Labels Looking To Amazon For Growth
January 14, 2008 at 5:29 AM (PT)
If digital downloads are ever going to help the shrinking music business, 2008 is emerging as an important test year, writes THE NEW YORK POST. All eyes will be on AMAZON.COM and its CEO JEFF BEZOS over the next 12 months now that SONY BMG and WARNER MUSIC GROUP have announced they will join UNIVERSAL MUSIC GROUP and EMI in selling songs in the mp3 format through the e-commerce powerhouse.
Much has been made of the music industry's desire to find another strong retailer that can counter-balance the dominant influence of APPLE boss STEVE JOBS. AMAZON -- a destination for as many as two-thirds of all online shoppers, according to some estimates -- is particularly well-positioned.
But what record companies really need BEZOS to do is expand the overall number of consumers who pay for digital music in the same way that JOBS has -- not just steal existing customers from iTUNES.
"Labels must act more like management companies, and tap into the broadest collection of revenue streams and licensing as possible," JUPITER analyst DAVID CARD said. FORRESTER analyst JAMES MCQUIVEY said AMAZON's best opportunity to boost the digital music market is its appeal to the 20 to 25% of mp3 player owners who have something other than an iPOD.
Last year, album downloads rose 53.5% to 50 million albums, and sales of individual songs rose 45% to 844 million tracks, while CD sales fell 19% to 451 million albums.