HOME Technology Nov 2007
Download deluge continues

Digital dominates the mix
Legal digital downloads now dominate the New Zealand pop charts with online consumer activity clearly driving the market, effectively killing off sales of physical CD singles.

From May the Recording Industry Association (RIANZ) added digital downloads into the mix with counter sales and radio airplay, to more accurately reflect what Kiwis are listening to, when determining its weekly its sales charts.

Now songs or albums downloaded to computers, mobile phones or MP3 players from Amplifier, Digirama, iTunes, Telecom or Vodafone, are now treated the same as a song or album purchased from a storefront music retailer.

Paul Kennedy, director of Media Sauce, which compiles the local music charts for RIANZ, says music lovers are now back in charge of what ends up on the charts as digital sales include all albums tracks as well as designated ‘singles’ prioritised by record companies.
In the past a major record label might release a single or two ahead of an album release, today once the album is out all tracks have chart potential, although diversity can suffer when artists like Justin Timberlake or Akon end up hogging several places.

Previously the charts were based on a 50/50 ratio from 3000-4000 physical CD sales plus analysis of what was being played on the radio each week. Today there are around 40,000 sales a week and 90 percent of which are digital; chart positions are 75 percent determined by sales and 25 percent airplay.

And it’s a fairly lucrative business, with 40,000 tracks downloaded a week at an average of $1.80 each that’s around $3.7 million a year. Physical single sales were in decline anyway, digital downloads just finished them off.

The local legal download market has gained major momentum with Apple Computer finally launching its two million song iTunes store in December 2006, giving the local market access the same features, pricing and seamless integration with the iPod, that made iTunes the most popular music jukebox and online music store worldwide.

Coketunes - previously the biggest legal download site in the country - wound up in August, claiming its demise had nothing to do with competition from other sites, and its job in helping establish the market was completed. US CD sales were down nearly 20 percent in the first half of the year and while 2007 was a good year for Kiwi music, there had clearly been a slow decline in CD sales over the past four years.

Meanwhile the Copyright (New Technologies and Performers' Rights) Amendment Bill passed in late 2007 (but still awaiting the final stamp of approval) clarifies that music lovers can copy songs across formats once for personal use, if they keep hold of the original. However there is an ‘opt out’ option for copyright holders to prevent even that happening. Copying borrowed or rented CDs remains illegal as does making copies for friends.


The previous law allowed video taping from TV but only if programmes were kept for “no longer than is necessary for viewing…at a more convenient time”. Copying DVDs or videotapes to devices such as an iPod is illegal.

While illegal downloads and piracy continue unabated, recorded music is now competing with video games and other forms of entertainment for a share of the disposable income.  In fact many non-traditional outlets are spreading the sales of music through a much wider distribution channel than ever before.

Starbucks is selling compilations customers can make up while sipping their favourite brew and Walt Disney is offering a new CD format including digital magazines, song lyrics, band photos and other extra features to try and reverse declining sales.  Online sales are booming worldwide and the recording industry is still doing was doing very well, thank you.


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