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Media Research Exec Says Music Industry Is On Its Last Legs
Posted by
Zonk
on Fri Nov 30, 2007 11:25 AM
from the internet-killed-the-video-star dept.
from the internet-killed-the-video-star dept.
Ponca City, We Love You writes "For years, the major record labels have fought a pitched battle against the MP3 format. Although major labels like EMI and the Universal Music Group have embraced MP3s in recent months, a story from the Mercury News says early returns from those moves indicate they've had little impact on the industry's fortunes — for better or for worse. 'These are ailing businesses on their last legs,' said Eric Garland, chief executive of BigChampagne, a market research company focused on digital media. The question of copy protection on song downloads 'matters a whole lot less to them than it once did.' The industry has a bigger problem. Consumers used to buy CDs for $10 or $15 a pop. Increasingly, they're buying songs at about $1 apiece instead. So, even if transactions continue to increase, the industry is seeing far less money each time consumers buy and it's having a difficult time making up the difference."
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So long Music Industry... (Score:5, Funny)
Re:So long Music Industry... (Score:5, Insightful)
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Re:So long Music Industry... (Score:5, Insightful)
Don't be so sure. When a band can distribute its albums by posting a zip file on a web site, there's a lot less incentive to turn to labels. The industry exists right now because it exists - not because it's necessary. As people start to see how the economics of giant media labels work against them, the tide can turn.
Entire industries (as we think of them) don't disappear overnight, but they do sometimes disappear, or change into something so different you couldn't really call it the same industry with a straight face. That's where we are. They're a dying breed, whether they know it or not.
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Re:So long Music Industry... (Score:5, Interesting)
- To put up the cash for recording.
- To package, promote, and distribute the end product.
With inexpensive, accessible recording software, artists can create a quality product much, much cheaper than they could in the past. Plus, with the Internet, there is really no compelling reason for physical media anymore. Music can be promoted and sold virally, with nearly 100% of the proceeds going directly into the artist's pocket. Compare this with the paltry 2-5% artists would get through the traditional sales model!The Record Labels' days are numbered. Their sales model is outdated, inefficient, generally produces an inferior product, and siphons cash away from the artists themselves. They are now nothing more than an expensive middle-man.
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One more reason (Score:5, Insightful)
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Re:One more reason (Score:5, Interesting)
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Just like the VCR killed Hollywood. (Score:5, Interesting)
The movie folks fought like heck to kill the VCR. And in the end, not only did home video not kill the movie biz, it likely saved it. Try to image a movie industry that only makes money from theatre showings and the occasional soundtrack. Now it's not tapes but discs, but we have the movie, the director's cut, the remaster, the collectors box set. I doubt Disney pumps out all those direct-to-video sequels because home video is killing their business model.
Likewise, when the music industry folks finally get their heads out of their butts, they'll realize direct digital distribution is not a threat, but rather the savior.
I don't know why they haven't jumped on board years ago. You mean we get to sell music without the overhead of a physical plant to produce discs/tapes/whatever, without a transportation infrastructure to deliver the product to retailers, without having to share the profit with stores? What's the catch?
Yes, making quality copies is easier for the consumer than taping off the radio or making a dub from a friend. But 1) that fact doesn't negate any of the positives of the above paragraph. And 2) playing luddite and ignoring all the positives of the above paragraph doesn't prevent any of the issues of unlicensed digital copies.
So as it is now, the RIAA folks get all the negatives (from their point of view) of the internet and digital music, while refusing to partake in any of the positives.
One day they will wake up, just like the movie folks did. When that happens, not only will the digital revolution not kill the music industry, it will save it.
To the folks who say the music industry will go away because bands don't need it, I disagree. Not everyone has the resources to build/rent a studio and make masters. And throwing up your mp3s on the band web site is trivial when you're a local hit and expecting a couple thousand downloads; it's not quite the same when you're hoping for millions of downloads. Putting together a tour of college town bars with an old VW van is not quite the same as organizing an international tour of stadiums.
Yes, the current business model is something akin to the record companies are property owners and artists are overworked dirt get combed by share croppers. Yes, I hope direct community built between bands and fans through the web will give artists move leverage. But I doubt music companies as we know them will disappear any more than the web and digital distribution has freed authors and killed off the publishing houses.
