OK, let’s reiterate: Way back in 1999/2000, young Napster founder, Shawn Fanning, attempted to get a legal music distribution deal from major labels with the argument that making music available internationally online for a few cents would generate millions for the labels.
They didn’t bite.
Apple comes along with its 99-cent (79p in UK) price point and digital music comes of age, sales get made, the sector grows (though not enough to make up for the shortfall left by CD sales – which the labels at that time were happily gouging customers by charging too much for) and music’s still here. Albeit changing.
This wasn’t enough for the labels though – they wanted higher prices – eventually Apple gave in and offered them the chance to set prices at three bands, including $1.29 per track.
Warner said digital revenue growth in the last quarter was 8 percent compared to 20 percent in the previous year’s corresponding quarter.
“This is in line with an industry-wide slowdown in which year-over-year “digital track equivalent album unit growth” dropped to 5 percent in the December quarter, after being at 10 percent in the September quarter and 11 percent in the June quarter,” we’re told by the Silicon Valley Business Journal.
This, according to the Byzantine logic of Big Music, equates to a “net positive” for Warner. So – selling fewer tracks by artists to fewer people is a success, so long as the profit per tune ranks high.
Warner CEO Edgar Bronfman Jr. predicted subscription services could eventually become more important than iTunes type sales.
“The number of potential subscribers dwarves the number of people purchasing music on iTunes,” he said.
In the subscription model, of course, people pay a few cents for each track they have access too.
(Oh yes – and just what kind of profit do artists see on each track played via subcription? Answer is less, cos it’s a rental rather than an ownership model, which artists receive lower compensation for.)
Who wins there, then?