The music industry will have to change its tune to survive the challenges posed by e-commerce, according to a new report by Andersen Consulting.
New Media, New Value: the Music Revolution, presented in Dublin yesterday, says the challenge is threefold.
Dramatic increases in online CD sales from retail outlets such as Amazon.com - a 400 per cent increase in 1998 - have challenged the hegemony of highstreet record shops.
The proliferation of cheap and portable electronic consumer devices such as the MP3 player, allow consumers to download high-quality audio material from the Internet - an estimated billion downloads in 1999 - has made a nonsense of the idea of brand-names and copyright.
Rapid developments in interactive digital television, radio and mobile phones will ensure that the new technology will have mass market appeal.
All three developments are already transforming the ways in which consumers buy, listen to and store music.
Mr Gordon McConnell of Andersen Consulting said the revolution in the music business was unstoppable and companies should anticipate change rather than react to it.
"New media represent a massive opportunity for the music industry by creating a number of new ways to build value, through expanding the market. But the music industry can no longer say `take it or leave it' to consumers. Consumers have market power which was unimaginable in 1969."
