Music Retail Can Be Saved – If We Act Fast
The way to save it is to encourage more outlets to open up. We're not talking about starting more digital download stores like Amazon MP3, Wal-Mart, or the up-and-coming Google Music. No, we're talking about allowing more independent outlets to emerge.
To save music retail, as many niche sites as possible need to be allowed to open, experiment, and ultimately fail too. That way, we can learn from their mistakes.
And more stores will be in front of more fans.
Due to the decline in sales of recorded music, many stores have closed up.
Thus, every year, there will be fewer physical stores in front of fans. Because of this, sales will decline further. Less music retail outlets equals less music sales.
By fostering an ecosystem of independent music retailers and putting more stores in front of more fans, it's possible to save music retail from its demise.
This argument comes from Jay Frank, the SVP of music strategy at CMT.
History Repeats Itself
Reviewing the numbers from last year, he found that only 5% of internet users download music legally and 9% of them downloaded it illegally. This means: "Over 85% of US internet users do not download music legally or otherwise."
More interesting still, is that while 15% market penetration is significant for music downloaders, the figure is comparable to that record sales downturn that occurred in 1949. Back then, the number of fans actively purchasing records fell to 15%.
History repeats itself. The major labels would have you believe that the decline in sales of recorded music that we're experiencing is unique to our times and due to the proliferation of file sharing, but that's simply not true. We've been here before.
In order for music retail to survive, Frank thinks we need to act fast.
In tandem with encouraging more retail outlets to open up, he says that we need to encourage more streaming services. "While only 15% of the internet is currently downloading, at least 40% are streaming music regularly and legally," he writes. "The music business still appears to be in the CD to download transition while the consumer is clearly in the download to streaming transition."
This is an important point.
Saving Music Retail
While the major labels are increasingly becoming digital download providers, not physical media retailers, fans have pushed Grooveshark to become the eighth most popular rising search term in the US. As the labels shift their strategy away from the CD, fans have become to shift away from the MP3. Clearly, fans are ready for Spotify, but even after a decade in transition, the labels aren't prepared.
To get the over 85% of US internet users that do not download music legally or otherwise to buy or stream it online, there needs to be more places to buy and stream it online. Also, efforts to raise awareness for these sites and services need to be increased. "Rallying behind a legal marketing concept and properly funding it should pay dividends," he argues. "Marketing clearly drives sales."
The only music services that have more brand awareness than pirate sites right now are iTunes and Pandora. The rest, most fans have never heard of. To them, they don't exist. But they've heard of LimeWire, The Pirate Bay, and BitTorrent.
Music retail sells music. There needs to be more stores and legal services in front more of fans. Otherwise, music sales will stagnate and continue to fall.
- We need to market music again.
- Give fans more places to buy it.
- And let them stream music too.
That's how can we save music retail.