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RIAA Loss Report Contradicts Nielsen Sales Record 348

Posted by CowboyNeal
from the cult-of-spin dept.
DerekAtLC writes "In a not-so-surprising twist of the tables, RIAA reporting of 'losses' is a little bit off. An interesting blurb at Ars Technica referencing a Kensei News article points out that Nielsen's Soundscan (Which tracks retail point-of-sale numbers for the music industry) shows a 10% increase in sales from Q1 2003 to Q1 2004. The RIAA has recently reported drops in revenue from last year, citing online piracy as the main problem. The crux of the issue? The RIAA hasn't been talking about sales or revenue in terms of sales to consumers or money generated via those sales. The RIAA talks about losses in terms of number of units shipped to retail outlets. The article points out plenty of problems with this (and reasons why we are seeing the trend), but it is fairly obvious that the RIAA is not reporting the most 'useful' numbers to the public."
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RIAA Loss Report Contradicts Nielsen Sales Record

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  • by LostCluster (625375) * on Thursday May 13, 2004 @08:31PM (#9146792)
    Another interesting thing has happened over the last few years. The growth of mega-chains such as Best Buy plus the .com's joining into the marketplace have knocked mom and pop record stores out of existance.

    Less stores selling music means not only are stores keeping smaller inventories, but some store inventories fell to zero as they left the business. There's just plain less "unsold" disks sitting in the system.
    • by AhBeeDoi (686955) on Thursday May 13, 2004 @09:34PM (#9147174)
      Less stores selling music means not only are stores keeping smaller inventories, but some store inventories fell to zero as they left the business. There's just plain less "unsold" disks sitting in the system.
      This seems like a highly debateable point as to causes of lower inventory levels. Traditionally, inventory levels have been an indirect measure of confidence in the economy. However, utilization of JIT methods aided by technology enables businesses to run at lower levels than previously thought acceptable. In fact, there really isn't any contradiction to the principles of economic order quantity because both ordering costs and turn around times are much lower. This is truly a new paradign.
    • by fimbulvetr (598306) on Thursday May 13, 2004 @10:01PM (#9147362)
      Isn't this the opposite of capitalism?

      For years, I had to go to run down stores with poor customer service and no inventory. Now, I can order online.

      Why would we want to go backwards? Aren't we supposed to evolve? If you want your mom and pop store to succeed, shouldn't you be searching for a niche/market in which you excel? Do you think the world really owes your mom and pop store a favor?

      I don't think so. I hate *most* mom and pop stores. Too many salesmen, too many commissions. Too little inventory, too poor customer service. Too high prices, too many just grunge music fans.

      When I buy online, I hear reviews from people that listen to MY music. Not yours, I'm not limited to some little twat that only listens to such and such music.

      Note to moderators - This post is objective.

      • by lidocaineus (661282) on Friday May 14, 2004 @01:10AM (#9148404)
        Too many salesmen, too many commissions. Too little inventory, too poor customer service. Too high prices, too many just grunge music fans.

        Uh, isn't that most huge chains? And what customer service are you referring to from any online store? Customer service to them is tracking your order. Let's take music stores for example.

        Killer mom-and-pop stores still exist ESPECIALLY in record sales; in big cities (like Chicago) where the music scene is all about a well stocked record store, it's MUCH preferred over a chain. You walk into the store, hum a few lines, and it can be pretty damn impressive when the guy behind the counter a) knows who you are and b) can name the tune immediately. Not to mention the fact that they know what you like and drop you tidbits about what's coming out, and if you like certain bands, that you'll like certain OTHER bands, on top of which, special ordering is sooo painless most of the time. They also more often than not have a pulse on what's going on locally. And where do you get this limited selection bs?? I find MORE stuff at my local record store (and not even the obscure and/or local stuff) down the street, along with a whole slew of imports. Half the time I can't find the exact stuff I want online, like a very specific concerto recording (almost always easily found by my fave classical music place) or that Jawbreaker import that has been out of print forever.

        Now don't get me wrong; I also love places like amazon when I know exactly what I want... but no internet store is going to take the place of stopping in at Reckless and chatting (or arguing!) with the music geeks on both sides of the counter about the newest album releases, etc etc.
    • by Anonymous Coward on Thursday May 13, 2004 @10:06PM (#9147410)
      > Another interesting thing has happened over the last few years. The growth of mega-chains such as Best Buy plus the .com's joining into the marketplace have knocked mom and pop record stores out of existance.

