It seems almost odd: the very man who has played a large part in the decline of an industry is now the one most bullish on its future prospects. At the e-G8 conference in Paris, Napster co-founder Sean Parker said that a “bottom” was ahead for the music industry due to new services on the horizon.
Indeed, the industry has lost three-quarters of its value, falling from a $45 billion annual business to about $12 billion. Clearly, a new business model is needed.
Parker is an investor in music service Spotify, and said that the back catalogues that are being made available through services like it are helping to drive growth. While traditional digital music stores were good for selling top-40 hits and singles, they so far have not done well in selling most back-catalogue tracks.
There’s a good reason for that: most of those tracks don’t have the same perceived value that a new song has, thus a user may balk at paying full price for it. However, with streaming services and all-you-can-consume plans now in vogue, suddenly there is a demand for these tracks.
It’s also the reason why Parker made a surprising bid to buy a portion of Warner Music Group, which was unsuccessful. Apparently he believes in what he’s saying, and ready to put at risk a significant portion of his sizable fortune behind it.
Is he right? Are digital music subscriptions finally going to gain widespread acceptance — especially from Apple, which holds a near stranglehold on the industry? I guess we’ll find out.