Not only has the singles market more than doubled in the number of units sold sine ’02, but it’s almost entirely divested itself of the physical media. This growth is not reproduced in the album market (old figures here), which in 2008 saw a shallow (compared to predictions) decline of between 3.2% and 6% depending on who you listen to, despite 68% year on year growth in digital (read people shifting over to buy digital formats rather than physical).

This is encouraging news for the music industry in the UK – despite the panic that filesharing and online piracy keeps sending through the motley ranks of the big execs, there’s not that big a downturn in sales. Music piracy is a massive phenomenon; according to the IFPI, 95% of music downloads are illegal, but is it really hurting the industry if sales are staying firm in the face of this explosion in Piracy. The BPI’s Chief Exec Geoff Taylor stated “That singles have hit these heights while there are still more than a billion illegal downloads every year in the UK is testimony to the quality of releases this year and the vibrancy of the UK download market.  Consumers are responding to the value and innovation offered by the legal services and these new figures show how the market could explode if Government acts to tackle illegal peer-to-peer filesharing.” His implication is clearly that all the pirates out there would be forced to buy their music instead of getting it free  – but I think this is something of a false premise: just because people like getting something for free, doesn’t mean they would be prepared to pay for it. I’ve been introduced to a lot of bands by people burning me CD’s or sending me tracks over the net, even way back when my teenage girlfriends used to make me mix tapes it was the same sort of piracy, but the upshot of that was that I’ve discovered more bands, been to more gigs and bought more CD’s, vinyl and downloads than I ever would have if I’d not been so freely able to share music. I strongly feel that bands should profit from people’s enjoyment and sharing of the great music they make, but it should be directly related to the cost of time effort and money involved in getting that particular piece of music to that particular person.

I would pay more for an LP than for a download because I’m getting more. Not just intangible 1′s and 0′s but a real lump of plastic and paper and design as well as the music. MP3 stores cost money to run, tech guys, ISP’s, designers and even marketing people (sadly) have to be paid, but those costs aren’t there with file sharing networks, or at least they’re not paid for by the guys in the music industry. If the site makes money, that should be shared equitably with the artists whose work they exploit, but artists should take into account that they’re not just losing download sales, they’re also gaining fans through these channels, fans that will buy tickets and albums and merchandise and write about you on their blogs and tell their friends about you, if you’re good enough, and you give them a reason to buy. *deep breath* Sorry. Rant over.

What will always be true is that supply must follow demand; if people want new ways of getting music cheaply online, the traditional market and online music stores must adapt to provide them, or fail in the competition with less legitimate routes of supply.

Related Articles

• Spotify Updates Platform With New Features – April 27, 2010
• Digital Distributor RouteNote Signs 3 New Online Music Stores – Deezer, Napster, Thumbplay – January 29, 2010
• UK Digital Bill Will Raise ISP Subs by £25 Per Year – January 6, 2010
• Hulu, Vevo, Spotify – Embattled EMI embraces new revenue streams – November 19, 2009
• IFPI – New Research On Music Buying Habits – November 16, 2009

Market analysts NPD report them as having roughly 8% of the U.S. digital download market, and they’ve successfully launched in the UK, Germany and France since then. Concentrating on the States for the time being, the overall digital music market is reported as being worth 36% of overall music sales at a massive USD$1,783,300,000,  making Amazon’s 8% share worth $142,664,000. A small part of their $19 billion a year’s worth of total sales, but still a big force in the market, and one with a massive user base making a presence on Amazon a serious part of a coherent music marketing structure.

Amazon offers a fully DRM free catalogue from all the majors and a growing number of independent labels, a lower per-track price than iTunes, and a higher bit rate on downloaded tracks. They are also introducing an on-spec CD manufacture service, whereby artists can upload music files and artwork in order to have physical discs manufactured for sale through the Amazon retail site, alongside the same tracks in the Amazon MP3 store.

Bolting on an MP3 download service to their existing customer base meant that they became more or less instantly the second biggest single outlet for pay-per-download digital music in the States, and their international presence will continue to grow.

Related Articles

• Bid To Buy The Orchard Raised To $2 By eMusic Owners – January 15, 2010
• Emusic Signs Warner Music Deal – January 12, 2010
• Top 100 albums of the decade – November 19, 2009
• Hulu, Vevo, Spotify – Embattled EMI embraces new revenue streams – November 19, 2009
• Digital Music Store Focus – Napster 2.0 < – October 15, 2009