      Excellent point. But it goes further than you suggest.

      It is much easier for a mega-store to predict its sales, and manage its inventory efficiently, than it is for a small store.

      For example, a small store might receive shipments once a week, or even once a month. For a given CD, that store might expect to sell just two copies before the next shipment, but a week or a month is a long time to be sold out of something, so that store will want to stock three, or more likely four copies of that CD. That's 50% excess inventory on average. Plus, there is nothing the small store can do with that excess except to return it with the next delivery truck.

      But a mega-store will receive shipments every day. Plus, the mega-store might expect to sell 5 copies per day of that same CD. So let's say the mega-store keeps 10 copies of that CD on the shelf, with re-orders every day, and ends up returning the excess 5 copies at the end of a month. But that's 5 copies returned on a month's sales of 150 copies, which, in the long run, only represents an excess inventory of 3%.

      And let's not forget the mega-stores' other advantages for efficient inventory management, including computerized check-outs, and the ability to move inventory around from one store to another.

      So it shouldn't surprise us if excess CD shipments have been drastically reduced.

      I can see another way in which Internet Radio, and music downloads would lead to more efficient sales. Today's buyer will go the the record store with better knowledge of what he/she likes and wants. Thus, that buyer will be less likely to pick up the mass-marketed Britney Spears CD, and more likely to pick up some lesser known band. It's not worth it to the record store to stock extra boxes of a small band's CD, the way they would with a Britney Spears CD. Plus, it's less likely for there to be a sudden rush on that small band. Thus, the trend is away from the mass-marketed items, where it's worth it to be wasteful (and necessary, to meet the peaks), and toward more highly focussed items, which sell a few at a time. And let's not forget the increase in the almost-100%-efficient special order sales.

      As to the drop in international sales, I think that is more likely to be a shift away from the heavily-advertised American groups, and toward the less-advertised local groups in each country. Once again, Internet Radio and downloads would allow listeners in each country to discover those other groups, rather than simply being led by U.S. advertising. I assume that many, if not most of those smaller groups' sales in other countries are _not_ measured by the RIAA.
      • by Tiram (650450) on Friday May 14, 2004 @02:54AM (#9148758) Homepage Journal
        As to the drop in international sales, I think that is more likely to be a shift away from the heavily-advertised American groups, and toward the less-advertised local groups in each country. Once again, Internet Radio and downloads would allow listeners in each country to discover those other groups, rather than simply being led by U.S. advertising. I assume that many, if not most of those smaller groups' sales in other countries are _not_ measured by the RIAA.

        I don't know if this is a trend everywhere, but it seems to be true for Norway. First quarter this year, the sale of Norwegian CDs* was up by 46% volume (54% value) compared to the same period last year. 21% per cent of the CDs sold were Norwegian, up from 14% last year.

        * Not including singles and DVDs, which probably would have pushed the numbers even higher.

        Ref: Sterk økning i salg av norsk musikk [www.dn.no] (in Norwegian, I'm afraid ...:)

    • by MtViewGuy (197597) on Thursday May 13, 2004 @11:27PM (#9147901)
      I think the problem that is affecting groups like the RIAA, MPAA, the television networks, and so on is the fact that their techniques for measuring things like sales and viewership are being rapidly obseleted by changes in communications technology.

      If you're read Alvin Toffler's book The Third Wave, Toffer some 25 years ago said that as more communications choices for consumers become available, old means to measuring "eyeballs" won't work anymore. I mean look at what has happened since The Third Wave was published in 1979:

      1. Consumers now possess the technology to time shift TV programming by videocassette recorders and increasing digital Personal Video Recorders, which is making the idea of prime time meaningless.

      2. The choice of TV programming has literally increased exponentially. Back in 1979, most Americans could only watch at most 5-7 channels of TV programming on over-air broadcasts; today, cable TV has expanded the available channels to over 70 and small-dish satellite TV has expanded the available channels to over 200!

      3. The rise of pre-recorded videocassettes and now DVD's have drastically altered the landscape of both movies and TV programming. Indeed, many movies are only breaking even with home video sales (or doubling their profit with home video sales!) and there's now the new trend of complete TV seasons available on DVD! I'm sure HBO has enjoyed healthy sales of full seasons of The Sopranos, Sex and the City, and Six Feet Under on DVD sets.

