I thoroughly enjoyed reading your blog about the music industry, and how it has been affected by online file-sharing. Yesterday, SonyBMG released its predicted net income for the 2007 fiscal year. Although the major media conglomerate managed to gain $3.7billion, digital sales saw SonyBMG down 4 per cent, failing to offset the decline in the CD market (Blair, G, 2008).
Over the past year, Sony BMG, as one of the largest ‘dinosaurs’ remaining, has undergone radical changes to avoid extinction. In January 2008, Sony BMG announced they were going to drop digital rights management (DRM) and compete against Apple for valuable downloadable revenues (Holahan, 2008). Sony BMG is the last of the four major record labels to do so (the others being Warner Music Group, EMI and Vivendi [Universial Music Group]). DRM software was an attempt to stop illegal peer-to-peer sharing of music, though the principal analyst of a technology research company, Enderle (cited in Holahan, 2008) claims, “it (DRM) was hurting folks who were trying to follow the rules more than the folks who were pirating the music.”
On April 3, 2008, Sony BMG along with Warner Music and Universal Music signed a joint venture with MySpace Music. “We think of ourselves as undergoing a very fundamental transformation from being a CD company to a multirevenue stream, multibusiness company," says Thomas Hesse, president of Sony BMG's global digital business (Holahan, 2008).
With CD sales decreasing, major record companies are attempting to make money online through advertising, promotion and selling items such as concert tickets and T-shirts (Holahan, 2008). It is evident both from your blog and the actions of SonyBMG that, although the traditional music industry is far from dead, drastic measures are being taken to ensure the music lives forever... in the pockets of record companies.
References
Blair, G. 2008. Sony sees net income up 192%. May 14. THR.com. http://www.hollywoodreporter.com/hr/content_display/world/news/e3i9808673cbfb6ec1f5fd9eb117a2a0837(Accessed May 15, 2008).
Holahan, C. 2008. Sony BMG Plans to Drop DRM. January 4. Business Week. http://www.businessweek.com/technology/content/jan2008/tc2008013_398775.htm (Accessed May 15, 2008)
Holahan, C. 2008. The Record Labels’ Digital Future. April 4. Business Week. http://www.businessweek.com/technology/content/apr2008/tc2008043_871448.htm?campaign_id=technology_AK (Accessed May 15, 2008).
