Friday, October 5, 2007

Sony BMG: “We Are Projecting Up To 40% Of US Sales Coming From Digital in 2008”

Digital Music Forum West 2007 - Many of the Thursday morning panels acknowledged the fact that, in this digital age, people are consuming more music than ever. They are just not paying for it. Digital revenues are still not making up for the drop in sales of CDs. However, many panelists agreed that the industry is now finally moving in the right way by dropping DRM-restrictions, moving to ad-supported models and variable pricing in order to find individual price-points that works for everyone.

Thomas Hesse, President, Global Digital Business & U. S. Sales, Sony BMG Music Entertainment, who was the morning keynote mentioned that Sony BMG are at 30% digital sales in the US this year and projecting up to 40% next year. As far as new ideas for monetizing music, prepaid download cards and gift cards can, to some extent, replace physical CDs at retail, especially when combined with free location-specific WiFi downloads like Starbucks and iTunes are going to launch.

Other opportunity that were mentioned by many of the morning panelists for the music industry is on the mobile platform and in-games.“One billion cell phones will be replaced this year and 95% of new cell phones can play music. That is a huge opportunity”, said Dave Jaworski, CEO of Pasalong Networks. Thomas Hesse projected around 17% of Sony BMG sales coming from digital for this year on a global scale, but mentioned that he thinks that it should be a much bigger business, especially when it comes to mobile offerings. Article

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