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april 19, 2007:
music cd sales fall 13% through 2006 in u.s. (does anyone still wonder why?)

Yahoo! News reports: “Though sales of music in digital formats such as downloads and mobile ringtones more than doubled in some cases during the year, digital sales did not grow fast enough to cover the revenue gap caused by the downturn in CD sales. Consequently, overall music sales were down by 6.2 percent to $11.51 billion.

This is not really news for anyone, I would say: CD sales are in free fall. It took much longer but is hitting much harder now. Except for EMI, which recently announced a bold move towards selling MP3s (even though there is plenty to complain on how exactly they plan to do it), and maybe UMG, who is rumored to offer MP3s via Amazon’s new service, the major record labels still prefer control over money. In other words, they would rather not sell MP3s or other non-DRM formats than make money with their music. The reason? Because without DRM, they can’t control what we (a.k.a. the evil users – the People Formerly Known As Consumers) would eventually do with their tunes. (Imagine: We may actually share them without permission!)

As long as the major labels keep pounding on their right to have the cake and eat it, too, people will buy fewer and fewer CDs and continue to download for free, simply because there are so few other, worthy, easy, attractive options. Get it? It’s not the evil intent that creates the free-loaders; it’s your intent to control the consumer that is being rejected. And please don’t tell me iTunes is such a perfect option and “everyone who wants to be legal can just use iTunes.” Yes, it’s easy and works great but the economic model as far as music sales in concerned (as opposed to hardware!) is fatally flawed: an ever diminishing fraction of consumers will continue buy songs for $1 per track. In the long run everybody just stops spending at a certain point, and will look for options that don’t punish interest in new music. Here is my simplified recipe for you guys:

1. Offer all music in open, 100% compatible formats.
2. Offer back-catalog deals, bundles, subscriptions, and sooner rather than later, flat rates.
3. Start providing added values that only you can pro- vide (such as bonus tracks, video, chats, blog/backstage access, concert downloads)
4. Start treating the users/listeners/fans with the love they deserve instead of with the disgust that your law- yers have for them.

Wake up and smell the roses of Music 2.0 – or continue to duck and cover.