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18 MusicWeek 18.05.12 FEATUREFORMAT SHIFTING


THE TRUE WORTH OF MUSIC U


FORMATS  BY JO DIPPLE, CHIEF EXECUTIVE, UK MUSIC


K Music has conducted research with Oliver & Ohlbaum Ltd to pinpoint, for


the first time, the explicit market value of the ability to copy music from CDs onto portable devices. According to Ofcom, 91% of the


UK adult population now owns or uses a mobile phone. Two-thirds of the UK adult population owns an


MP3 player. The desire to purchase and own a device is in


part due to consumers knowing they have the ability to copy music from their CDs onto that device. The desire to listen to music in leisure and on the move drives device sales. We know music fans are using new technology


to access and play their CDs. We also know that technology companies are


selling more unit products and associated services to that customer, because of the value the consumer places on having a facility to listen to music copied from a CD. In January 2001 Apple produced computers with


no CD-burning drives. They posted a loss of $247m in Q1 of that year. Apple had “completely missed the boat” as Steve Jobs commented. Had Apple continued to misjudge the consumer’s relationship with music and technology, I doubt I’d be writing about them here. However, Steve Jobs did understand the


relationship between music and technology. He introduced a new range of computers, all with CD- RW drives. He promoted his business with the ‘Rip. Mix. Burn’ advertising campaign. And most significantly, he unveiled the iPod in October 2001. It is clear that the substantial value consumers


placed on copying CDs onto devices, and listening to music on those devices, drove Apple’s business fortunes. Steve Jobs was a genius to grasp the basic need for technology to satisfy an intense consumer craving for listening to music. The value, isolated and measured by UK Music’s


O&O Research, is fundamental to businesses such as Apple. We all know that consumers love music. They want


to be able to listen on the devices they carry around with them, be that a mobile phone, an MP3 player or a tablet. Surely this isn’t groundbreaking news? But what is groundbreaking is that the research


expresses the value of music copied from CDs as a commercial commodity. The O&O analysts isolated the feature “playing


music copied from CD” as a characteristic of popular consumer devices such as MP3 players, smartphones, and tablets. After extensive consumer testing, the analysis was able to determine the commercial value of “playing music copied from CD” as a proportion of those devices. We publish this data today on www.ukmusic.org and highlight some of the key findings here.


SOURCE Graphics and research: Oliver & Ohlbaum Associates


Music copied from CD remains a key source of digital music libraries. Over three quarters of respondents ‘rip’ between “20% and all” of their digital music library from CDs. More than a quarter of respondents ‘rip’ most, or all, of their digital music library in this way (see Fig.A below).


B. THE COMMERCIAL MARKET-BASED VALUE ASCRIBED TO CD COPYING REMAINS CONSIDERABLE


As can be seen (Fig.B below), consumers today attribute 44% of the price of a basic MP3 player (eg an iPod Shuffle) directly to the ability to play music copied from CDs; 53% of a mid-range MP3 player (eg an iPod nano); and 32% of a top end MP3 player (eg iPod Touch). In monetary terms, this means that today’s consumers attribute £21.00 of the price of a basic MP3 player, £65.17 of the price of a mid-range MP3 player, and £80 of the price a top end player – directly to the ability to play music copied from CDs.


FIG.A


BELOW Rip it up: UK Music research shows consumers pay £80 of the price of a top- end MP3 player in order to play music copied from CDs


New research from UK Music shows the value consumers place on copying CDs to portable devices A. CD RIPPING IS STILL A PREVALENT ACTIVITY


www.musicweek.com


FIG.B


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