Music Downloads – Opportunity or Threat?

By joanne | 23rd March | Marketing Ideas, Marketing Training

Threat to Business?

Music companies such as EMI and Warner Brothers viewed online music downloads as a threat and used legal sanctions to pursue those who downloaded.  The British Government has now outlined a bill to try and stop illegal downloads – but in a Talk Talk survey published this week, 83% of 18-34 year olds said they would defy the law and continue accessing music for free.

Over 7 million people are allegedly file-sharing illegally, according to a recent study by the British Phonographic Industry.  It’s estimated this costs the industry £200m a year.

Marketing Opportunity?

Whilst EMI and Warner Brothers viewed downloads as a threat, Apple saw an opportunity.  They created the iPod and iTunes to take advantage of the new market and last month, they celebrated their 10 billionth music download.

Increases in the number of legal digital music services also pushed income from online sales up by almost 73% to £30.4 million for PRS for Music.

Correct me if I’m wrong, but teenagers have always shared music.  I remember swapping CDs with my friends when I was younger and, if we found a really good one, we’d both buy copies.  And, in fact, in a recent report for Panorama, DJ Jo Whiley found that people who illegally download music are also the biggest buyers of legal music.  It seems they download and listen, share good tracks with their friends and then buy high quality versions – legally – just like we used to.  A survey conducted by Davos showed that 42% of illegal downloaders were listening with a view to buying and that Person to Person pirates spent an average £77 per year on legally acquired music, compared to just £44 shelled out by those who comply with copyright laws.

The Future..?

Online shopping has also changed the way teenagers are asked to buy music – gone are the days when we would save our pocket-money and head down into town.  With online downloads, teenagers now need to borrow a parent’s credit card – if they’re under 18, they can’t have their own.  Perhaps that’s one barrier that needs removing?  And perhaps that’s one opportunity for mobile internet?

There’s no doubt the digital economy has changed the music industry – but are companies really taking advantage of the opportunities that present themselves, or are they throwing their toys out of the pram – and with them the chance of even larger profits?

Tags: , , , ,