Where will we get our entertainment in 2013?

I’m of a generation that got its musical entertainment from the radio or from an assortment of changing media that included records, eight-track tapes, cassettes, and then CDs. When we liked a song or album well enough, we went to a mom-and-pop record store or Woolworth’s and bought it. In my little hometown, the hardware store sold records! Later, most of those places were replaced with chain record stores like MusicLand, Sam Goody’s, or Oz.

Clearly things have changed rapidly the last few years. My grown kids think it is only natural that they download songs from the Internet and play them back on their computers or iPods. Many kids don't know what a vinyl record is and fewer and fewer are familiar with CDs. My daughter managed several Sam Goody’s stores…until they all closed. She changed careers. She’s a nurse now.

I ran across some interesting research this week. Last year, one million fewer consumers bought a CD than in 2006. Many of those who quit buying their music on disks were teenagers. Almost half of all teenagers failed to purchase a single CD last year, and that age group has traditionally been the most consistent buyers of recorded music. That was a whopping 10% fewer teen CD buyers than the year before. At this pace, teens will no longer buy CDs at all by 2013.

On a related note, can you name the largest seller of pre-recorded music? It’s WalMart. But a solid number two is iTunes. Here’s an interesting fact: iTunes sold more than 20 million songs on Christmas Day 2007! Not an album or CD among them! 20 million individual tracks!

Overall music spending last year dropped 10%, and that’s a very sour note for the music business. Peer-to-peer music sharing is obviously taking a big bite out of music sales, but there is another reason numbers are down and I've already alluded to it. When we went to MusicLand and bought music, we bought an ALBUM. It contained ten or twelve songs, most of which we didn’t really care for, but if we simply had to have those two or three tracks we liked, we had no choice. Now you only download the tracks you want, a la carte, and only pay for the music you really desire. What if we get used to only buying the entertainment we want and no longer have to pay for what we don't?

There is already rumbling in Congress about forcing cable systems and satellite TV providers to allow customers to choose and pay for only the channels they want to receive. Would you continue to pay for Univision and Brigham Young University TV to get HBO on DirecTV if you didn’t have to? Or cough up money for all six HBO channels just to get the main one?
I suppose the big question is can the cable companies and DirecTV/Dish stay in business without their tiered-pricing business model? Or will they go the way of Sam Goody’s and MusicLand? After all, we will soon be able to order up whatever movie or TV show we want to watch on the Internet, piped directly to our HDTVs. And we can already watch many episodes of our favorite shows on our computers, mostly without commercial interruption, and do it anytime we want, not just when the network shoots it down to the affiliates.

Who needs the cable guy anymore?

Don N4KC