Unbundled music — a lesson for all

Music industry sales figures from 2005 provide the clearest example yet of what I call the shift to “Unbundled Media.” The numbers from Nielsen SoundScan, as reported in today’s Tennessean, show album/CD sales dipping last year, while legal digital downloads rose by triple digits.

While this clearly shows consumer preferences, it is not what the industry wants to see.
“Bottom line: It was a down year,” said Geoff Mayfield, director of charts and senior analyst for Billboard magazine, pointing out that high gas prices may have affected entertainment spending.

“Spinning it as anything but that would be like gift wrapping the garbage,” he said.

That’s a little hard to swallow, since the numbers show overall sales of CDs, ringtones, albums and digital downloads passed the 1 billion mark in 2005. Of course, the industry only makes pennies on downloads versus dollars on CD sales.

This industry is a harbinger — or perhaps now a testament — of what’s happening the media world altogether. The unbundling of TV is taking place before our eyes, as networks and producers offer new distribution models almost every day. The local level is next.

As with any disruptive innovation, we have two choices: We can spend our resources in denial and protecting our business models, or we can jump into the disruption with both feet.

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