Brick-and-mortar record retailers, which are suffering a decline in sales because of music piracy and illegal online peer-to-peer (P2P) file-sharing services, face unclear prospects because digital music will inevitably become the standard in the music industry in the future, industry insiders said yesterday.
"Music piracy and the emergence of online P2P file-sharing services since 1999 have affected the nation's record retailers, producing an average decline of 20 percent in annual sales," said Enid Chen (陳盈蓁), public relations specialist at G-Music Co Ltd (惟音).
G-Music, a subsidiary of GigaMedia Ltd (和信超媒體), in 2002 acquired Rose Records (玫瑰唱片) and Ta-Chong Records (大眾唱片), two of the nation's dominant record retailers, with 53 outlets nationwide. GigaMedia is a broadband media company that decided to expand into the brick-and-mortar end of the business in order to avoid having too much exposure in any one segment of the industry.
Sales at Rose Records and Ta-Chong totalled over NT$3 billion last year, accounting for over 50 percent of the nation's music retailing, Chen said.
Chen refused to reveal sales figures at these two chains for 2003, but she said that digital forms will become the standard in the music industry in the future.
"We are considering offering music-downloading services in the future as well," she said.
The demand for digital distribution has caused iBIZ Entertainment Technology Corp (艾比茲娛樂科技), an online music distributor under Era Communications Co (年代網際), to consider launching a music download site in March in cooperation with 14 record labels.
“Digital music may become the industry mainstream within the next four
years,” iBIZ president Steven Yang (楊國雄) said.
Yang said he's upbeat on the business as more than one-third of Internet users in Taiwan have ever downloaded music from online-sharing Web sites.
The company has invested up to NT$150 million, including NT$100-million annual copyright fees.
“The audio and video discs, which would become fan’s collections, would not be entirely replaced by digital music,” said Yang. “Record companies and online music downloading service operators can enjoy mutual prosperity
via provision of copyright songs.”
In the US, Tower Records also suffered the growing popularitity in online music-sharing and is likely to file for bankruptcy in the next few weeks, the AP reported last week.
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