Wilson Ng
Wired Desktop

IN the last few weeks, I have been buying a lot of music, not from record stores but from sites like www.itunes. com and www.emusic.com.

Why? It is not cheap. In these sites, you normally pay anywhere between 40 cents to a dollar per song. However, in the long run, it becomes cheaper and really more convenient.

For one, most online stores have millions of songs, so it is almost a given that you can find what you want. Second, you can listen to the song (most will offer 10 or 15 seconds of free hearing) before you buy, so that you can be sure about your purchase. Third, it is fast and convenient.

If I feel I need to buy a song, I can go to the web-site, and within 30 minutes, I have it in my hard disk. Before, it would take me days and visits to various record stores to get the music album that I want.

But most important about this development is that I don’t have to buy the entire album to get one song. Most albums may contain about 15 to 20 songs, and downloading the entire album could cost $15 to $20.

The music industry is, of course, facing a lot of problems. In 1999, total music sales, according to the Recording Industry Association of America was $14.6 billion. This year, it is estimated to be only $10.1 billion, Forrester Research expects the figure to decline further to $9.2 billion in 2013.

The top reason for this is piracy. But in addition, selling record per track or downloading through the Internet is less profitable. Selling record per track is actually not their choice (they, of course, want to sell the whole album), but the Internet forces them to do it piece meal.

Some record companies are doing better than others in coping with this digital challenge. Atlantic Records this year reported that half of its sales now come from downloads and ring tones.

However, for most record companies, two-thirds of their sales still come from CD, and For-rester Research does not expect digital music to reach 50 percent of total sales until 2011.

Many record companies are hoping to get more money, not from record sales but from concert ticket sales and merchandise sales from artist tours.

Forrester also predicted that online sales from e-stores are expected to hit $44 billion in November and December, representing a growth of 12 percent.

This is actually a positive trend, considering that almost all brick and mortar stores in the United States are reporting decreases in sales this Christmas and discounting heavily.

Also, because of the economic crisis, IDC has re-forecast that worldwide IT spending will grow only 2.6 percent year on year in 2009. Before the crisis, their original projection was growth of 5.9 percent. In the United States, the figure is even lower, and they say that growth is expected to be less than one percent.

IDC estimates that in the next four years, companies will spend $300 billion less because of slower economic growth.

(www.ngkhai.net/bizdrivenlife)

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(December 12, 2008 issue)
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