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Re:Just like the VCR killed Hollywood. (Score:5, Interesting)
A lot of hard work is required sure but it's not as money intensive as you think. My younger brother was in a local band for a while, he's not any more but he's still friends with the former members and during that time they got an album recorded... it cost a few hundred bucks and the quality is just as good as any major label CD you'd buy in the store (arguably better than some). Having a few hundred discs pressed and packaged complete with artwork was a few hundred more... Essentially they got an physical product they could sell at shows for less than the cost of a new gaming rig.
As for touring/getting noticed etc. while my brothers band broke up one of the guys started a new band and decided to just tour and promote their website instead of selling physical CDs, booking shows the next city over a few weeks in advance and moving around the country that way. By the end of the tour they had a record deal with an indy label and are making quite a bit from iTunes download alone, enough that they all bought BMWs and have an actual tour bus and roadies.
My brother is in school now for video production. he has another friend who writes his own music, he saved and spent a couple grand on his own recording equipment, plays local shows and sells his music online, my brother produced a music video for him using his own camera (Cannon GL2) and put it on YouTube. It became the #3 most watched video the week it was put up and now his friend is making enough from his online sales that he was able to quit his day job and concentrate on his music full time.
My Uncle is a local Jazz musician, is digitally distributed and has pressed several cds which he sells through his website, and the indy label also distributes to record stores in this region of the US. He also works part time as a music instructor.
NONE of these people are superstars... but, they're all making a living in the music industry outside of the RIAA and without the "resources" of a major label... Not everyone in the music industry wants or needs to be a multimillionaire superstar... some are quite content to do what they love and make enough money doing it to live comfortably.
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Re:So long Music Industry... (Score:5, Insightful)
Kind of missing the point, no?
Think about a music industry where artists don't need labels to get "beer, coke and groupies." Imagine an industry where new channels make it easier for unknown artists to get noticed. It's hard to get noticed right now because you almost can't do it at all without going through labels. Right now, labels are necessary because the system has been architected such that you can't go it without them. That is what stands to change.
So far as online delivery goes, I think you're flat-out wrong. iTunes accounts for more than 2% of music sales on its own, and in an increasingly "green-friendly" world the concept of digital distribution, which requires no printing presses, no petroleum-based products, etc., is the way forward. That's why I laugh a little every time I think about the BD vs HD-DVD argument. In a few years when DOCSIS 3 is ubiquitous, and fiber is available to many homes, the idea of having to go buy a little round piece of plastic looks increasingly stupid.
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Re:So long Music Industry... (Score:5, Insightful)
Right... because iPod and iTunes sales are only to techies. While I agree that not everybody is ready to give up on CDs, iTunes and P2P have made significant inroads into the way that people get their music. Downloading music is definitely not just for techies.
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Re:So long Music Industry... (Score:5, Interesting)
Does the industry really need billboards in every city? I'm talking about a grassroots, fundamental reformulating of the industry as a whole. It makes no sense that a shitty, commercially-architected pop group can gross $10m on a single album while truly talented artists can't even get off the ground. We need to go back to square one, focus on the music, and let the industry reinvent itself from there. The music, and the artist(s) that produce it.
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Re:So long Music Industry... (Score:5, Insightful)
I see statements like that all the time, and I just shake my head in disbelief. The reason that comercially-architected pop groups succeed is simple - more people like them and are willing to pay for their music than that of the "truly talented artists". Deal with it.
We see this all the time, in different areas. Windows outsells Mac OS, and both are more widely used than Linux. More people watched "Transformers" than will ever see "No Country for Old Men", regardless of how many film critics rave about it. More people will read Harry Potter books than will read "War and Peace", despite English Lit being a required course in most (U.S.) schools.
You can't force people to like something against their will, and ridiculing their taste will just piss them off.
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Re:So long Music Industry... (Score:5, Interesting)
If a film or television director hears your song and wants it, he's going to get it. The real problem is that very few big movies are directed by people that wanna get new, edgy, or slightly-less-than-commercial music from untried acts. The call to the music supervisor is generally "Get me something that's by a hot band to put over the snowboarding scene," the actual band, performer, or subject is really secondary to the commercial aspect. Only occasionally do you hear "Get me band x's song y".
