Musica’s download sales rise steadily
Music download sales at Musica had grown month-on-month since the offering was launched a year ago but still made up a small part of sales, said Paul Watson, the New Clicks Holdings-owned chain’s technology executive.
Watson said the legal online service was introduced to counter the threat posed by online rivals but also to take advantage of this trend. He did not give sales figures.
He said low internet connection rates in the country meant that the market was small, though he expected the customer base to grow as new-generation cellphones, capable of downloading, storing and playing songs, became more widespread.
Musica charges R9.99 a downloaded song, or R99.99 for 11 tracks, which is more or less equivalent to the number of songs on a CD. The download cost per international album is usually less than the store price of CDs, which mostly sell for between R100 and R150.
But legal US websites such as Apple Computer-owned iTunes are cheaper at 99 US cents (R6) a song, though some no longer accept South African credit cards. iTunes recently sold its billionth song.
However, other peer sharing websites such as limewire are “free”. These websites get around the law by simply allowing customers to “exchange” music with each other.
But a Durban-based information technology consultant who started illegally downloading free music in the early 1990s said poor sound quality and the time taken to download albums had seen him return to physical CD stores, unless there was a particularly rare album he was looking for.
The consultant said he had been earning very little income when he started downloading music free of charge.
“Most middle class people probably still buy a lot of their CDs, but for a teenager still living at home with his parents, downloading free music works,” the consultant said. Especially if mummy and daddy have a fast broadband service.
Watson said increased broadband sales were helping increase Musica’s download sales, though slow and expensive internet connections were still holding the offering back.
There had been a local shift in download patterns. Watson said that initially most people downloaded during office hours, with 4pm being the peak, but now there was a second peak time between 7pm and 10pm, indicating that more customers had internet connections at home than previously.
Musica is part of health and beauty group New Clicks’ entertainment division. It sells hits while the four Compact Disc Wherehouse stores are targeted at music aficionados.
The entertainment division also diversified its business in other ways “in anticipation of the slowdown of CD sales”, the New Clicks 2005 annual report stated.
It introduced DVDs, MP3 music players and computer game software into its stores.
Non-CD sales accounted for 39 percent of sales in the 2005 financial year and were expected to rise to 49 percent of sales in financial 2006.
busrep.co.za