      4. The rise of the public Internet has also started to affect TV viewership, as several recent surveys have shown.

      5. Current methods of measuring TV viewership don't take into account the increasing trend of large scale public viewing of TV programs at public gathering places and/or having a large group of friends watching the program at someone's residence. For example, the final episode of Friends probably got underreported by Neilsen tracking because a large portion of viewers probably saw it in a group setting either in a public place or at a private residence with a large living room.

      6. Tracking sales of music will have to be revamped, especially in light of the way Wal-Mart handles sales inventories, the sheer retail power of Best Buy, the heavy use of online sales at Amazon and Barnes & Noble web sites, and individual song downloads at various legal sites such as Apple's iTunes web site.

      I think if the various media companies actually bother to change their way of monitoring sales/viewership they could actually get a far more accurate measurement, something that could eliminate underreporting of actual sales/viewership.
  • No surprise there (Score:4, Insightful)

    by jbellis (142590) * <jonathan@carnage ... m minus math_god> on Thursday May 13, 2004 @08:32PM (#9146800) Homepage
    So the RIAA won't stop at bending the facts a little -- okay, a lot -- on their way to ripping fair use out of America. Nothing we didn't know.

    What will be interesting will be to see how much play this gets in the mainstream media. Probably no more than any of the other facts that aren't convenient for the "hackers steal $billions on teh intarweb" headlines they like to run. :-|

    • Re:No surprise there (Score:2, Informative)

      by Anonymous Coward
      you're right.... why would CNN (a division of time warner or whoever) go hard on warner music and its trade group?

      don't worry, the only place we'll be hearing about this kind of news is in the little news outlets and blogs.
  • Dont forget (Score:5, Informative)

    by Datasage (214357) <Datasage@theworldisgrey. c o m> on Thursday May 13, 2004 @08:32PM (#9146801) Homepage Journal
    They also tend to count every single pirated copy as a loss. Even though, if forced to buy, most of it would not be purchased.

    • by k4_pacific (736911) <k4_pacific@noSpAM.yahoo.com> on Thursday May 13, 2004 @08:40PM (#9146865) Homepage Journal
      The US census is now counting every possible sperm-egg combination as a "potential" citizen.

      • by ThatsNotFunny (775189) on Thursday May 13, 2004 @09:29PM (#9147141)
        In that case, my left hand is guilty of mass murder...
        • by Anonymous Coward
          And Hi-Five for another lefty, uh, hi-five with the right hand...
        • by sik0fewl (561285) <[moc.liamtoh] [ta] [xxllehlatigidxx]> on Thursday May 13, 2004 @10:28PM (#9147537) Homepage

          ... not to mention mass turbation.

        • by luke923 (778953) on Thursday May 13, 2004 @11:45PM (#9148010) Journal
          Well, if we learned anything from Monty Python, it's that: There are Jews in the world. There are Buddhists. There are Hindus and Mormons, and then There are those that follow Mohammed, but I've never been one of them. I'm a Roman Catholic, And have been since before I was born, And the one thing they say about Catholics is: They'll take you as soon as you're warm. You don't have to be a six-footer. You don't have to have a great brain. You don't have to have any clothes on. You're A Catholic the moment Dad came, Because... ...Every sperm is sacred. Every sperm is great. If a sperm is wasted, God gets quite irate. Every sperm is sacred. Every sperm is great. If a sperm is wasted, God gets quite irate. Let the heathen spill theirs On the dusty ground. God shall make them pay for Each sperm that can't be found. Every sperm is wanted. Every sperm is good. Every sperm is needed In your neighbourhood. Hindu, Taoist, Mormon, Spill theirs just anywhere, But God loves those who treat their Semen with more care. Every sperm is sacred. Every sperm is great. If a sperm is wasted,... ...God gets quite irate. Every sperm is sacred. Every sperm is good. Every sperm is needed... ...In your neighbourhood! Every sperm is useful. Every sperm is fine. God needs everybody's. Mine! And mine! And mine! Let the Pagan spill theirs O'er mountain, hill, and plain. God shall strike them down for Each sperm that's spilt in vain. Every sperm is sacred. Every sperm is good. Every sperm is needed In your neighbourhood. Every sperm is sacred. Every sperm is great. If a sperm is wasted, God gets quite iraaaaate! Actually, I'm more Protestant, and - as a member "of the Protestant Reformed Church, which successfully challenged the autocratic power of the Papacy in the mid-sixteenth century, we can wear little rubber devices to prevent issue." "...and, by wearing a rubber sheath over my old feller, I could insure... that, when I came off, (someone) would not be impregnated." After all, "...That's what being a Protestant's all about. That's why it's the church for me. That's why it's the church for anyone who respects the individual and the individual's right to decide for him or herself. When Martin Luther nailed his protest up to the church door in fifteen-seventeen, he may not have realised the full significance of what he was doing, but four hundred years later, thanks to him, my dear, I can wear whatever I want on my John Thomas,... [sniff] ...and, Protestantism doesn't stop at the simple condom! Oh, no! I can wear French Ticklers if I want....French Ticklers. Black Mambos. Crocodile Ribs. Sheaths that are designed not only to protect, but also to enhance the stimulation of sexual congress....I can go down the road any time I want and walk into Harry's and hold my head up high and say in a loud, steady voice, 'Harry, I want you to sell me a condom. In fact, today, I think I'll have a French Tickler, for I am a Protestant.'" But, I digress. Monty Python is great.
      • by machine of god (569301) on Thursday May 13, 2004 @10:00PM (#9147353)
        Fine so long as I can claim the dependants.
    • just don't use it to justify theft... if the RIAA charges more than you want to pay, that doesn't mean you get to take it anyway. Check out emusic or other sources of indie music instead.
      • by dsanfte (443781) on Thursday May 13, 2004 @08:54PM (#9146942) Journal
        if the RIAA charges more than you want to pay, that doesn't mean you get to take it anyway.


