Round Up

I was on the road last week visiting JupiterResearch clients throughout the Nordic region and while I was away quite a lot happened in the digital music space: Apple’s new iPod, Apple’s EU iTunes Music Store and rumours of BMG/Sony working with a P2P network.

The expansion of the ITS across European Union territories is a valuable addition to the European digital music landscape and helps redress the big 3 skew (i.e. FR, UK and DE) that has characterized recent developments. However there still seems to be some room for growth. Firstly the new stores are only available in EU countries which have adopted the Euro. Also, looking at the most downloaded tracks charts in each local micro site either:
a) European iPod owners have a particular penchant for international content
b) domestic catalogue is thin on the ground
For example :
Finland – 59% of recorded music sales are domestic artists. None of the ITS top 10 are Finish
Italy – 45% of recorded music sales are domestic artists. 2 of the ITS top 10 are Italian
Spain – 38% of recorded music sales are domestic artists. None of the ITS top 10 are Spanish (1 is Italian though)
Netherlands – 20% of recorded music sales are domestic artists. None of the ITS top 10 are Dutch (though US band Hoobastank sound Dutch)

These teething quibbles aside, the expansion of the ITS outside of the three major markets is a crucial asset in Europe’s transition to a legitimate market. Which brings us nicely onto the rumours of Sony/BMG developing a music service that utilizes file sharing technology (Grockster if reports are to be believed). Regardless of whether this particular development is true, we have been saying at JupiterResearch for some time that you cannot simply dismiss file sharing. Prior to this year’s developments European digital music fans were faced with a content vacuum online and this was filled willingly by illegal file sharing networks. Thus many of the would be legitimate service customers are to be found in the file sharing networks. Advertising within these networks and developing clients to encourage purchasing within them are probably better customer conversion tactics than law suits.

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