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Future developments of the music industry (as expected in 1994)

Remember when digital transmission of music was a non-threatening thing for the future? The “Super Highway” was a remote idea, while MiniDisc and CD-I were the hot next thing. Read for yourself the third and the last paragraph of this summary of the part on future developments from the British 1994 report on recorded music by the Ministry of Mergers and Competition.

  • The record companies told us that the main developments likely to affect the industry in the next ten years are related to technological developments in the supply of home entertainment.
  • In the shorter term it is likely that the record industry in the UK will follow the developments that have already been taking place in countries such as Japan and the USA. The CD is becoming, and may continue to be, the principal carrier, not only for music, but also for video, games and information. The introduction of two new audio-only digital carriers-Philips’ DCC and Sony’s MiniDisc system-represents the attempts by these companies to introduce alternative digital carriers to consumers. One of these may succeed as there appears to be a requirement for a portable digital format to replace the analogue cassette.
  • The traditional core business of the record companies, the production and sale of copies of recordings, may begin to be replaced by other means of distributing music. For example, digital broadcasting by satellite or cable is currently under development. The ability to `compress’ multiple signals to be carried by fibre optic cables will mean that households will be able to receive a wide range of specialist radio and television stations, catering for a variety of musical tastes. For example, a service called Digital Cable Audio Services which can deliver more than 30 channels of digital audio transmissions of original sound recordings through the consumer’s hi-fi system is already operating in the USA and Time Warner Entertainment is developing a `Super Highway’ project in the USA where fibre optic cables carry 500 channels of digital home entertainment services.
  • Consumers may even be able to select the specific recordings they wish to hear. They may substitute listening to radio broadcasts for the purchase of records or make home recordings of broadcasts. There are implications for the flow of income to rights holders, the incidence of piracy, and the role of the retail sector.
  • New technologies are likely to allow delivery of music as part of multimedia (i.e. film, video, music, information, communication) in a physical format such as the CD or via broadcast media. There are currently in various stages of development at least 12 multimedia `platforms’, including CD-I and CD-ROM, for which music programming will be an integral part of the software offering.
  • The ownership structure of the major record companies means that links are growing between the music, entertainment, media, communications, information technology and consumer electronics industries. Apart from EMI all the large companies in the music industry are parts of international corporations with extensive interests in one or more of these sectors.
  • The record companies told us that it is extremely unlikely that in the next ten years the physical distribution of product will disappear completely, given the perceived consumer benefits associated with the packaging and tactile qualities of the object (portability, durability, and convenience). Nevertheless it seems likely that the balance between physical and non-physical distribution will change and that direct access via satellite and cable systems will assume a much greater importance.

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