The rise of digital music

Meet the new star of the music scene – the digital download…

Ever since the Arctic Monkeys were touted as the world’s hottest new act or Lily Allen warbled her way to stardom courtesy of her My Space page, the role of the internet as a discoverer of new talent has seen record labels trawling websites looking for the next hot young thing and band’s vying for the highest number of fans they can accumulate on their Myspace and praying for discovery too. But for every Lily Allen, Sandi Thom or Gabriella Cilmi, there are thousands of artists struggling to gain a foothold amidst the sea of content online… So how does a band make an impact and find a following?

There is no denying the internet has changed the way that people experience music. Music download services and peer to peer networks have made music more accessible than ever before and changed the traditional way that music was distributed – ie by an artist signed to a label with an album available via a physical store or by the artist selling their merchandise independently.

Since the launch of the MPEG4 and MP3 file formats in the late 90s, digital downloads of music have been steadily on the rise with record labels feeling the impact the hardest. CD singles have been the most affected by digital downloads – just this week, UK retailer Woolworths announced that from August they would no longer stock CDs in their stores – instead the retail giant will be providing an online store, stocking more than 1.2 million tracks. Digital downloads of films, tv shows and games would also be available online – leaving industry pundits wondering whether these other entertainment forms might also soon fall victim to the download craze.

Australian music lovers downloaded $40 million dollars worth of music in 2007.

But it’s not just the UK that’s gone download crazy. According to figures release by ARIA (Australian Record Industry Association) Australian music lovers downloaded $40 million dollars worth of music in 2007. A rise of 126% on the figure from the previous year.

Sales of digital track downloads continue their substantial rise, more than making up for the decrease in sales of physical CD singles. Compared to 2006, digital track sales increased in both value and units by 60 percent with sales of $18.7 million on 17.6 million digital tracks. The numbers back a global trend which saw the single track download market grow by 53 per cent around the world to 1.7 billion.

The significant impact of the of the digital single in Australia was evidenced this February’s with the first digital-only #1 single, Rihanna’s Don’t Stop the Music. This single debuted at #1 on the Motorola ARIA charts based on digital sales alone.

Yet still record industry revenue continues to decline – in 2007 Australian music labels’ total revenue dropped by ten percent. Labels cite illegal download services and peer to peer file sharing as one of the major contributors to the falling figures, even going so far as to try to get Australian ISPs to adopt a similar model to that of the French government – and disconnect the service of people found to be sharing illegal downloads. So far no ISP’s have complied.

By Cec Busby

Part Two
The digital music store and the impact of Myspace next week