I agree, but this reform had better happen soon if people distributing on the Internet want ay protection at all.
Eh, I'm not alone. I guess we'll just have to see, but for just tracks of audio, you're right. It's left to see if the recording industry won't start offering more value for the physical media than they do now, like lyrics embedded as a standard, easier ripping, videos, promo materials... huh, you're right, it's dead.
Well, you can't make musician A disappear from the Earth by heavily promoting musician B. Again the real problem is that people don't always have strong feelings about particular songs or artists, but just wanna hear music, any music, maybe restricted to a genre but that's it.
And, well, guess what, if you want 100 million people to hear the hook to your song or even read the name of your band, that's going to cost you millions of dollars in media buys, sorry. The average music listener doesn't spend an hour a day on band home pages looking for good music. There's this whole line of work called "A&R" with professionals to do that for them. You may not like what they come up with, so you're welcome to start your own music website, too.
In flux, yes, but a big fact remains that if you create music that only exists as a recording, i.e. you don't have a live act, it's going to be very difficult for you to make a living doing your art. The thing left unstated in these debates oftentimes is that the people advocating more freedom really don't care if they only do their music as a hobby. I myself am certain quality would suffer under such a regime, but again this remains to be seen.
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Re:So long Music Industry... (Score:4, Insightful)
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Re:So long Music Industry... (Score:4, Interesting)
Oh yeah, while you're at it *KNOCK OFF THE F'ing LOUDNESS AND COMPRESSION* [wikipedia.org].
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Re:So long Music Industry... (Score:5, Insightful)
There would be some implosions in the current model that would on the surface appear to negatively impact the artist and consumer. While the artist would spend more promoting on their own, distributing on their own, recording on their own, they would likely be letting go of a static percentage similar or likely less than they do now to industry giants.
The state of DRM would change, as there would be no more litigation funded by record companies (leaving the MPAA to twist in the wind without a partner in crime) and less funding toward P2P obfuscating and software rootkit technologies. The online download would become the primary medium of the industry, and while I agree there is a need for some copy protection, to prevent widespread distribution, without a monolithic industry behind it, less invasive alternatives may finally see the light of day.
Personally, I wouldn't say I've been actively boycotting Big Music, but I guess you could say I have been, subconsciously. I haven't bought a CD in probably 10 years. I do support larger artists through iTunes and Amazon's DRM-free initiative. I also spend WAY more time and money on local/touring artists on a face-to-face level. Local artists, I buy tickets to shows, help promote (street team style), buy merchandise when it moves me, and basically just stay active in the scene, cross genre whenever possible. Touring artists, I will buy a ticket to a show, avoiding Ticketmaster at all costs, buying their CDs and merch in person, where they generally get a larger cut of the sales.
I'm all for the collapse of the industry. It appears to be the only means of innovation, and it will right a lot of wrongs currently out there. Unfortunately, the best way to do this still seems to be choking their sales as much as possible, usually by illegal downloads and bootlegs. I hate to see the artists suffer, but it is definitely causing a positive effect, as more and more artists are breaking away from Big Music to go it alone. Sometimes the best way to change a law is to break it. We shall see.
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Re:So long Music Industry... (Score:4, Interesting)
I think not. There are a few studios here in Springfield (with a population of only 110,000), but none of the bands who record for the majors are using them. Instead it's the major labels' biggest threat who are using them - talented locals who play in bars.
MP3 is killing the RIAA labels because that's mostly the format the local guys post their songs on the internet in. And those MP3s are selling CDs. Every two indie CDs sold is an RIAA CD that isn't.
I have quite a few musician friends here, and not a single one of them would sign a contract with the majors and give up copyright to their own music, only to have "creative accounting" eat up any of the tiny royalties they would get.
The king is dead. Long live the king!
-mcgrew [kuro5hin.org]
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Re:So long Music Industry... (Score:5, Insightful)
The point I'm driving at is that the high-end studios that attract all the (current) A-list clients also drive the technological innovation for studio equipment. Mics. Mixers. Sound isolation. Software. Media (as in DAT, etc.). While that innovation wouldn't go away, it wouldn't see the same level of development that these studios enable through Creating A Need, and early adoption of new technologies (because they can afford the latest and greatest).
