Has the Music Industry reached a Tipping Point?

Posted by: Grayson Brulte

Has the Music Industry reached a tipping point? Will 2007 be the year the industry grows up and embraces digital? Things are starting to shape up that way. First EMI drops DRM and offers tired pricing on iTunes. Then the Warner Music Group opens the Den of Thieves department and invests money into their digital strategy while cutting overhead and reorganizing the companies operations.

Who is going to make the next move? Doug (Morris) we all know that you are sitting by the sidelines waiting to make a move. When will you make a move and bring UMG into the fray? Rolf and Rob, will you fix my old home Sony BMG and bring it into the “new” music industry? Only time will tell, but in the meantime below is some interesting data curiosity of eMarketer.

Sales of CDs, which currently account for 55% of the industry’s total revenues, will continue to decline sharply, falling to 29% of the overall business by 2011.

On the other hand, digital music has been growing exponentially in the past few years and is expected to continue on a healthy growth trajectory, reaching $14.8 billion in worldwide revenues by 2011.

As the industry enters this new phase we will see new younger execs brought in to re-write the model and bring the industry back into it’s glory days with smaller operations and less overhead.