Physical is dead! Well... not completely, but think of physical sales as a 1962 Chevy Impala - A niche group of people still want to drive one, but most people would rather roll in a Hybrid. This begs the question, "If artists and labels stop selling albums, where does the money come from?"
Great question! The internet has opened up a wealth of potential business models from affiliate-oriented programs to ad-supported streaming, just to name a few examples.
Instead of relying on the antiquated notion of selling a square object to consumers for $15.99 a pop, artists and labels should band together to think of new ways to bring in revenue; not just in the digital forum, but in all marketplaces.
A few key points to remember:
* There will be a jump in online sales in the immediate future - According to Amazon.com (world's largest online retailer) and Amway (a company of legal Ponzi schemers), within the next 10 years consumers will be buying 70% of their goods online. This will be an extremely large shift from 35% in 2008.
* This isn't just young consumers buying music and movies in the digital realm - Everything from cosmetics to food is currently purchased online by a wide range of consumers; even my old boss at Disney (an experienced corporate lawyer in his 50s) has admitted to buying his groceries via an "online delivery service."
* The browser is the new iPod - According to Rio Caraeff (EVP UMG eLabs), the album is an antiquated notion in the face of technology that favors portability and instant gratification.
Hey Labels! - I've explored and conquered this notion in my New Media Plan. Shoot me an e-mail to set up an interview.
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