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Re:So long Music Industry... (Score:4, Interesting)
There is always innovation to be had in music recording. I'm sure that when reel to reel recording first came about, someone like you thought that was all there was to it. Then came multitrack recording. Then came digital recording. Then came computerized recording, all done straight to a hard drive. The manufacturers of studio equipment are constantly coming up with awesome stuff and amazing new technology in every new iteration of their product. Automated faders (try to imagine what it would be like to try and mix 128 individual tracks at the same time by hand) used to be obscenely expensive, but are now industry standard, thanks to early adopters who brought the technology to a point where it could be mass produced. I don;t know what is going to be next, but I can tell you there is PLENTY of room for innovation. Better mics. New kinds of interfaces, ways around historically complex processes (analog patching is a giant pain in the ass). Plenty of stuff.
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Re:So long Music Industry... (Score:4, Insightful)
Whenever people talk about the "collapse" of the record industry, I always want to ask, "Do you honestly think people will stop making music?"
I wouldn't be surprised if things changed, but things are constantly changing. Ultimately though, people won't stop writing music, playing music, or performing music. The tendency of the human race to make music didn't start with the record industry, and in fact didn't start with musicians being able to get rich off of their talent. The fact is, Homo sapiens are a musical species. You'd have a hard time getting us to stop making music if you tried. If all the governments of the world made music illegal, people would still do it.
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Recruit Better Talent (Score:4, Interesting)
Re:Recruit Better Talent (Score:4, Funny)
-Rick
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Re:Recruit Better Talent (Score:5, Informative)
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Re:Recruit Better Talent (Score:4, Interesting)
I look at older stuff; Don Henley, The Eagles, Chicago, Billy Joel, earlier Metallica, etc, etc, when in any given decade from between the 60s and 90s where I can easily find multiple artists with multiple CDs fitting that criteria.
The problem isn't the new formats; the problem is the quality of the groups that are out now.
A good set of experiments to verify this
Survey people with 1-5 albums that have come out each year from 10 years before the person was born, until he/she turnes 50 (obviously younger people won't have as many). Say the top 5 albums, and 5 random albums
List the albums and the tracks. Have the individuals pick which songs (assuming they weren't available) the users would pay $1 to download.
Correlate data to two charts
(1) %of songs people would buy vs. year
(2) %of songs people would buy vs. year relative to birth
That would be an interesting experiment, you could use data from chart 2 to help normalize the "it was popular when I was younger and more influential" bias.
Anyone know if anything like this has been done?
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Re:Recruit Better Talent (Score:4, Insightful)
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And here is me... (Score:5, Funny)
Re:And here is me... (Score:4, Funny)
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Re:And here is me... (Score:5, Funny)
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death of the industry or of the album? (Score:5, Insightful)
Re:death of the industry or of the album? (Score:5, Funny)
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Re:death of the industry or of the album? (Score:5, Funny)
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Re:death of the industry or of the album? (Score:5, Funny)
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Re: (Score:3)
Re:death of the industry or of the album? (Score:5, Insightful)
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Apropos quote in the article (Score:4, Insightful)
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What a clever way to show how propietary content and artificial constraints on access can spell doom! I bet more than half the comments in this thread will be about the idiocy of putting a registration-required article in the summary.
As for the actual topic at hand, if the music industry goes away, who will provide music? Once the vacuum is created, it will be filled by someone else. Music isn't like buggy whips. Maybe it's like bottled water, though. You used to get it in those plastic gallon bottles, but nowadays you mostly get it either from large 5 gallon jugs or 500ml bottles. Content stays the same, packaging and marketing changes.
What's the bottom line? The evolution of the music industry will lead to dumber and more expensive product of something that is essentially free otherwise.
Oh noes! (Score:5, Insightful)
Re:Oh noes! (Score:4, Insightful)
I'm sure they're sitting in board rooms right now, wondering if they can get away with pricing the one hit at $12, and the remaining tracks at $0.99 each...
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I'm calling BS on this (Score:5, Interesting)
Bah (Score:5, Interesting)
$.75 - Label
$.20 - Apple
$.05 - Artist
If the middleman (who provides neither the content nor the bandwidth, and takes 3/4 of the money) can't make a profit here then I think perhaps they're doing something wrong.
