E-tailing – A review on the post ‘Digital music sales increase 50%’

E-tailing refers to the primary use of Internet as the platform for consumers to shop for goods and services and it can be classified into pure plays and bricks and clicks. Specifically, pure plays retailing involves Internet as the sole medium for transactions and other commercial activities, for examples, Dell and Amazon; whereas brick and clicks, while using Internet to facilitate businesses, still incorporate the traditional use of physical store for goods display.

One of the major examples that depict how e-tailing has transformed consumers’ purchasing method involves the sales of digital music. According to the current trend, digital music is gradually and inevitably replacing the traditional physical album as a mean for consumer to purchase song tracks. For instance, in the first half of year 2007, the sales of digital tracks surged 49% up to USD$ 417.3 million while sales of physical albums have suffered a plunge of 15%. The rise of online music stores such as iTunes and Amazon is expected to further increase the popularity of digital music and on April 3 2008, iTunes store has surpassed Wal-Mart as the largest music retailer in the US, marking an unprecedented record in history that online music has outperformed the physical music format

Apple iPod

In order to further expand the online music market, companies such as Amazon and Apple has initiatedcollaboration with music records such as EMI to sell songs that come without copyright protection (DRM-free) and such moves have enabled consumers to transfer their purchased songs to any computers and music playing devices as well as burn their own CDs freely.

Digital rights management (DRM) is an access control technology which works to ensure compliance with intellectual property in respect of digital content. For example, Fairplay is a DRM technology created by Apple Inc to digitally encrypt audio files to prevent them from being played on unauthorized computers/devices as those files are only playable using QuickTime multimedia software. If you’re interested to know more about how the technology works, here is a useful link. Currently, the collection of DRM-free songs is still relatively limited as major music labels such as Universal Music, Sony BMG, and Warner Music have not advocated to selling unprotected music. This is one of the disadvantages of online music which limit consumers’ option to only a certain playing device.

As online music continues to grow, consumers need to be constantly aware of protecting intellectual property and are widely encouraged not to share and download uncopyrighted music. Just a couple of weeks back, a woman in the US has been ordered by the court to pay a bizarre amount fine totaling USD$ 2.92 million for willfully infringe music copyrights by sharing 24 files on Kazza. To read more about the story, click here.
Here are links to some of the pioneer online music stores:
http://www.apple.com/itunes/whatson/
http://www.amazon.com/MP3-Music-Download/b?ie=UTF8&node=163856011
http://free.napster.com/