        First, it's not theft, it's copyright infringement.

        Second, if a person can't afford to buy something, they're not morally obligated to thrash themselves with the spiked whip of capitalist ethics. They hurt no one by doing so.

        Strict adherance to law is simply strict adherance to politicians. They're the ones who make it.
        • If you can't afford to buy a copy of some (probably pretty bad) music, I think you are morally obligated to respect the creators' wish not to obtain it via other means. In this case, it has nothing to do with obeying politicians; basic copyright law just happens to be the most reasonable idea. After all, it's not like you need this music to save your life (this issue with patented medications is a bit trickier; some countries, like India, choose to simply ignore those patents). Anyway, the main reason s
        • by GileadGreene (539584) on Friday May 14, 2004 @12:41AM (#9148277) Homepage
          ...if a person can't afford to buy something, they're not morally obligated to thrash themselves with the spiked whip of capitalist ethics...

          Much like if a closed source software company wants your software, but can't "afford" to abide by the rules of the GPL, they're not morally obligated to thrash themselves with the spiked whip of GNU ethics.

          If, like many of us, you object to the scenario I have outlined above, you will want to vigorously support copyright law. That is the root of your moral obligation - not capitalist ethics, but your own ethics. This is very much like supporting free speech: I may object to the uses that the RIAA and MPAA make of copyright law, but I will support their right to do so.

      • Once again.

        Copyright infringement is not theft.

        If you believe it is, fine. However, you disagree with the American justice system, and a long tradition of anglo-saxon jurisprudence. Theft is depriving someone of something. If you copy someone's song when you have no right to do so, they still have their song. What you've done is infringe on their rights to copies of that song.

  • I'm sure you know ever really getting hard numbers on piracy is impossible just because the nature of the industry and who would really buy something if they couldn't get it for free.

    Honestly the responce to it? I think they should embrace and encourage, maybe give a biz model similar to what Napster was pushing for. A distributed model (sign the music so you know it isn't tampered with) that will is a premium up and above the free realm stuff like kazaa. That way people still get their free stuff, the music companies get a shit load of revenue without much effort on their part and everyone is a little happy.

    Of course they want to have absolute power over their product, think of the profit that could be made if they could control it no matter what. Or if they could do a pay to play model(pay per view), or if they could figure out a way to pull a microsoft in that they have a limited seat license that only one or 2, etc people could watch that copy of the movie at one time. That is a gold mine in their eyes and will be what they go for. Is it right...? No, but do they want it? Yes.

    Piracy, P2P, and etc are just the latest buzz words for them to try and get what they can. Remember a couple of years ago how piracy was akin to supporting terroism, it is just getting more attention from you and I because it is now in a field that is affecting us more as techies.
    • That way people still get their free stuff, the music companies get a shit load of revenue without much effort on their part and everyone is a little happy.

      Oh I get it, they take a loss with every sale, but then make it up on volume.