Not dead just BOGOF (Score:3, Insightful)
Chirping away about "Used to be $10 for a CD now its $1 for a track" is just plain silly as saying its the end of the industry. What it means is that the distribution cost has now been practically eliminated so all that is pretty much left for the companies is the profitable bit, remember the creation and shipping of a CD (although cheap) is a business cost.
The industry has big big issues, but that has nothing to do with albums v mixed basket and everything to do with actively preventing people buying music in a mixed basket approach.
Hitting reality like a brick wall (Score:5, Insightful)
You built a wall around yourself and ignored the real problem. Your own costs are too high, you rely more on the popularity of an artist/band rather than the true talent he/she/they possess, and you chose to ignore new technology in how it could bring you new opportunities. Think fast or die slow.
Indie music (and albums) (Score:4, Interesting)
With micropayments and the ease of putting content online, it's hard to see what value EMI, Columbia, and their ilk bring to the table. Most of the music that I enjoy can be found on sites like emusic.com -- and no matter what sort of music you prefer, the artists would be able to record and produce it without much more effort than it takes to perform it. Let's cut out the inefficient middleman and buy directly from the musicians!
On the topic of albums, they may be declining, but there is definitely something to be said for a well-imagined and well-executed album. IMHO an excellent example is ELO's "Time" album; the songs flow into one another, creating a continuous artistic work, rather than a collection of haphazardly-assembled songs. "Down to the moon" by Andreas Vollenweider is another example.
I woudn't say the industry is in trouble (Score:3, Insightful)
Who wants a standard CD? (Score:5, Interesting)
What I miss is the *packaging* of the LP. They were big and afforded great album art, along with all kinds of neat extras (like the spinning wheel on Led Zeppelin III, or the zipper on Sticky Fingers, or the stickers and posters in Dark Side of the Moon). And even without the extras there are just so many album covers that are just great *art*. It was the cover that made me buy Joy Division's "Closer", even though at the time I'd never heard of them. Frankly, the album cover, AFAIC, is still the best part of the record.
So, hey, music industry...why don't you downplay the actual tracks and hit up on the packaging? In the Internet world everything is just a stream of bytes so your bytes aren't much more special (and certainly not worth more) than anyone else's stream of bytes. So give it up and make something tangible, keep-able, desirable. Put the disc in a wooden box with a wool interior, or wrap it in tinfoil, whatever...make the *experience* more meaningful. As much as I enjoy the convenience of buying a track in iTMS, I am missing an "experience" that I got with some of the better-packaged albums.
And the crazy thing is that this is not new to the music industry; they've put out special collectors editions of stuff for years and years; I have CDs that came in pseudo-film cannisters, wooden boxes, even bubble-wrap. Sure I paid a premium but I didn't just want the music, I wanted the creative packaging as well.
The party's over (Score:5, Interesting)
This is how OPEC will feel, if ever we get off our asses and start making commercially viable electric cars.
Here we go again (Score:4, Insightful)
Not all bands write their singles and then pad the rest of the album out, some actually write about 20 songs, select the ones they like the most, and release an album. THEN they choose what songs to release from the album.
It's only the American Idol and other reality show winners that choose the singles prior to releasing the album (most likely because they're covers) and then pad the rest with crap.
I'm sure I'm not the only one who thinks that there are better songs on the album...
Dont hold your breath (Score:4, Interesting)
Labels = VC for artists (Score:5, Insightful)
Small start-ups can self fund, but the largest companies continue to have significant VC backing because it takes a lot of resources to make products and grow. Companies sign with VCs because they want that upfront investment. Unsigned artists can promote/distribute, but the biggest artists continue to have major label backing. Most serious artists continue to want label deals because they want the upfront payment and marketing/distribution muscle that allows them to focus on their artistry and not how they're going to feed themselves tomorrow. As proof, notice that even the big YouTube/MySpace artists are signing label deals.
So what's changing is that the labels will have to provide more services for artists and get things other than CD sales in return. But the need for "venture capital for artists" isn't going anywhere, so long as there are people who want to make music for a living.
