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Music labels face reality of digital resistance

Two headlines on the Reuters news service yesterday pretty much summed up today's state of the music industry: "Music sales flat despite legal download growth" and "EMI chairman sees Net reviving music industry."


At first glance, they might seem to be making opposite points: If music sales are flat even with download growth, how can the Net save the business? Yet both are true, and their real significance is that each reflects the music industry's shortsightedness.

The reason for the stagnant revenues is the slow adoption of technology. Had the industry spent less time suing the Groksters of the world and more time evolving from CDs to downloadable music, the major labels would be in a very different position today. And the only way to get out of this slump is to play catch-up, as EMI's Eric Nicoli says.

Blog community response:

"Uh, Eric? You know all those p2p services you'd rather sue than do a deal with? They're hosting about three times as many files at any given moment as all the so-called legitimate services sold in all of 2005. Perhaps it's time to have somebody from biz dev, rather than legal, give them a call."
--The Digital Music Weblog

"First record execs were worried about free downloads. With piracy partially eradicated they are moving on to complain about paid downloads. Yes, it looks like record execs would like to stay with a traditional CD format. (Can you say, 'dinosaur'?)"

"The mobile phone has only been a music player for a year now but already it has generated sales of over $1.1 billion for record companies after sales of music via the internet and mobile phones proliferated and spread across the world."