Technology and Consumer Media - A Neat Research Resource

Lots has been written already on this blog about the decline in demand for audio and visual material on physical media such as CD and DVDs. The associated decline in the financial performance of retailers such as Woolworths, HMV and publishers like EMI is also well documented.

This feature in the Independent is worth adding to students research notes, mainly because it provides some useful summary data on the absolute changes in demand for various music products and also the shift in market share enjoyed by digital media.

For example:

- UK CD album sales have fallen from 151 million in 2007 to approximately 86 million in 2011 - a fall of around 44 per cent

- UK DVD sales have also fallen - from 345 million in 2007 to around 260 million in 2011, with the market falling by around 10 per cent per year.

- Digital sales have taken a large share of the market when measures by volume (units shipped). Digital music now has 58% of the market by volume, but just 21% of market revenues (since digital prices are much lower than their physical alternatives

- Almost all music singles are now sold digitally

The main focus of the business media has been on the demise of high street retailers who previously dominated the sale of music and video. A neat summary from the article highlights the three main external influences which have made life so difficult for the likes of HMV:

“Three key trends have combined to put the squeeze on established entertainment retailers: the rise of the supermarkets; the growing popularity of mail-order companies such as Amazon and Play.com (which have been able to exploit offshore VAT loopholes to keep prices low); and the shift from physical formats to digital, as consumers flock to Apple’s iTunes and other sites.”

I like the references to how firms are trying to help consumers bridge the divide between physical and digital media - as part of a strategy to remain competitive. For example, Tesco has bought the online movie rental firm Blinkbox. Now consumers can buy the DVD from Tesco and get digital access from Blinkbox bundled together for the same price.

There is also reference to the growing use of cloud-based storage (a key technological change in many markets).

Well worth a read.