I’ll admit to being a Napster user back in 1999 and 2000. The world’s first popular ‘peer-to-peer’ music sharing service was irresistible. It was magical at the time, to be able to find virtually any song ever recorded and have it available for listening minutes later. The party went on for some time before the law slowly caught up with Napster and Steve Jobs convinced the music industry that digital downloads were the way of the future. By making it easy to buy and download music from his iTunes store, Jobs proved that convenience beats low prices. People want to pay, if only they have the opportunity to. And so began a revolution in the industry with consolidation of major record labels and thousands of jobs made redundant. Now it’s all changing again.
Leading global information and measurement company, Nielsen published a report on the industry last week showing that digital music consumption in the USA is shifting away from traditional download platforms such as iTunes and toward unlimited streaming services like Spotify and Rdio. On-demand streaming has risen 42% when compared with the first half of last year while digital downloads are down 12%.