More Eyeballs, Less Money

When NPD Group released its latest sales stats for the music industry this week, the wrong-headed headline at most sites focused on the Apple connection. According to 2007 sales, iTunes is now the second most important music retailer, right behind Wal-Mart. Granted, this is a landmark in digital content history, but the scarier story for all publishing brands is in the deeper stats. NPD reports that 2007 saw more music acquired overall (up 6%), mostly from digital purchases, but the actual level of music spending declined 10%. In other words, in a digital world, publishers are struggling to extract the same value even from an expanding audience. This is something we have been discussing in the pages of MIN for years now. The move from physical to digital media surely carries cost savings but it also represents a significant decline in available revenue. How many online ad impressions and audience does it take to balance a lost page of print advertising or a lost magazine subscriber? The music industry continues to be the canary in the coal mine of digital transformation, and its song is not sweet.