Record industry slammed for MP3 stance
Published: 20 Jul 1999 13:10 BST
In a report published ahead of this weeks fourth annual Plug.In music forum in New York, research firm Jupiter has slammed the industry for its obsession with getting rid of MP3. It comes just a week after another Jupiter report concluded the major labels had better embrace MP3 as, like it or not, it was here to stay.
"Industry players have been so eager to dampen any momentum MP3 had as a format that the great benefits of digital distribution -- including use of MP3 -- remain vastly underexploited," said senior Jupiter analyst Mark Mooradian.
Adrian Strain, spokesman of the International Federation of the Phonographic Industry (IFPI) hit back at claims the industry was dragging its heels on digital distribution. "The record industry could not possibly be accused of holding back digital distribution," he said. "Look at the SDMI, and the deals being done to promote digital distribution."
The SDMI has also come under criticism in recent weeks for its confused position on MP3 and its failure to address copyright issues in the standards issued for portable players. Emusic boss Bob Kohn predicted the SDMI would be dead within the year.
Sales for digitally distributed music will account for $147m by 2003 according to Jupiter's projections -- a tiny proportion of the billions made by the record industry. Analysts predict, in the near term, industry players will concentrate on developing secure distribution standards to prevent piracy and only dabble with digital distribution for promotions, etc. However, within the next five years, the labels will be forced to embrace the Internet and offer back catalogue and new releases for digital downloading Jupiter predicts.
In the near future it is retailers rather than labels that have the most to fear according to Jupiter. Online sales of CDs, tapes and records will account for 14 percent of the total US retail market by 2003 it predicts and by 2003, 33 million online users, nearly a quarter, will purchase music on the Net.
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