Tread Water

It is nearing time for SXSW. I have expressed my profound cynicism about this institution in the past: payola, log rolling, ring smooching and the like. These things combine to exploit well-meaning kids who are seeking some kind of break, who pay there own expenses, and for the most part, rarely complain.

The sad thing to me is that this has been happening while the industy imploads, with CD sales plummeting. There have been some promising gains from digital downloads which helped a little. However, as recently reported in the LA Times, (http://www.latimes.com/entertainment/news/music/la-fi-music5jan05,1,3218473.story?ctrack=1&cset=true) "analysts remained skeptical that the industry was in a full turnaround, saying that the torrid growth in digital music sales was slowing."..." some analysts said that the 65% growth in downloads paled in comparison with the 150% rise in digital purchases a year earlier, a sign that the industry could be in for tougher times."

"Digital downloads are growing, but not at a fast enough rate to compensate for a decline in physical sales," said Richard Greenfield, a senior analyst at Pali Research in New York.

Greenfield noted in a report that if digital sales increased by less than 40% in the future, total sales in the industry might fall below even the lackluster 1% growth reported in 2006."

The record companies are struggling to make ends meet with ring-tone sales, and other gimmiktry, in a business that remains flat.

"Although some observers had expected the industry to perform better thanks to downloads, Billboard's Garrity said a lack of a sales decline was itself significant.

Making the switch to completely digital will take awhile, he said, and companies need only stay afloat.

"Tread water is the name of the game these days," he said."

What will we tell the chilren?