The future of the music industry was evident last year with the release of the digitally remastered Beatles albums. The release coincided with the release of a Beatles video game creating an extra revenue stream. Up until now, the music business had relied on CD sales as the cash engine. Now it is turning to other platforms and that has something that has implications for other industries, like for example newspapers. It's a trend I examine in my column here.
In this interview, Harvard Business School professor Anita Elberse says the biggest challenge for the industry is that people are not buying albums. With digital services, they're cherry picking their favorite pieces of music from albums. It's creating the trend of bundling and unbundling, she says, and music companies need to change their business models completely. Song prices are relatively low, so she says record labels might look at pushing for higher prices online or sequentially releasing albums. She also says the record labels did themselves a disservice by giving Apple so much power.
The problem with that argument is that there is a serious question as to whether people would pay more for individual tracks.
What this does signal however is the end of the album. Record labels will need to create new platforms to generate revenue. The Beatles video game was one example. We can expect plenty more over the next few years. But say goodbye to the album.
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