Another interesting analysis of the travails of the global music biz, this one from Sathnam Sanghera in the Financial Times:

It is not hard to see why piracy is perceived as the biggest factor behind the industry's woes. There are now some 900m music files available to be downloaded free on the internet, compared with 345m files in February 2001, when Napster, the free file-sharing service, was at its peak.

According to the International Federation of the Phonographic Industry, the global trade body, four big markets - the US, Japan, Germany and Canada - accounted for 86 per cent of the overall global drop in value in 2001. Tellingly, these four countries are the most technologically advanced in terms of internet access, broadband penetration, compact disc burner penetration and sales of blank CD-Rs.

Hence the music industry's concerted campaign to tackle piracy, by shutting down Napster and other sites, prosecuting criminals who sell illegally copied CDs and developing new business models to distribute music legitimately online.

But could it be that some of this effort is misdirected? Might there be other, less convenient reasons why the $33.6bn-a-year global recorded music industry has entered a period of decline? Some executives are beginning to think so.

One theory is that the music industry is losing sales simply because consumers have so many other entertainment options to spend their time and money on: digital versatile discs, video games, television, mobile telephones. According to the IFPI, there was a 10 per cent drop in per capita music sales among the world's top five music markets, from $42 in 1999 to $38 in 2001, a decline many believe is due to the increasing popularity of other forms of entertainment.

"When I was a kid, I'd buy an album and spend hours listening to it and reading the sleeve notes and everything," says Hasse Breitholtz, chairman of BMG UK and Ireland. "But my kids get an album and they'll flick through a couple of tracks while they're on their mobile phone and playing on a computer or watching TV. They consume music differently - and when you're spending £20 a week on a mobile phone, how much money do you have to spend on music?"

Another factor, undoubtedly, is the maturation of the CD-replacement cycle in the world's largest music markets. Consumers are not repurchasing albums on CD that they previously owned on cassette or LP at the same rate that they did in the late 1980s and early 1990s.

But, as some executives concede, there may be a still more basic reason for the industry's predicament: namely, that the fall in sales has a lot to do with the poor quality of music being released.
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