eMarketer has published some new predictions regarding both worldwide and US music spending, and neither look particularly good for the industry. Overall, eMarketer expects worldwide spending to decrease from $31.8 billion in 2006 to $26.2 billion in 2011. Analyst Paul Verna says:
“The situation in the industry has gotten so bad that many top recording artists are steering clear of music companies and signing up with brand marketers whose expertise lies outside of the recording industry. Witness the alliances between Paul McCartney and Starbucks, the Spice Girls and Victoria’s Secret, and Madonna and Live Nation.”
The model has been broken for decades now. I think instead of trying to fix it (desperately trying to keep the CD alive, eliminating singles, punishing the fans who keep their product in the public eye, by shutting down file sharing) the music industry will have do some aggressive restructuring in order to survive the decade. Part of that will be letting go of the $15-18 CD pricing model once and for all.