October 4, 2007
Music Industry Hopes for, Yet Fears, iPhone Effect
Sales of CDs, still the dominant music format, have dropped more than 20 percent in 2007 from a year ago, according to Nielsen Soundscan. Digital music sales are gradually claiming a greater portion of the business, but the transition has been slow. Sales of full-length songs on cellphones still claim a small portion of the market.
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Some executives say the iPhone could speed up that trend after the device’s U.S. launch on Friday, if the much wider base of consumers who own cell phones see the phone as a music machine.
“It is going to change the way people think about their mobile from being a fringe portable entertainment device to everyone recognizing that this is a really desirable mainstream device,” said Barney Wragg, global head of digital for EMI Group’s recorded music unit, the world’s third-largest record company.
That view is tempered by concerns over Apple’s increasing power base in digital music sales, which rose more than 50 percent in the first quarter, according to Nielsen Soundscan. The total U.S. music market slimmed to about $11.5 billion in 2006, according to music trade body Recording Industry Association of America.
Radiohead Denies December ‘In Rainbows’ CD Release - Billboard
Video Games Could Outsell Music This Year
The report, titled “Global Entertainment and Media Outlook”, proffers expected sales fluctuations for different mediums from 2007 to 2011. The document can be previewed at PwC’s website, but of course the video game segment is what’s most crucial for our purposes. Here’s how PwC defines their look at video games in their preview portion:
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“The video game market reflects consumer spending on console games (including handheld games), personal computer games, online games (including all games delivered over the internet, including massive multiplayer online games [MMOGs]), downloadable games (whether to computers or to consoles), on-demand games streamed through a Web site, and wireless games played on mobile phones. Spending by consumers includes both (1) purchases via retail, made online, or made through mobile providers and (2) subscriptions. In the United States, spending also includes advertising on video games. The category excludes spending on the hardware and accessories used to play the games.”
So not including hardware, games are still expected to surpass music.
Read the rest of this story at 1UP.com : “Video Games Could Outsell Music This Year”
Music Industry Hopes for, Yet Fears, iPhone Effect
Sales of CDs, still the dominant music format, have dropped more than 20 percent in 2007 from a year ago, according to Nielsen Soundscan. Digital music sales are gradually claiming a greater portion of the business, but the transition has been slow. Sales of full-length songs on cellphones still claim a small portion of the market.
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Some executives say the iPhone could speed up that trend after the device’s U.S. launch on Friday, if the much wider base of consumers who own cell phones see the phone as a music machine.
“It is going to change the way people think about their mobile from being a fringe portable entertainment device to everyone recognizing that this is a really desirable mainstream device,” said Barney Wragg, global head of digital for EMI Group’s recorded music unit, the world’s third-largest record company.
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Survey: Apple Fans – Not Music Fans – Will Buy iPhone
The study, generated by Jupiter Research, found that five percent of consumers “sideload,” or shift songs from their PC to their phone. And only two percent of consumers download music from over-the-air services from carriers like AT&T, which will launch the Apple iPhone this week, to the phones themselves.
Jupiter concluded that 27.9 million U.S. consumers will own phones that can play back music by the end of this year. But even the launch of the iPhone is not expected to fuel a resurgence in mobile music, Jupiter found.
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Rather, Jupiter concluded that purchasers of the iPhone will be interested in it primarily because of the Apple name and interface, not because of its music capabilities.
Here come the competitors: the anti-iPhones, revealed.
“While the iPhone could raise consumer awareness of, and interest in, music phones from other manufacturers and mobile operators, it is more likely to attract a unique market segment, hard for competitors to emulate,” said Joe Laszlo, research director at JupiterResearch, in a statement. “Apple fans and status seekers will rush out for a first generation iPhone; music fans will probably wait a while.”
Ironically, mobile music services outside the U.S. have been faring well; in fact, a U.K. service called Omnifone Ltd. launched in mid-June. Its MusicStation service will allow mobile phone users to download an unlimited number of songs 2.99 euros ($3.97) per week.
Having signed deals with BMG, EMI, Sony, and Warner Music, Omnifone has signed contracts with over 30 carriers in Europe, Asia and Africa — but none in the United States. However, that’s only because the U.S. currently represents the largest market for music, according to Tim Hadley, the company’s director of public relations. Omnifone is concentrating upon growth markets, such as the Asia-Pacific region, which is expected to become the dominant region in mobile music by 2015, with about 40 percent of the market, he said.
