Mashable today published a predictive Top 5 for the music industry into 2010, the headlines of which were;
1. Labels will get smart
2. Physical CD sales will continue to decline
3. Release strategies will evolve
4. Music will live legitimately “in the cloud” and
5. “who knows” …. as new business models continue to emerge
There are some pretty interesting points – some we’ve heard repeatedly for years and some newer ones but overarchingly we think that the big trend from all of these will be the move to the cloud.
In the noughties Napster and then ITunes blazed a revolutionary digital path which fundamentally changed the way that music lovers enjoyed music – and the way in which the music industry made and sold music.
Digital has been a total game changer from all angles.
However the “shift to the cloud” has the potential to be just as fundamentally radical.
Whereas digital meant that the way you bought, stored (and shared) your music changed it was still your music. You still ripped and/or downloaded it (legally or illegally) and stored it somewhere on a hard drive or some form of physical media such as a CD or DVD (which you also had to pay for) – while at the same time millions of basements and attics globally became cluttered with plastic tubs full of yellowing CD cases/covers as an additional physical back-up.
The radical shift that the move to the cloud will bring will be the removal of the need for people to own (and importantly have to store and backup their music physically or digitally) their music at all…..in the cloud you access all music for a small fee anywhere, anytime and in any form your mood requires …. as long as you have the bandwidth to get it! There is no concept of “your library” (other than the artificial ones Music services might create to tier subscription payments to various “levels” of access) as everything is yours when you have access to catalogs of tens of millions of tracks available whenever you feel like it.
Today if you Suddenly have a deep seated need to listen to Twisted Sisters “Cum on Feel The Noize” or ABC’s “Poison Arrow” then you can (legally) simply go online and buy the track from a service like ITunes for a small fee e.g. $0.99. However if you subscribe to a cloud based service you simply search for the track and play it (if and when) the mood strikes you as part of a regular subscription fee e.g. $9.99 a month.
In some ways the shift is subtle when you consider paying $0.99 at ITunes for the potential once in a lifetime play of x1 track however the perspective changes when you think about having to pay $100 for x100 tracks you might like to listen to once in your mood driven life versus paying $9.99 a month for a subscription to a cloud based music service with 20 million songs.
That said this shift is still quite an emotional and radical change to the way that people have thought about and enjoyed music (and for that matter other entertainment like TV and Movies) – since the inception of recording technologies in the 20th century – and as such we don’t think everyone will willingly, quickly or easily abandon this need/behavior to own their own library overnight.
However like digital, once you’ve taken the plunge there is no going back (think about this point for a moment in context of your ISP or access to Google….) and with rapidly increasing access to bandwidth, portable media gadgets and simple home networking tools (which mean you can play your music from your PC through your home theater systems) the tipping point for a true mood driven music store in your pocket world is not too far in the future (even if its not absolutely within 2010).
The counterpoint threats to this trend are;
* the attraction of these mega cloud services is less the bigger that your personal music collection is as you may already have (and be willing to regularly top up) enough music to suit all of your moods.
* the cost of storage (and to a lesser degree) bandwidth is rapidly decreasing every year – a Terrabyte of storage now costs less than $200.
* the fact that you have to be connected to a network to play your music and the associated cost with having to pay in data/bandwidth to play every time at this point in time – and the need for people to listen to music offline e.g. while they exercise with an ipod or commute on the train or in the car.
* the ongoing availability of freely available illegal music via torrent sites and other means
However we think that the convenience of having everything always available in the cloud – including ongoing access to new music – for a small monthly fee will win out and become the normal way in which most people access and enjoy music within a few short years. These services will provide high quality, consistent audio experiences with no fear of viruses or reprisals for piracy however offer mkuch better value for money than the current digital model (assuming you take into account the cost of bandwidth if you are playing the tracks every time from the cloud)
Seen through an economic lens @ $9.99 a month / $120 a year this is the equivalent of buying about 4-5 CD’s a month for Generation X and maybe 7 digital albums for Generation Y. So in practical terms the difference between accessing 20M songs or 50-70 a year for the same $120.
Only time will tell 
http://mashable.com/2009/12/25/music-industry-predictions-2010/
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My brother in law would really appreciate this post. We were just talking about this. hehe
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