Understanding the Market Behavior
How Online Download Works
- Buying digital files online through authorized sellers or resellers. Itunes and Amazon are some of those websites that offer this service.
- Ripping CDs and uploading to different file handlers for sharing. Some transfer their ripped files to other CDs and distribute. Some upload to online websites and are open to download by others.
- Peer to peer sharing. Some people are generous enough to share digital files to others whom they are related to in some way.
Why People Download
- Listening or watching before buying. There are people who like to know first if what they will buy is worth their money. When they love what they have heard or saw, they will buy it.
- Availability. Some music or movies are not available to the stores anymore and the only way is to search online and download.
- Too Expensive. Some people like students or those from small value currency countries find the prices of albums or movies too expensive. Their resort is to find a copy online or somewhere to download.
- Just want a selected songs and not the whole album. There are situations where we do not like all the songs in an album so we would buy single songs rather than the whole album such as using itunes.
- Portability of digital files. Example of this is the carrying of an Ipod with thousand songs is always better than carrying a bag of CDs that can only sum up into hundreds of song.
Understanding the Business Approach
How to Measure Record Sales
Record Sales are normally taken from counted sales based on known or big stores. This principle also applies online. It is a big popularity on artists if they top the charts on Itunes or Amazon. However, some small retailers or resellers especially those that are not directly authorized are not necessarily recognized, this means that the recorded sales are only approximations and does not determine the true profits of a certain record.
The Effects of Online Downloads
- The increasing numbers of websites offering digital music, podcast and videos does not mean a big threat to the music and movie industries. They can actually reduce both the marketing costs for the producers and the price costs for the buyers. This also opens the music and movie industries to huge numbers of potential buyersonline .
- As bigger markets are being reached, online services can also give opportunities to local or new artists to be known to wider audiences. There are many young stars discovered via uploading videos on Youtube.
- By gaining access to international music or videos, people are learning to accept several cultures and races by admiring talents from the other corner of the planet. They are also learning new sounds and way of interpretations.
- It opens higher chances to piracy. Putting files online is putting them into possible risks of copyright issues. The businesses also do not have full control of the customers in sharing the files either for free or for illegal downloads.
- Online downloads give chances to so many artists and open other talents, markets are being divided into various artists making possible decline to sales of bigger artists. However, this still depends on how the legendary artists market themselves; there are so many loyal fans out there.
- It obviously decreases sales on CD stores or retailers.
- It opens to higher number of criticisms and comments. People are exposed already to viewing different videos or listening to various sounds, they will always have comments and criticisms based on what they think should be the standards for them.