Dr. Dre. "The labels have wonderful assets — they just can’t make any money off them." One senior music-industry source who requested anonymity went further: "Here we have a business that’s dying. There won’t be any major labels pretty soon."
This reminds me of the debate of the century and the discussion around record labels needing to re-define and become more innovative with their business models.
How can any of them keep their dinosaur models and hope to come even close to the power of the internet and digital formats (MP3 and others)?
I for one would like to see some real competition for itunes. I can’t stand their software, as well as region/country-specific limitations (like some tracks are available in the US but not in AU).