Web Music Surging
I find pleasure in downloading music to my PC and portable digital music player. In fact, I cannot remember the final time I was at a music store. I am a convert. I prefer listening to music samples on the Internet and buying only the songs that I want and not wanting to buy an entire disc where I can prefer only a few song tracks. This is the reason why iPods from Apple PC Inc. (AAPL) have grown exponentially in popularity to the current cult status. A friend of mine received a 30GB iPod for Christmas and trust me you have never seen a person so excited.
A 30GB iPod can hold up to 7,500 CD quality songs. That is impressive. Apple is a trendsetter in my estimation. From its MAC to the iPod, Chief Executive Officer Steve Jobs has a keen knack for trends. The portable music devices have so much memory because he might expects a massive shift to CD burning and downloadable music. Apple’s iTunes Music Store is booming.
Just last week, the International Federation of the Phonographic Industry released its research into the digital music business and the solutions weren’t a surprise. Just like how Web DVD movies have dominated the video rental market, dominated by Netflix Inc. (NFLX), and pushing incumbent Blockbuster Inc. (BBI) to the sidelines, the exponential growth of the Web music business has been on an explosive upward path.
According to the research, sales of digital music globally stimulated by over 300 percent in 2005 to $1.1 billion. The research said digital music accounts for about 6 percent of total music sales, up from uncommonly little two years back.
The competition in the industry is fierce and expected to ramp up going forward. This can guide to consolidation in the industry down the road and result in lower prices. we can see the bigger and more established players taking out the smaller up and comers.
Besides Apple, there are a slew of Online music website s. Probably the the majority well known is Napster Inc. (NAPS). Napster reported it has over 500,000 subscribers but has yet to turn a profit and is not expected for the time being. But the company has minimal debt and a whopping $128 million or $2.91 per share in cash. Given that the current share price is 3.08, this implies you are paying a mere $0.17 for the company’s asset and potential. This is pretty wonderful and enticing for speculators, but then Napster must deliver profits. Napster could be the dark horse in the digital music business.