MP3s not source of music industry woes, by Jack Kapika for The Globe and Mail.
Forrester’s latest study, released Tuesday, says that consumers need a “Music Bill of Rights” to protect their right to get tunes over the Internet.
The five major international record companies, through their trade organization, called the Recording Industry Association of America, have been blaming a 15-per-cent drop in record sales over the past two years on Net-based file-swapping services, starting with Napster.
In reality, other factors led to the drop in revenue, Forrester said: the economic recession and competition from surging video-game and DVD sales.
“There is no denying that times are tough for the music business, but not because of downloading,” Forrester’s principal analyst, Josh Bernhoff, said. “Based on surveys of 1,000 on-line consumers, we see no evidence of decreased CD buying among frequent digital music consumers.”
…The road ahead will be rough, the Forrester study cautioned. The record companies will spend the next two years struggling as they try to deliver digital music while testing out various technologies and legal moves to stop people from swapping the songs.
But by 2005, Forrester predicts that the five big labels will endorse a standard download contract that supports burning and a greater range of devices.
That will lead to soaring sales as finding content becomes effortless and impulse buying sets in. Labels will make content available on equal terms to all distributors, while on-line retailers become hubs for downloading.
By 2007, the new business model should generate 17 per cent of the sales in the music business, Forrester predicts.
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