Sony BMG Expects 40% Of U.S. Sales From Digital

Thomas Hesse

The DIGITAL MUSIC FORUM WEST wrapped up in HOLLYWOOD on THURSDAY (10/4), and many of the morning panels acknowledged the fact that, in this digital age, people are consuming more music than ever, writes DIGITALMUSICFORUM.COM. They are just not paying for it. Many panelists agreed that the industry is finally moving in the right direction by dropping DRM-restrictions, moving to ad-supported models and variable pricing in order to find individual price-points that works for everyone.

"2007 has been a difficult year," said SONY BMG Pres./Global Digital Business & U. S. Sales THOMAS HESSE, who was the morning keynote. He mentioned that SONY BMG is at 30% digital sales in the U.S. this year and projecting up to 40% next year. "Unfortunately it is less abroad and it is not enough to make up for the overall decline in sales," he continued.

We need to make access easier, the offerings more compelling and allowing music to be freely shared on social networks. That is the future.

BENCHMARK CAPITAL Entrepreneur-in-Residence DAVID GOLDBERG suggested that music industry executives have themselves to blame for is not moving fast enough to embrace a digital world. "People think it is bad this year, it will be catastrophic next year (for the music industry). Free ad-supported music is the way to go; we should have had that years ago. There is no sense of urgency in the industry on how fast this is tipping over."

HESSE projected around 17% of SONY BMG sales coming from digital for this year on a global scale, but mentioned that he thinks that it should be a much bigger business, especially when it comes to mobile offerings. "We have seen a flattening of growth in the ringtone business this year, but we see much potential in ringback tones. It is huge in KOREA. Then we have the full-track downloads to phones, which is another big opportunity. Ultimately, all-you-can-eat music services on the phone and sales of phones preloaded with music are the winning formulas."

On a positive note, HESSE said that he sees that the "glass is half-full" and that there are many, many opportunities for the music industry going forward. "We need to make access easier, the offerings more compelling and allowing music to be freely shared on social networks. That is the future."

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