Rags on eMarketer: More People Buying Less Music (Music2.0 is near...: The Flatrate for Music)

Rags Gupta has a good comment here: Rags's Soapbox: eMarketer: More People Buying Less Music.

"eMarketer came out with a report on music purchasing using data from Bridge Ratings and the Census.  32% of the US population purchased music last year, compared with 27% the year before and 20% in 1980.  Of course, due to the unbundling of the album online, the $120 spent per capita in 2006 is much lower than the $228 per capita number just 6 years earlier in 2000, which results in a drop in overall revenues..."

Here is my 5 cents: there is a very clear trend here (and it's been visible for a while:) and it's pointing towards the concept of music as a 'social utility', based on Flat Rate Access. People will 'buy' a lot more if the 'entry price' is much lower.  If we can get 95% of the population to pay $1 per week for music (whether they would actually pay or whether the payment is bundled or ad-supported) - the music industry (or shall we say, the CREATORS?) can make a lot more money with music than ever before.  Think about the economics: 300 Million US residents generating $1.2 Billion USD per MONTH, just for access to music - and many of them would STILL buy fixed media products or a la carte services, i.e. these revenues would NOT be substitutional (at least not for the most part). Can we get $2 per week?  Maybe. But it would need to be adjusted around the world, anyway, with, say 1 GBP, 1 Euro - and fractions thereof in India or China.

Consider that people still go to the movies although they have cable TV, and they still go to concerts although the have Sirius and XM.  If this sounds familiar... yes, it's the CableTV model and the Cell Phone model: get everyone to JOIN with very low prices, get them hooked, deliver real value - and then upsell.

Here comes the Flat Rate for music.  Read this and watch this.