Comments on: Spotifies May Steal Customers From Pandoras, With Facebook's Help http://paidcontent.org/2011/11/09/419-spotifies-may-steal-customers-from-pandoras-with-facebooks-help/ The economics of digital content Fri, 24 May 2013 18:12:22 +0000 hourly 1 http://wordpress.com/ By: Fares http://paidcontent.org/2011/11/09/419-spotifies-may-steal-customers-from-pandoras-with-facebooks-help/#comment-86083 Thu, 17 Nov 2011 22:20:37 +0000 http://paidcontent.wp.gostage.it/2011/11/09/419-spotifies-may-steal-customers-from-pandoras-with-facebooks-help/#comment-86083 Mr. Silverman, if you ready the Gartner press release, I think it’ll clear things up for you. Everything you mention is addressed in the original press release, not on this article…

http://www.gartner.com/it/page.jsp?id=1842614

]]> By: Tom Silverman http://paidcontent.org/2011/11/09/419-spotifies-may-steal-customers-from-pandoras-with-facebooks-help/#comment-86082 Thu, 10 Nov 2011 12:19:52 +0000 http://paidcontent.wp.gostage.it/2011/11/09/419-spotifies-may-steal-customers-from-pandoras-with-facebooks-help/#comment-86082 This is probably the most obviously wrong prediction I have ever see. 1. Digital downloads have not flatlined in the states, albums are up 20% and singles are up 11%. Huge growth. 2. A la carte downloads will never be big in emerging economies that have no history of real music purchasing. These markets will become access markets with phones being the main point of music consumption and “feels like free” imbedded “subscriptions” built into service providers offerings. These services will include tethered subscription downloads and streaming music and eventually video. 3.Facebook has added new sign ups but look at the ratio of MAU to DAU.  Actual use is a fraction of sign ups. Spotify will continue to grow but at the expense of illegal downloading and other “active” services.  Pandora and other “radio alternatives” will continue to grow at the expense of traditional radio and grow with the growth in smart phones, 4G and in-car connectedness. 4. These stated growth percentages are based on a numerator/denominator equation where the denominator is so small that a small absolute increase in numerator yields a huge percentage change.  Pandora has a huge denominator as does iTunes single sales.  Even a small percentage increase in these numbers  yields a very large absolute increase. 5. CD sales will continue to fall at 3% to 9% a year and will likely lose a third of their volume over the next 6 years as this “guess” predicts.  But they are not “over” as many pundits predicted only a few years ago. U.S. physical CDs are down only 7% this year after the closing of Border stores. Other countries are down even less.

Watch for more data misinterpretation and misrepresentation over the next few years.

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