Sunday, December 7, 2008

UK Music Industry in Trouble?

In these economically uncertain times, you may be losing count of which companies are going into administration (or bust!). Last week saw major UK retailer Woolies call in the administrators, this shook the music industry badly, as Woolies own one of the biggest distributors of music EUK. Stories of panic by record companies going direct to retailers such as Asda to make sure they get their latest releases to the public in the run up to xmas.

Also hitting the music industry at the other end was the news that the major independent music distributor Pinnacle has also called in the administrators. This has effected huge numbers of artists on hundreds of record labels, many of which would have been releasing material for the christmas market, now they are left without a distribution channel to get their products to retailers.

So, getting that much sought CD this xmas may be a little more difficult in some cases. With disruption in the distribution and major record companies fighting for shelfspace in asda the future of music sales as a physical product could well be shortened. With more and more choice in Digital Downloads and the price of these often being so much less than the actual CD, more people will opt for downloading.

The weak link in the chain of getting music from the artist to the consumer is showing to be the distribution network. Music is being made, and music is being demanded, yet if the product can't get to the consumer the business is in real trouble.

Enter Amazon UK MP3
Amazon seemed to have timed their entry into the MP3 download business at just the right time to make the most of this. With many of top selling albums such as The Kings of Leon's new release - Only By The Night being discounted to £3 for the MP3, when compared to almost £9 for the CD.
Amazon are a very forward thinking company and are always keen to grab new opportunities, so I can say that in 2009, they are likely to be working with independent artists in much the same way that iTunes do. Providing music on demand with the newest and oldest acts in music will surely be another thorn in the side of major record labels and independents as profits are squeezed even further. Amazon mp3's are also not copy protected like those provided by iTunes, meaning you can easily transfer to other mp3 devices you own.
So, maybe great news for the consumer of digital downloads this christmas but it could be quite a bleak christmas for the record companies and the musicians getting smaller fees. Only time will tell how this will effect the British music industry over the next year.

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