Cassettes retard digital music market

The uptake of digital music downloads in SA is still minimal as the market is retarded by a reliance on CDs and cassettes.

This is despite the fact that digital markets are being seen as the next frontier for the struggling music industry, both domestically and internationally.

David du Plessis, operations director of the Recording Industry of SA (Risa), says the local music market has not yet shifted significantly to digital music sales, as more than two million people still rely on cassettes when buying music.

"In the billion-rand music sales industry in SA, the physical market is still the biggest," says Du Plessis. "If you look at cassettes, for example: to some it is shocking that we still sell them!"

In 2007, R33.8 million worth of cassettes were sold, with an additional R800 000 in cassette single sales. This means cassette sales far outstripped that of CD singles, which only raised R5.7 million.

CDs make up the bulk of the local music market, bringing in R829 million. DVDs raised R150 million in revenue, in 2007, with the total music market for the country coming in at R1.02 billion.

SA's music market showed marginal growth in 2007, in contrast to what is happening on the global front, with most record companies facing a serious decline in growth rates.

According to Du Plessis, Risa does not yet measure digital sales as such, as much of it is done through individual companies that sign commercial agreements with the likes of Musica and Vodacom to sell single tracks or music ringtones.

However, he estimates the digital music market in SA to be worth about R60 million at this stage.

The domestic digital music market doubled from 2006 to 2007, indicating good growth in Du Plessis' opinion, but not yet enough to detract from the physical market.

"Digital music downloads are definitely where the future lies, but we are not yet there," he says. "At this stage, we still see cassettes being popular."

According to Du Plessis, "digital music downloads are still very small in terms of the overall physical music market. We have very diverse markets in SA - we are still in the phase where people are moving over to DVD."

Du Plessis also quotes the limited availability and high cost of bandwidth as inhibiting factors in the uptake of digital music formats - "once this is addressed we might see more music downloads".

Upon releasing Risa's figures for 2007, the body's chairman, Ivor Haarburger, agreed that, while digital music is still working off a limited base, it is the way the industry will have to develop in order to survive.

"We are becoming increasingly dependent on opening up new revenue streams to sustain business," said Haarburger. "This includes digital incomes, especially in the mobile sector."

He noted that campaigns that motivate consumers to pay for their music downloads are one of the challenges that would have to be embraced as a matter of urgency.

Du Plessis explains that, at this stage of the local music industry's development, digital piracy is still a headache for record companies.

Here he points to the role Internet service providers (ISPs) play in facilitating pirate acts.

"When it comes to pornography, for example, they are very quick to step in, but, somehow, when it's intellectual property and copyrights at stake, they have this convenient attitude of saying they are only the medium through which it happens."

He says there are, however, initiatives being launched on a global level to set up guidelines, in partnership with ISPs, for such activities as downloading music over the Internet.

"There is a lot of money to be made online," notes Du Plessis. "We want to give people the opportunity to access music the way they want to, so we are looking for legal ways to get our product to market."