Million Media

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Analysis: Digital Store Trends


I was recently asked to be a judge for the Best Music Store at the BT Digital Music Awards. I had to assess over a dozen online stores, and of course, through my work with The Orchard I get to talk to stores all over Europe. That said, here are some thoughts (without giving away any names).record_shop

  • 320 MP3 becoming standard : This is a very noticeable shift, and creates a major USP apart from iTunes who are still locked in 128 kbs. I’ve been saying for years, I think there will be a backlash when people realise the files they bought from iTunes are the lowest quality you can get away with. The 320 format provides quality worth paying for and is higher than most streams and P2P files which are still predominantly 128/192
  • Conformist pricing: The industry appears to be locked in to exactly the same pricing model – either 79p or 99p. These two prices were derived by marketing people as a convenient number – nothing to do with the value of a track or economics. I was at Sony Music when they simply took 99c (which had been handed to them by Apple) and worked backwards to derive their own PPD – no wonder every store adheres to the same model. However, many stores have moved away from fixed pricing but they tend to increase the price, whilst very few lower the price which I believe is essential.
  • A la Carte is currently winning. This model is hands-down the favoured way of selling content. There are very few subscription services and none which include Major label content (unless you count the completely useless Napster-to-go or tethered downloads model). To fill up your iPod, therefore, you need to spend £40,000. And if your computer crashes, you still have no way to re-download what you bought. And people wonder why digital isn’t taking off?
  • Community is not a feature: In my post on July 3rd, I commented on how many new stores I was in discussions with were integrating social networking features. It’s striking how few of the current stores have any form of community or word-of-mouth beyond best selling charts and recommendations.
  • Where are the Majors? The vast majority of stores I judged featured indie or dance content. They were making profits selling MP3’s to fans of music. None, that is NONE, of the major high street retailers were represented. In addition, of the few stores who carry major label content only a couple were represented. It simply beggars belief that the Major Record companies tolerate this situation and judging by some record company chairmen comments, may even restrict access further.

OK, a very generalised overview but it’s plain to see there is still a very long way to go!

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About Neil

Neil Cartwright founded Million Media in 2006 with the aim to help people understand digital marketing and use it to their advantage. The vision hasn't changed but the technology has.

One comment on “Analysis: Digital Store Trends

  1. musicnuvo
    August 22, 2007

    Well said. Curious – what would be your ideal of the way social networking features would be integrated into a digital store? Your July 3rd post seemed to imply that social networking is important, but some sites go too far… would love to hear of some good examples!

    -Matt

    ____________________________
    http://musicnuvo.wordpress.com

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This entry was posted on August 14, 2007 by in music, retail.
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