Head of BMG Predicts an End to CDs

By Sushuma February 6, 2000 2:29 PM

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(Variety)-While Hollywood worries that the Internet may shrink its coffers, Bertelsmann Music Group prexy and CEO Strauss Zelnick told a high-tech summit Thursday that the digital downloading of music and films will only expand the markets for entertainment content.??Digital downloading is the holy grail,? Zelnick said during his keynote address at the Variety Interactive Summit.??The explosion of consumer interest from digital downloads will be the best thing that ever happened to retailers.?Security is important, but it?s not the be-all and end-all.? Pay TV and VCRs were once feared as major threats to the television networks and movie studios, and now the same fears have sprung up regarding the Internet, he observed.??The VCR ended up creating new enthusiasm for the film market as a whole,? Zelnick noted.?The Internet ?will do the same for the music business.?More customers are good for us.?This is real.?It?s not going away.? He added, however that piracy is a problem that ?can?t be defeated by copy protection.?CDs still aren?t copy protected.? Zelnick promised that BMG will focus on heavier promotion of its music artists, e-commerce offerings and digital downloads online.?Among Zelnick?s forecasts for the future of the music biz: CDs are obsolete and will be replaced by computer chip-based devices that store music but still enable consumers to carry them around.?Estimated market penetration: two to three years; There will not be one Internet music downloading and storage standard; The consolidation of the music business will continue due to cost-savings considerations and maturation of the CD business; Traditional media giants with cash flow and strong revenues will win out among the Internet players.?Read more ...

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