As 2006 closes, two new reports give an interesting look inside the changing shape of the new music industry dubbed by many Music 2.0.
Despite declining CD sales, music is still generating huge profits for a number of previously unrelated industries including mobile and the technology sector. Heavyweights Apple, Motorola, Sprint, Nokia, SanDisk, LG, Verizon, Microsoft, Google, News Corp. and others are creating strong new revenue streams with music-related products. A new report The Moneymaker Roundup attempts to chart the diverse corners of the music industry which keeps diversifying and attracting large investments but remains difficult to accurately value.
The Digital Media Desktop Report takes a look at which music applications are gaining traction. MTV's Urge had 3.8% installation level in November up from a "humble" 0.7% rate during its debut month of May. Thanks to a smart settlement which bundled it into a number of Micorsoft applications, Rhapsody hit an installation percentage of 8.1% in November, a big gain over the 2.1% rate of a year ago. Microsoft's Windows Media Player easily ruled the terrain with an impressive 67.3% penetration level well above rivals iTunes and RealPlayer. It' is important to remember that this study measures installation and not use.
So much is made of delivery technologies and devices that it is important to remember that content (a.k.a great music) still drives this growth and it will be interesting to watch in 2007 if the music industry gets smarter about using music's power both for profit and for all important new career development. Or, as the reopened CBS Records or the fledgling MySpace label hints, will these new music industry players start investing in content of their own?