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Last Updated: Monday, 24 November, 2003, 12:26 GMT
All change for the music business

By Stephen Evans
BBC North America Business Correspondent

The rise of digital music is transforming the way Americans listen to music - with far-reaching consequences for the industry.

Is this the year when we finally say good-bye to the hi-fi?

CD store
CD sales have suffered from digital downloads
Time was when no self-respecting, aspiring US household would be complete without the tower of gizmos like amplifiers, radios and CD players, even turntables, replete with a tangle of wires in the back.

Like an altar in a shrine to music, they would stand as monuments to personal achievement.

Their technical specifications became everybody's small talk.

"Woofers", "tweeters" and "graphic equalisers" were the terms that any self-respecting coolista needed for cred.

But in the first half of this year, sales of such gadgets fell by nearly a third.

Five years ago, about a quarter of a million hi-fis were sold across America.

This year, it will be less than a tenth that number.

Different strokes

It's not that we're listening to less music, it's just that we're listening to it in different ways.

Turning sound into digits makes it much more available through lap-tops and every other form of computer, and virtually every new device from a phone to a personal organiser is a computer.

And DVDs play not just pictures, of course, but also digital sound.

The biggest change is the ability to download music.

Portable devices like Apple's iPod or Dell's "digital jukebox" are able to store thousands of tracks in your shirt pocket.

Forrester Research, which watches developments in technology, reckons that by 2008 one-third of music sales will come from downloads.

End of the album

This changes the physical furniture we have in our homes - out goes the tower of audio equipment - but it also might change the sort of music we listen to.

Madonna's American Life cover
Albums could become less important in the future
Does downloading kill the album?

The advent of LPs in the 1950s created the album as a concept.

Songs were combined in a particular order.

The combination of music and the art-work on the cover were important parts of the creative process.

But downloading makes the track paramount.

People create their own albums with a variety of tracks, sometimes from diverse genres.

With vinyl, the cost of producing an album wasn't that much higher than the cost of producing a single, but the price charged could be much higher.

It may be that the new technology re-asserts the primacy of the single.

It may also mean that instead of bands closeting themselves in country houses for months, brain-storming to create their next, eagerly-awaited album, they can write singles which are released on the internet virtually immediately.

The process becomes one of continuous release rather than a single big event.

Tactile feel

One drawback of the new, downloading technology is that it doesn't offer customers much to read or hold in their hands.

There was something about lovingly pulling that album off the bedroom shelf in your teens, and sliding out the vinyl, smoothing the cover with your hand and gazing at the art-work.

Owning a record became part of growing up, and the continued ownership of certain albums held a strong nostalgic appeal throughout adulthood.

The industry is working on how to combine instant downloading technology with long-lasting physical ownership, but it's hard to see how the two can be combined.

Changing the industry

This revolution driven by technology is not only transforming our homes, but also the structure of the music business.

The industry, though, has long been notoriously slow to embrace new ways.

It thought, for example, that radio would cut its sales of records (in fact, it did the opposite).

It is now belatedly embracing on-line sales (after seeing sales of CDs slump because of free downloads).

But the acceptance has been reluctant and late.

And as the companies rush to catch up, some of them will fall by the way.

Mergers are increasingly the order of the day.

EMI quits Time Warner music race
24 Nov 03  |  Business
Mixing up the music industry
19 Nov 03  |  Business
Music giants join forces
06 Nov 03  |  Business

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