Consumers have never had it so good.

March 15, 2016

Dominic McGonigal - C8 Associates

Back in 1993, when I described the Internet as ‘like a giant billboard in the sky and a virtual jukebox’ read here, I thought it would transform the consumer experience, but even I have been astonished at the change.

Before then, if you liked music, you could go to a gig, turn on the radio or buy a record. It’s hard to remember now, but music was not as ubiquitous back then. Listening to music was a conscious decision and one that generally took some effort, such as choosing a record, taking it out of the sleeve, putting it on the deck, and gently resting the stylus on the opening grooves.

How things have changed.

We can still go to gigs, listen to the radio and play a CD. But, now we have access to music wherever we are, and it’s music we can choose.

The first ten years of the Internet had limited impact on music consumption. Even when Napster launched in 1999, giving access, albeit illegally, to the entire music catalogue, dialup speeds meant that downloading an album took a couple of hours – hardly the instant response we are used to now.

Things started to change at the turn of the millennium, with the iPod (2001), iTunes (2003), YouTube (2005) and Spotify (2008) expanding the choices available. Now there are hundreds of legal online music services and many more that are unlicensed. There are even over-the-top services (mostly unlicensed) that will source music from anywhere according to your preferences.

And, of course, most of this music is free. Even the paid services, such as a Spotify premium service with 24/7 access to millions of tracks, is less than the cost of buying one CD per month (at pre-Internet prices).

So, there is now a massive choice for the consumer in terms of what they can get and how they can get it.

It is hardly surprising then, that music consumption is at an all-time high. Nielsen Soundscan reported 845m sales transactions for music in 2000. Ten years later, that doubled to 1.5bn, albeit with a lower transaction value. But, those figures are dwarfed by streaming. Never mind 1.5bn transactions in a year. YouTube reports 1bn users active every month. About half of those are reckoned to be music videos, often set to play in the background while the consumer is doing something else online.

Music fans have never had it so good. But what about the music industry?

The blog mini series Whose Music Is It, Anyway? is based on a guest lecture given by Dominic McGonigal at Trinity College, Dublin in February 2016.

Dominic McGonigal is Chairman of C8 Associates, a consultancy dedicated to taking creative businesses to the next level. He also chairs two creative startups, CICI and JazzUK. Read more at www.c8associates.com