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Tag: decline

  • Music shipments decline by 5.8 per cent in the US

    MUMBAI: Music shipments of all physical formats in America to retail and other outlets declined by 5.8 per cent in the first half of the year.

    At the same time a growing legal digital marketplace helped to offset the overall decline, according to data released by the Recording Industry Association of America (RIAA).

    While the area of legal digital downloads showed some progress, the music industry continues to be impacted by illegal online downloading, rampant unauthourised CD burning and traditional counterfeiting of physical products. These various forms of piracy are the primary culprits for a 6.5 per cent decline in CD shipments from record companies to various distribution channels the RIAA states.

    Even as the overall market declined, legal digital sales of singles grew 154 per cent in the first six months of 2005, compared to January – June of 2004. In the first half of 2005, 148.7 million digital singles were downloaded, compared to 58.6 million in the first half of 2004; 5.1 million full-length albums were downloaded from legal online music sites in 2005, compared to 1.5 million full-length albums downloaded in the first half of 2004. The total estimated retail value of digital singles and albums sold in the first half of 2005 was $198 million, compared with $73 million for the first half of 2004 (estimate derived using current prices of $0.99 and $9.99, respectively).

    Despite important and effective strides by the music community to begin to slow the effects of piracy, it remains an ongoing threat to the legitimate sale of music online and in record stores. Analysis by the NPD Group reveals that burned CDs accounted for 29 per cent of music obtained by listeners in 2004. The NPD study showed that among households with Internet access that are burning CDs, 17 per cent of those are burning more than 10 CDs per month. According to Nielsen SoundScan, record store sales of the Top 200 albums, the most frequently illegally burned and downloaded, declined from 102.8 million units to 93 million units, when comparing the first half of 2005 versus the first half of 2004.

    When shipments of all physical products are combined with sales of digital downloads, the total unit count for the first half of the year is 343.9 million, which represents a 2.4 per cent decline. The growth and potential of the emerging digital marketplace is also reflected in new RIAA surveys and analysis. According to a June 2005 survey by Public Opinion Strategies (POS), on behalf of the RIAA, twice as many adults (ages 18 – 54) have paid to download music as compared to a similar survey last year – 13 per cent in 2005 versus six per cent in June 2004.

    Additionally, according to that same survey, the percentage of adults who have paid to download music legally is now higher than the number of adults who have downloaded music from an illegal peer-to-peer network – 13 per cent have paid to download while 12 per cent say that they have downloaded illegally from a peer-to-peer site.

    RIAA chairman and CEO Mitch Bainwol said, “Even as we continue to transform ourselves and transition to the digital marketplace, the music community is still suffering enormously from the impact of various forms of music theft. One of the stories we need to repeatedly tell in the coming months is that illegal downloading and burning continue to compromise the industry’s ability to invest in the new bands of tomorrow.

    “At the same time we are encouraged by the growth of the digital music marketplace. Music labels are working closely with their technology partners to offer fans an incredible, high-quality experience – from download to subscription to legal peer-to-peer sites. And by handing down the unanimous Grokster decision, the Supreme Court has done its part to help level the playing field for all legitimate players. The debate about right and wrong has been settled.”

    Bainwol also said that the music companies have worked diligently over the last several years to respond to consumers’ demands by offering high-value music experiences. Fans’ passion for music, as well as the importance that it plays in their lives, is as high as ever. According to a survey conducted for the RIAA by Taylor Research, 91 per cent of adults polled said that listening to music is important in their daily lives.

    In addition to an unprecedented array of digital ways to access music – download services, subscription services, nascent legal peer-to-peer services, cell phone ring tones and ring tunes, and Internet and satellite radio – music companies are working closely with retailers and others to develop exciting high-value offerings in physical formats. DualDisc, a new product that combines music, film and video on a single, two-sided disc, shipped more than seven million units in the first half of 2005, including two consecutive No. 1 albums earlier in the year.

    Bainwol adds, “In a relatively short amount of time, this industry has revolutionised itself and the way it does business. We are responding to consumers, working with our partners in various technology industries, and delivering some of the best music ever to our fans.”

  • Traditional media shares in ad spends set to decline

    MUMBAI: Across the globe, ad agency specialists and media specialists are talking about the fact that traditional media will no longer continue its monopoly over media spends. In India, too, below-the-line activities such as direct marketing, in-film placements and public relations. Although TV and print still manage to get a dominant chunk of the ad pie, change will be the name of the game.

    Recently, the Heads of Marketing Survey 2003 was carried out by NOP and surveyed 100 senior marketers from a range of sectors. This survey conducted by Jaywing, a London-based communication management agency, has revealed that 40 per cent of UK-based firms were planning to increase their budgets on direct marketing campaigns using email and SMS, as well as digital television in 2003.

     

    So what do Indian experts say?

    MediaCom’s senior VP Jasmin Sohrabji says: “The whole idea is to get close to the consumer and develop a central plan or insight. We develop the plan from that central point rather than having a pre-determined fixed idea. The process of strategic media planning is not just about TV or print but involves identifying the various consumer contact points such the Internet or outdoor or other innovations.”

