Trend to convergence of the music and IT sectors continues

05.02.2010: CeBIT 2010, 2 to 6 March A life devoid of music is unthinkable. Music is ubiquitous - it accompanies us in the background in stores and bars, we exercise to it and we enjoy it within our own

CeBIT 2010, 2 to 6 March

 A life devoid of music is unthinkable. Music is ubiquitous - it accompanies us in the background in stores and bars, we exercise to it and we enjoy it within our own four walls. Music is a constant companion on our life journey. Not surprisingly, music is one of the entertainment industry's most popular products, and also plays a big part in the sale of other products and services.

Music is probably the most emotional and popular element of our cultural heritage and is a cornerstone of creative industry. Modern technology provides us with smaller, more powerful, portable devices, allowing us to listen to music on the way to work and during our leisure time - in almost every setting. With a little patient searching it is possible to find the right music for every life situation.

Digitalization and the Internet have posed a huge challenge to the music industry. For instance, figures for the period 1995-2005 produced by the Association of the German Music Industry show that although people were listening to three times more music - increasing from 14 to 45 minutes every day - the music industry itself did not profit from this trend.

On the contrary, sales over the same period actually declined by 35 percent. In 2006 alone the industry registered 374 million illegal downloads. Fourteen times more tracks were downloaded illegally from music sharing websites than were purchased from legal download shops. This trend has pushed the music industry into chronic decline. The Association of the German Music Industry estimates losses of approx. one billion Euros every year due to illegal downloading.

In the meantime, the industry has begun to respond to the crisis and has come up with various new business models in an attempt to master the challenge of change. As digital sales continue to grow, the sale of music via the Internet and mobile radio networks is now recognized as a vital source of revenue.

Music companies are entering partnerships with manufacturers of hardware and mobile phones to offer customers music at flat rates, with a selection of several millions of tracks to choose from. Songs can be downloaded to PCs or mobile phones and easily transferred to other devices. At the same time, the music industry is following developments in wide-reaching Internet platforms with increasing interest.

Numerous music labels already license their products with online portals such as MySpace, YouTube or My-Video - or test advertising-backed downloads and web streaming offers. Young, upcoming bands let their online fans finance their first album, while successful, known stars use the web as a gigantic PR instrument to promote sales of their products.

As PricewaterhouseCoopers and the IFPI (International Federation of the Phonographic Industry) disclosed in their Global Entertainment and Media Report, by 2008 some 20 percent of global music sales were achieved via new digital forms of distribution and business models. A recent study by the German Society for Consumer Research (GfK) suggests that the music market will again enter a period of growth as of 2013.

According to this consumer research group, it is likely that over the next three years digital sales will compensate for the losses experienced in traditional physical music distribution. In Germany, the traditional music market is expected to shrink by an average of five percent per annum until 2015, whereas digital business is expected to increase its market share from seven to twenty percent over the same period.

 Digital albums, online music subscribers, as well as access to music made available by Internet service providers are seen as interesting potential for a revival of business. Licensing revenue from streaming offers is another potentially lucrative source of earnings. The GfK predicts that in Germany the number of purchasers of digital music will treble in number from the current figure of five million to 15 million.

There is a sense of expectant excitement. The music industry is in a state of flux and it seems as if a kind of gold rush is on the horizon. New business models, it is argued, will lead the way out of the present crisis. For some time now the music industry and IT have been working hand in hand. Some of this collaboration will be reflected at CeBIT Sounds! - itself an innovation that offers the relevant sectors an ideal meeting-place and a chance to strengthen and professionalize networking solutions.


Anne-Kathrin Seibt

Permanent-URL: http://www.automobilsport.com/cebit-trend-oncergence-music-it-sectors-industry-popular-products---75776.html

05.02.2010 / MaP

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