    • I'm sure you know ever really getting hard numbers on piracy is impossible just because the nature of the industry and who would really buy something if they couldn't get it for free.

      I have to disagree with you. On the contrary, I think the majority of people would choose buying something over getting it for free. The catch here is that the item has to be priced reasonably. It all comes down to economics. At $5 a cd, piracy would drop to negligible levels. If you go even lower to $2 a cd I daresay no

      • I know that their prices are too high. I know that music piracy is cutting into their profits some, but not as much as they make it out to be. I know that if CDs were priced at $5 or whatever, many P2P downloaders say they would buy instead, but would they? Or would they say it's still too high, or just buy the one every other month that they really really want, while downloading three or four others?

        There is such a large outcry that the RIAA should change their business model, and until they do, they'r
  • by LostCluster (625375) * on Thursday May 13, 2004 @08:34PM (#9146817)
    Sales are down for the RIAA... they're considering a CD sold at the point when they get paid for it, the point that it lands in the warehouse of a store chain, not the point at which it lands in a consumer's hands which is where Soundscan sets up its counting points.

    The fact that store shelves are holding less in inventory is bad for them, but isn't exactly a sign of piracy, just a sign that the RIAA's business model is becoming dated.

    I'm pretty sure that the major chains such as Wal-Mart and Best Buy would love to have a small CD factory in the back of each store in which they could print the discs and surrounding paperwork on a just-in-time basis. Afterall, both the music and liner notes could be available to the store over a digital network. Why ship physical packages that might not sell when you can just ship blank disks and figure out what to put on them later?

    Bottom line, it's going to get worse for the RIAA. They profit from the wastes in the system, and the system just keeps getting better at not buying things that can't be sold to consumers...
    • Why ship physical packages that might not sell when you can just ship blank disks and figure out what to put on them later?

      Because that's not how real CDs are manufactured.

      See here [oasiscd.com] for example.

      • Things change. Typically, no, commercial CDs aren't burned by a Plextor drive at the factory, but the market is changing and that's directing the industry to change too.

        If burned discs aren't a solution, then they have to come up with a different solution. If they find a way to press one-off CDs because of the prodding, great for everybody. But maybe, just maybe, that's the hint that CDs themselves aren't the solution.

        Don't consider it a problem that it can't be done now - it's an opportunity for a new product to be invented, a new mechanism to be introduced. Could be a digital distribution medium that will actually be researched rather than the crap they've been hacking together lately.
        -N
  • by Frizzle Fry (149026) on Thursday May 13, 2004 @08:34PM (#9146821) Homepage
    If they have the moral and legal right to seek action against people who pirate music in the case where piracy is costing them lots of sales, then they have that same right in the case where it doesn't hurt them much or at all (or even helps them). Whether you have the right to copy music should not be decided based on how it affects the profits of the companies who make it. Either it belongs to them and these restrictions are permissible, or they are not.
    • by MBCook (132727) <foobarsoft@foobarsoft.com> on Thursday May 13, 2004 @08:55PM (#9146950) Homepage
      That's true. The problem is that using their numbers, they are lobbying congress to take consumers rights away and make the penalties for "casual piracy" (a few songs, as opposed to running a pirating ring where you copy and sell 1000s of discs) rediculous. They are also trying to do things like extend copyrights and such, which can easily negativly effect consumers.

      They have the right to fight piracy. They DON'T have the right to use wildly missleading numbers to convince the government to help them prop up their failing business model.

      • by pavon (30274)
        They have the right to fight piracy. They DON'T have the right to use wildly missleading numbers to convince the government to help them prop up their failing business model.

        Exactly. They have been using these numbers to scare government officials into thinking that if they don't take away our rights, the music and movie industries will collapse. The results of this include:

        The DCMA
        This law makes it illegal to decrypt copywritten files, possibly even illegal to create and discuss decryption methods,
  • by magarity (164372) on Thursday May 13, 2004 @08:35PM (#9146825)
    the RIAA is not reporting the most 'useful' numbers to the public."

