Despite its appeal to the popular media and recording industry, digital music distribution will not become mainstream consumer technology until it overcomes some major obstacles, say analysts.
According to a new report from Jupiter Communications, only three per cent of consumers will purchase digital music downloaded from the Internet by 2003.
But MP3 will continue to dominate the market until 2000, despite hardware and software manufacturers adding support for closed codecs (compression/decompression), which are backed by major record labels.
One of the major problems, the report found, is that consumers do not want to be tied to digital equipment to play their downloaded music, while some 38 per cent of respondents said they wanted to be able to ‘burn’ their own CDs for playback in regular stereo equipment.
In contrast less than 12 per cent identified the ability to play music on custom digital gadgets such as the Diamond Rio as a key factor in their decision to listen to digital music.
As a result, Jupiter said that, until CD technology and flash memory players penetrated the consumer market to even a minimal extent, the use of digital music would remain low.
Also although record labels have begun to take the threat of music piracy over the Internet seriously, they have yet to spell out the crucial details of their security strategies - a fact that Jupiter believes will have a direct impact on consumer acceptance.
But artists, record labels and distribution sites should take advantage of the slow adoption of digital distribution to get the technology right.
"The slow ramp up of digital distribution through 2003 provides a critical opportunity to experiment with compression technologies, security measures and rights management systems as well as online marketing tactics that take advantage of consumer music swapping rather than fight it," said the report.
Jupiter also warned companies that if they did not accept and adapt to the inherent insecurity of digital distribution they would pay the price as the technology went mainstream over the next decade.
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