Research claims that the music industry needs to rapidly change its business model to survive. It claims that the percentage of music buyers purchasing from legal sources has fallen though music fans do pay on average for 3.22 legal downloads each months whilst 51% of the average digital music collection is derived from CD’s (presumably purchased or ‘borrowed’).
In the UK the competition to the market leader in legal download, iTunes is slight with Tesco re-launching its digital downloads service still featuring the highly unpopular digital rights management (at the insistence of the music labels) and like many sites still tied to the Windows platform whilst Amazon is yet to launch a DRM free mp3 service in the UK and Europe ,rumoured to launch in the Autumn of 2008, leaving legal subscription service emusic and the advert supported we7 (currently propped up by a cash injection from Peter Gabriel).
Meanwhile Last.fm, now a part of CBS allows users to listen to much of their streaming music on limited demand whilst pointing to the legal sources to purchase a track that may take the listeners fancy.
The research by The Leading Question and Music Ally urges the music industry to experiment with bundling music with other value added products, trying new release schedules and formats and above all to realise that free music can still generate revenues from other complimentary sources.