HITS Daily Double
[Garland] went on to say that as iTunes nears the incredible 5 billion-download milestone, peer-to-peer downloads number a billion per month.


Data Trends and Analysis From Our Man in (Zzzzzz) S.F.
The last day of Digital NARM included a couple more seminars.

The first was Data Trends and Analysis, hosted by Gartner Research’s Michael McGuire, including panelists like Big Champagne’s Eric Garland, SoundThinking NY’s Gwen Lipsky, Jupiter Research’s Barry Parr and M:MetricsJen Wu.

The headline came late in the proceedings when Parr said: “There’s still a great deal we don’t know.” Earlier he cited research showing that even as digital continues to take a bigger piece of the pie, the pie itself is shrinking.

Garland, who said that people are now participating in music more than every before, gave some dire statistics: “The real numbers on piracy are quite distressing.” He went on to say that as iTunes nears the incredible 5 billion-download milestone, peer-to-peer downloads number a billion per month. Even more disturbing is his contention that when consumers who are using both Limewire and iTunes stop stealing, it doesn’t necessarily mean that they will spend more on music.

Wu, who tracks mobile activity, contended that transferring of music from device to device was an opportunity rather than a threat. Her argument was that this was a person-to-person recommendation rather than massive file-trading. On that note, Lipsky said that people 18-24 were no longer really consumers, but in fact have become distributors of content: many times with commentary.

Garland also noted that because consumers are downloading so much content, most of illegal downloads only get listened to once. The good news for the music industry comes at Hollywood’s expense, he says: “Stealers are now downloading many things other than music, including TV shows and movies.”

Finally the ever-present question of DRM came up, with Parr calling it “broken” and Wu adding: “We need to give the best options to the consumer and DRM isn’t one of them.” Garland added: “Users want the medium of least resistance.” He added that people keep hearing that DRM is coming to an end, but that is not true.

“DRM is not dead,” Garland concluded. “We are going to be talking about the death of DRM for a very long time to come.”

The Big Four label groups got to lay out their digital agenda on a panel that included digital honchos like Sony BMG’s Thomas Hesse, UMG’s Amanda Marks, EMI’s Douglas Merrill and WMG’s Michael Nash.

Hesse spoke of the need for increased bundling of various products, pointing to SBMG’s recent Nokia deal as well as the ad-funded music initiatives such as their MySpace plan. But he knew the room he was speaking to when he added: “At the core, existing partnerships will remain. The CD will continue to be there. It’s here to stay.” He also stressed the need to think globally whenever considering any new program involving the digital world.

Marks took exception to the common thought that ringtones and mastertones are on the wane. “Not for us,” she said. She pointed to Lil Wayne’s recent huge mastertone sales and said that if you have the right content, they are still a potent force. “It’s all about timing the trajectory,” and brought up once again the need for bundling them to achieve an even greater uptick. However she did agree that browsing interfaces need to be improved, echoing sentiments expressed in yesterday’s mobile panel.

Merrill, who just joined EMI from Google, explained that any mass market eventually vanishes and that niche markets grow more rapidly, expressing the need to act quickly. He said that Google created the democratization of information based on free. Pointing to Google’s Book Search, he said that book’s searched on the free service actually increased sales. “Helping people find content helps sell content,” he said. Illustrating a point, taking us back to the first printed Guttenberg Bible, he said: “Tech change has always destroyed or radically changed the status quo.”

Nash maintained: “We can figure this out.” He also brought up the need for providing premium album bundling, making bundling far and away the most used term over the last two days of Digital NARM. He called music consumers “mixers” that gather content in all ways, and promised the retail heavy crowd that there were plenty of digital physical products that WMG would be bringing to market such as USB sticks, digital gift cards and music merch. He also leaked that a digital Wal-Mart deal was about to be announced mirroring the Amazon deal WMG cut last year.

Marks concluded that we can't be afraid to fail, "You have to try stuff."