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Unchained melody
Will the Internet kill the music industry? At least 60 percent of the cost of today's CDs can be stripped away when the same music is downloaded from the Internet. Yet the biggest fear of record labels and artists alike—the wholesale piracy of music—is probably overblown, given the practical and technical limitations on downloading files. Many companies that adapt to the new technology, perhaps by attracting paid subscriptions for on-line access to music, stand to gain from it.
The take-away: A new model of music distribution—a subscription-based "jukebox in the sky" that delivers an unlimited choice of music—could double the size of the industry, to $80 billion a year, potentially giving incumbents a piece of a much larger pie.
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© 1992-2003 McKinsey & Company, Inc
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