Wednesday, November 26, 2008

Digital sales outnumber CD sales at Atlantic Records

For the first time digital sales have outnumbered physical record sales at a major recording company. Here is an interesting NY Times article about the milestone (featuring the graph above). 
It is no wonder that the RIAA and the record companies that they represent are fighting so hard to stem the tide of digital media. As the Times article demonstrates, they have not figured out how to make money from digital downloads (or at least not enough). Rather than devote their time to reconfiguring their business models to fit new consumer trends, they are litigating to try to delay the inevitable. 
It is reminiscent of the American auto industry. For years analysts and consumers have been telling the industry that they want higher quality, more fuel efficient cars. Rather than retool and give the consumer what they wanted the American auto industry used their lobbying power to win tax incentives that allowed them to keep creating ridiculously outmoded vehicles
(subsidized by tax dollars).
Consumers and industry analysts are telling the major recording companies (as well as television, film, and news corporations) that they want easy access to the media of their choice on their own schedule. Consumers don't want to pay $19.00 for a CD that only has one song that they want on it. They want to pay $1.00 for the single on their computer. I don't think this is a trend that will be changing anytime soon. Yet recording companies continue to create the same ridiculously outmoded albums complete with antiquated publicity and lavish recording costs. 
Rather than compete for the business of consumers, media corporations, like the American auto industry, are attempting to use their powerful lobbyists and lawyers to protect their failing business models.

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