    “We have no qualms about telling our clients that they should use DM (direct marketing) or PR (public relations) to attain the desired results. At MediaCom, we call this “channel (different from TV channels) planning,” Sohrabji adds.

    Initiative Media president Ashish Bhasin adds: “One of the most important trends in 2002 was the increase in the proportion of below-the-line media (rural marketing, direct mail, public relations, merchandising, shopboards) vis-?-vis traditional media such as TV and print. This segment grew at a faster pace and was also responsible for growing the media pie.”

    Recently, Bhasin hit the headlines when he was handed over the responsibility of media and advertising powerhouse, the Lowe group’s integrated communications businesses (which include Lowe Personal, Linterland, Lintertainment, LinOpinion, Advent, dCell and Aaren Initiative). It is believed that the size of the DM industry is at around 10 per cent of the entire adspend of Rs 90 billion.

    WPP’s Mindshare Fulcrum MD Vikram Sakhuja says: “Securing competitive deals and managing our clients’ media investment is fundamental for MindShare and our critical volume ensures favoured customer status with powerful media owners. MindShare goes above and beyond traditional media planning and buying. We are able to redefine media and approach it from a broader perspective, by incorporating expertise from WPP Group companies together with the MindShare specialist units.”

    These are MindShare Digital; MindShare Direct; MindShare Consumer Insight; The Advanced Techniques Group; BroadMind and The WOW Factory. WPP India already has specialist divisions such as Thompson Connect, IPAN, Digital (wholly owned subsidiaries of JWT) Ogilvy PR and OgilvyOne (O&M). All these units are independent and self-sustaining units.

    Several experts feel that new media has proven itself capable of delivering double-digit response rates consistently and at a far more competitive cost. New media marketing was taking off as marketing managers faced increased pressure to get more out of small budgets. Ad guru Alyque Padamsee has gone on record saying that phenomenon of SMS is set to increase in 2003.

    This dependence could also be propelled by the general recessionary trend prevailing in India which has resulted in shrinking ad budgets. Accountability is the name of the game!

    Starcom India’s MD (West and South) Ravi Kiran says: “We are trying to convince our clients about the need to explore new ways of looking at how human beings process information and act on them; and to examine the human passions that can be leveraged by brands [At SMG, we call this Passion Group Marketing].”

    Starcom has started direct marketing divisions and its Leo Entertainment is already making waves by exploring other options such as in-film placements.

    “This aspect, by itself, is significantly changing the share of each medium in our portfolio. As an agency, we pride ourselves on being media-neutral. Our commitment to brands and customers continues to be a priority. Media is our weapon; we will use each one as we require it rather than declare loyalty to any one or two,” he adds.

     

    Looks as if the Indian media specialists are already emulating their global counterparts.

  • Asiasat reports marginal decline in turnover

    MUMBAI: Satellite operator Asia Satellite Telecommunications Holdings Limited (AsiaSat) has announced financial results for the year ending 31December 2002. It has reported a turnover of HK$951million which is a two per cent decline from the previous year.
    According to an official statement, the operational highlights included:
    – AsiaSat’s in-orbit satellites continue to operate well. Transponder utilisation rates: 36 MHz C-band at 78 per cent and overall at 64 per cent at year end, even in a highly competitive and weak market
    – The launch of AsiaSat 4 is imminent. It is anticipated to be in its final position of 122 degrees east by end of next month. It will be launched on an Atlas IIIB rocket from Cape Canaveral, Florida. The satellite successfully completed all its testing by mid-February 2003, prior to its shipment from Boeing’s manufacturing plant in Los Angeles, California, to its launch site.
    – New Tai Po Earth Station on schedule for operation in the second half of 2003.
    AsiaSat chairman Mi Zengxin, was quoted as saying: “The future for AsiaSat in the region is bright, and for this reason we will remain focused on broadcast, rather than point-to-point, communications. Set against this positive background; with an increased client base; a new Earth Station; a new satellite; and no debt, AsiaSat is poised to grow as the region recovers. It has been difficult to achieve growth in the prevailing economic climate.”
    “However, our strategy, to expand through organic growth, and growth through acquisition and partnerships, remains unchanged. The company is financially robust and is well positioned to consider and seize any opportunities that arise, and to move ahead as soon as the economy recovers,” Mi Zengxin added.
    Mi also said: “Global trends show that, despite continually falling cable prices, demand for satellite capacity used for private multi-point networks continues to rise, and we believe that this will remain the case in Asia Pacific. “
    The group continued to benefit from strong cash flow from its operations, and generated a net cash inflow of HK$270 million (2001: HK$27 million) after paying capital expenditure of HK$449 million (2001: HK$607 million). At the end of 2002, the group was debt free, states the release.
    Upon completion of AsiaSat 4, the company will have incurred a total cost of approximately HK$1,747 million (US$224 million), including the insurance premium.
    AsiaSat has stated that its proposed earth station reinforces the commitment to customers to provide the highest quality signals combined with unmatched reliability. The Earth Station will duplicate many of the circuits and facilities currently provided by the Stanley Earth Station, thereby significantly increasing the integrity of AsiaSat’s services.