Opinion: Where is music retail headed?

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LaToya Dupree
examiner

As we all know, compact disc sales of music have been on the decline for years now with the advent of the mp3 file-sharing phenomenon initiated by Napster.

According to a recent report published by eMarketer.com, physical CD sales totaled just $5.8 billion in 2008, “down 60% from a peak of $14.6 billion in 1999.”

With this decade-long decline in CD sales taking place, the four major music distributors, Universal Music Group (UMG), Sony BMG Music Entertainment (Sony/BMG), EMI Music Group (EMI), and Warner Music Group (WMG) are still standing, but all continuously seeking to find ways of remaining relevant in this ever-evolving era of digital music.

An increasing number of physical record stores are closing, and general entertainment retailers have minimized their selection of compact discs. All of the major labels have launched new media initiatives in order to remain at the forefront of the industry that they currently dominate. In addition, with more digital access, independent musicians are increasingly taking over their own music marketing and distribution, and the need for physical inventory at record stores in the form of compact discs is declining.

With all of these substantial changes taking place within the retail sector of the music industry, the business model is changing rapidly as the industry must adapt to the behaviors of its consumers.

However, even with all of the innovative music technologies being offered to consumers as well as artists, CD sales, which have been declining for years, generate more revenue, so overall music sales in dollar terms have declined.

For the music industry, this means that by 2013, United States sales of recorded music will decline to $5.52 billion down from $8.40 billion just last year in 2008. Not surprisingly, the downloading of single tracks made up over $1 billion of total digital sales in 2008.

Mobile sales have also been a huge contributor to digital music sales, however, this sector is also encountering a slight decline from last year.

Even with all of the statistics and theories being tossed around, no one can ever really predict exactly what the future may hold for the music industry. Consumer tastes change, technologies become more innovative, and the art form of music goes through cycles.

Only time will tell exactly what, or who, will change the game in the music industry. Until then, I shall stay tuned.