The BANG Theory

We’re not first to the party in reporting this, but…the RIAA released 2007 numbers last week (yep, last week - four months after year-end) and a few highlights include:

• CD shipments (net) dropped 17.5% while the dollar value of those shipments dropped 20.5%.
• The LP/EP category (vinyl records) saw shipments increase 36.6% with a 46.2% increase in dollar value.
• Cassette shipments (net) dropped 41.2% with, oddly, only a 18.4% drop in dollar value.
• Kiosk downloads increased 28.5% by units and 38.1% by dollar value.
• Subscriptions to music services (using a weighted annual average) increased a mere 0.7% while their dollar value dropped 2.6%.
• Mobile increased 14.6% by units and by 13.6% by dollar value. Mobile includes master ringtones, ringbacks, music videos, full track downloads and “other mobile.”

Not in the report was the fact that people continue to listen to music and LOTS of it. Also not in the report was “holy sh*t, this ship is sinking faster than we thought”…though that would have been a perfectly appropriate summary. Music still fills the streets, music still fills our headphones and music fanatics are growing in numbers not declining….Musicians continue to turn out new music and amazing stuff at that and they deserve to make money from their efforts.

So, it’s just the distribution that has changed and the RIAA just won’t accept or embrace that.

Apparently, there are more and more people each day recognizing that you have to be smarter in your online ad strategies…frankly, this seems so obvious but people get paid a lot of money for stating the obvious…a Lehman Research report stated:

An independently-commissioned report, written by Lehman Brothers Senior Research Analyst Douglas Anmuth, views vertical ad networks as “a natural evolution driven by the fragmentation of the Internet”. The change, according to Anmuth, is being motivated by growing advertiser demand for specific audiences rather than mass reach. Because advertisers are willing to pay a premium to reach these specific audiences, Anmuth predicts that vertical ad networks “are well positioned to take a larger share of the online advertising market.”

Seems obvious but whereas the technology business can move at a break neck pace sometimes it’s not to say that there aren’t old dogs that need to learn new tricks.

There has been a lot of play lately about the data from emarketer about the size of the widget ad market:

So far, widgets and applications are garnering far more attention than actual ad dollars. Although consumers are increasingly using them, eMarketer estimates that US companies will spend only $40 million in 2008 to create, promote and distribute widgets, up from $15 million in 2007.

Sounds like nothing but that’s missing the point. Advertisers are clamoring for widget advertising but don’t know what to do with them. Widgets are viral…by their very nature…but companies are figuring out how to advertise on them and not screw up the scenery. And, site publishers see them as an opportunity to make some coin for their content but haven’t yet found a lot that is interesting. For those of you that haven’t read Gladwell’s The Tipping Point, it’s my take that you’ll soon see a real life case study open up before your eyes.