Is Owning Music at an End?
When was the last time you purchased music? Not music streaming, but actually bought a physical product for money?
If you are like most consumers, it has probably been a long time since you purchased a CD. In the last decade, CD sales have fallen 80% from 450 million units to 89 million units! Consider the lasting impact of the declining sales, not only on the record industry, but also in manufacturing. Many of todays car companies (e.g., Tesla, Ford, Toyota) no longer even include a CD player in the car dashboard, and portable CD players are hard to find.
Even downloads of music have taken a big hit, decreasing 58% since the peak in 2012. Artists have also noted the trends; Bruce Springsteen released his latest box set exclusively on vinyl no CD options. CDs are doing well in some markets though in Japan, where streaming has not yet taken off, 72% of music sales were physical CDs. But look around U.S. retail stores where are the CDs even stocked?
Its not just streaming that has killed off the CD. Vinyl records have grown from less than a million units in 2007 to more than 14 million in 2017. Vinyl sales even hit a 25-year high last year and new vinyl record manufacturing is popping up to replace CD manufacturing.
Here are some numbers to note about music sales:
CD sales: 712 million units in 2001, to 88.6 million units in 2017.
Track downloads: 1.3 billion sold per year from 2011 2013; 555 million sold in 2017
Song streams: 118.1 billion in 2013; 618 billion in 2017
Vinyl: 990,000 units in 2007; 14.3 million units in 2017
Source: Knopper, S. (14 June, 2018). The end of owning music. Rolling Stone.
Discuss the following:
1. When did you last purchase music? What form was it in? Where did you last see CDs or vinyl music? What was the inventory level?
2. Discuss the stages in the product life cycle. What are the marketing objectives in each stage?
3. Into which stages of the product life cycle would you place various music products and services.
3. How would you reposition or revise products/services to that they can move into an earlier stage of the life cycle?
