Unbundling the chief factor for the music industry decline

November 14, 2007

Just found this old The Register article from October.
It reports about a “confidental” Capgemini paper that analyses “a value gap” in the music industry, the amount sound recordings revenue has fallen in the UK since 2004.

Capgemini calculates that of £480m lost to the industry since 2004, £368m was the result of format changes: principally the unbundling of the CD into an “a la carte” selection of digital songs. Of the remainder, 18 per cent was lost to piracy.

I have no clue how you get this numbers and really would like to read this report, but I think the conclusion that unbundling is a chief factor for the current situation in the music industry is absolutely true. The product characteristic has changed cause of the digitalisation. Unbundling was a new option that emerged, but it`s definitely the wrong pricing strategy for the industry. Bundling was for years one of the success factors in the music industry and still is in my opinion. The “old” album bundle is (obviously) not acceptable for most consumers in the digital age so the industry has to make a new offer, a new deal: Bigger bundles! Subscription Services! That`s the chance.

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