Stop with the required logins! (Score:4, Informative)
By Troy Wolverton
Mercury News
San Jose Mercury News
Article Launched:11/17/2007 01:37:25 AM PST
In the end, the long battle by the record labels against unrestricted digital music may have been little more than sound and fury signifying nothing.
At least, that's how it's starting to appear now that two of the major labels in recent months have embraced in some fashion the MP3 format, which has no copy protection. The early returns from those moves indicate they've had little impact on the industry's fortunes - for better or for worse.
Instead, the moves highlight a bigger problem. And that is how the labels are going to replace sales of CD albums, which constituted the core of their business and have plummeted in recent years.
"These are ailing businesses on their last legs," said Eric Garland, chief executive of BigChampagne, a market research company focused on digital media. The question of copy protection on song downloads "matters a whole lot less to them than it once did."
For years, the major record labels fought a pitched battle against the MP3 format. The format doesn't allow for any copy restrictions, which made it a popular choice for songs swapped on illicit file-trading sites such as the original Napster and Morpheus.
To combat such piracy, the major labels insisted online stores that sold music had to wrap songs and albums in digital rights management (DRM) technology, which can restrict the number of copies users can make of a song or the number and types of devices it can be played on.
But online music and electronics vendors complained that such restrictions were limiting sales, in part because not all formats worked on every type of player.
In the past year, the music labels have become increasingly receptive to those arguments. In April, EMI announced it would make its entire catalog available for sale in DRM-free formats. In August, Universal Music Group, the world's largest recording company allowed the sale of a significant portion of its catalog in the MP3 format.
The labels' moves have opened up competition in the digital music space. In September, Amazon.com launched a digital music store, featuring only MP3 tracks. Meanwhile other, older digital music vendors, including iTunes and Wal-Mart's Web store, added DRM-free tracks.
Because those songs lack DRM, they can be played on just about any digital music device.
Although it's still early, DRM-free music seems to have had, at best, a slight positive benefit to the music industry.
Sales of DRM-free music to date have "outperformed" EMI's expectations, and Wal-Mart has seen its MP3 sales grow "considerably" since August, when its Web store made them available, representatives for the two companies said. However, neither they nor other labels or Web stores disclosed specific sales results.
Overall, the number of digital songs sold each week seems to have been unaffected by the launch of the major DRM-free stores since May, according to data from Nielsen SoundScan. Digital song sales - both of tracks with and without DRM - are in the same range after May as they were in the weeks before DRM-free sales started.
But that's small consolation for an industry whose wholesale revenue in the United States was down 11 percent in the first half of this year, according to IFPI, the industry's global trade group. That's on top of declines in retail sales in six out of the past seven years, according to the Recording Industry Association of America.
Even if the effect has been questionable, some analysts think that eventually all the labels will sell DRM-free music.
"The writing on the wall, for the most part, is here for DRM," said Michael Gartenberg, a vice president and research director for Jupiter Research.
But not yet. Universal and Warner are still just experimenting with DRM-free music, and Sony BMG isn't even doing that much, analysts note.
"The marketplace wil
Re:Death of the album (Score:5, Insightful)
Some albums were a cohesive experience. "The Wall" by Pink Floyd isn't one song and 9 batches of bad rehearsal. Led Zeppelin's albums always fit pretty well together, too. Lots of rock bands did this at one time or another, and the easy listening people nearly always do.
As for the album as just a compilation of unrelated songs, sure, some bands and soloists have always done B-sides. Some of them did good B-sides, though. 5 great songs and 5 or more good songs is, to me, worth $10. One hit and 9 or more songs the proverbial million Shakespearian monkeys could each write and perform individually is definitely not. This is one reason the movie industry hasn't been hit by copyright infringement quite as hard -- it's called production values.
Another reason is that the movie industry has largely moved to market-based pricing instead of setting a minimum any disc should get (hey -- isn't that illegal anyway?). If a movie just came out and it's really hot on the market, it might be $30 on DVD and $45 on Blu-Ray. If it's a B monster flick from the 1960s, there's a good chance it's in the dollar bin. How many albums from the big four record companies are in a dollar bin, or even a $5.00 bin? Lots fewer than deserve that deep of a discount, I'll say.
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