British Council-Music business

Transcript of the podcast

P = Presenter

P: There’s said to be an old Chinese curse – ‘May you live in interesting times’. Well, these are certainly interesting times for the music industry. CD sales are down by almost 20% this year, the major chain of stores Tower Records went bankrupt earlier this year and there are constant gloomy predictions that the rise and rise of ‘filesharing’ – people illegally sharing music over the internet – will force many companies involved in the production and sale of music out of business

I’m joined in the studio by Peter O’Neill, who writes a popular blog about the business of making and selling music (pause) Peter, is this the end for the music business

Peter: No, in a word. I think we need to say that the death of the music industry has been greatly exaggerated. I think there has never been as much demand as there is now for consuming music – and people are getting music in many different ways. The challenge for the big companies in the music business is to try and understand the changes that are taking place and come up with a new business model. If they can do that, I think there are very exciting times ahead

P: Well, I don’t want to contradict you but let’s look at some of the statistics around filesharing. An estimated 12 billion songs were swapped or illegally downloaded last year with an estimated loss of £325 million for British record companies. A European survey said 34% of 15 to 24 year olds had no idea of music as something you paid for. That, to me, looks like very bad news for the music companies

Peter: Ah – but I think that’s because the record companies have been very slow in finding ways to sell music in the ways that young people will buy it. Those same 15 to 24 year olds who have never imagined buying music are the people who pay £2.50 for a ringtone for their mobile phone. Ringtones went from nothing to a multibillion pound business in a very short space of time – because people could buy them instantly – it’s a very easy process. And music sales are catching up. It’s becoming very quick and easy to buy a song you want – on your computer or on your mobile or whatever. And levels of file sharing are remaining steady, not going up

 ..P: But

Peter: One more point. Last year the Arctic Monkeys released the fastest selling debut album ever. If record shops are dead – how did they manage to do that? Well, they made some of their songs available for free on the internet. People shared those songs and passed them on to friends and it all helped create a very positive ‘buzz’ about the Arctic Monkeys and when they released their record people wanted to buy it. That’s the sort of model the music business has to look at

Answer

A