    OMG! Someone is using statistics to slant an issue their way! OMG!
  • by 3seas (184403) on Thursday May 13, 2004 @08:36PM (#9146835) Journal
    ... they have to hide the money they are keeping (stealing) from the artists somehow...
  • by Greyfox (87712) on Thursday May 13, 2004 @08:37PM (#9146843) Homepage Journal
    From all those companies lying about their revenue during the height of the stock market bubble/scam? Are the numbers the RIAA is reporting to us any better than the numbers Enron or Tyco reported to us?
    • by LostCluster (625375) * on Thursday May 13, 2004 @08:41PM (#9146876)
      From all those companies lying about their revenue during the height of the stock market bubble/scam? Are the numbers the RIAA is reporting to us any better than the numbers Enron or Tyco reported to us?

      The RIAA's numbers are at least correct counts of what they're supposed to be representing. However, consumers are paying less for music doesn't ring too when it's the wholesale transactions going down but not the number of retail transations. That just says there's less CDs sitting unsold on shelves these days...
  • by LostCluster (625375) * on Thursday May 13, 2004 @08:38PM (#9146845)
    Soundscan would also count an "unsigned artist's" CD just the same as any other because it went through the cash register... but the RIAA's stat doesn't include CDs sold by companies that aren't members of their group.

    The RIAA represents most of the recording industry, but not all of it. Sales going down for the RIAA members does not always equate to sales going down for the industry...

    You've got to make sure you know what a stat was really counting before you make conclusions based on it.
    • by phalse phace (454635) on Thursday May 13, 2004 @08:50PM (#9146931)
      "The RIAA represents most of the recording industry, but not all of it. Sales going down for the RIAA members does not always equate to sales going down for the industry..."

      I agree. The way the RIAA calculates sales, by the "number of units shipped to retail outlets," is very flawed. I'm sure all those purchases I've made through emusic [emusic.com], the iTunes Music Store [apple.com], DMusic [dmusic.com], and CD Baby [cdbaby.com] haven't been included into their [RIAA] numbers.

      This leads me to believe that music sales are actually up worldwide. Until *all* music sales are calculated (from digital downloads and independent/non-RIAA CDs to RIAA member CDs), I don't think we'll really know for sure what the sales numbers are like.

    • by Tired and Emotional (750842) on Thursday May 13, 2004 @08:58PM (#9146971)
      That's the crux of the matter.

      The fact is that the RIAA members had a near monopoly on the means of distribution until the last few (perhaps as few as 2) years. What is really going on is musicians are taking back control of distribution. Just about every established band in my town has a cd. You can buy them at shows, or from web sites like CD BABY, or even from independent record stores run by people who care about music and musicians rather than just shoveling product.

      This is good for musicians but more importantly its important for listeners because as a result a lot of styles, both historical and regional, can once again be heard.

      But the RIAA is in trouble because their business model is no longer valid - that business model was to extract monopoly rents (to use the economists jargon) from the distribution system.

      Given that their technology based initiatives will be useless against organized piracy who already operate outside the law one can only assume their real objective is to regain monopoly control of the distribution channel. To do that they would have to mandate equipment that could only play media licensed by their members, and I don't think anything passed so far is that draconian.

  • Reminds me.. (Score:3, Insightful)

    by fiannaFailMan (702447) on Thursday May 13, 2004 @08:38PM (#9146848) Journal
    ..of the people who are complaining to Congress about the cost of 'frivolous' lawsuits whilst buttering up their shareholders in their annual reports about how the cost of litigation 'will not have a significant impact on the bottom line.'

    The bottom line is that anything big businessmen have to say should be taken with a pinch of salt.

  • by Newer Guy (520108) on Thursday May 13, 2004 @08:39PM (#9146856)
    in the past, the RIAA always shipped considerably more units than were sold. Why the change? Retails stores simply want less inventory, so they order less, even though they are selling more.

    This trend is commonplace everywhere. Retail outlets don't want things sitting on their shelves for two reasons: First, because they have to PAY for them and second if they don't sell, they have to PAY to ship them back.

    What the record stores are doing has been done for years in most other retail outlets. It's called "Just in Time" inventory. For example, a grocery store tries to predict how much lettuce they'll sell and only buys that much, lest they get stuck with rotting produce. McDonald's made a science of this back in the '90's.

    Now, the RIAA wants to use this new inventory trend to SPREAD THEIR LIES! It shows just how dirty rotten to the core they are! They KNOW what's going on; they're cherry picking stastics to LIE!!

  • Apparently, people who deny that magic is real haven't looked at statistics. After all with statistics and polls you can take information that you want to see and conjure up some arcane formulation that will make it look as if that information is in fact the truth.

    If we follow this vein, there are many other forms of magic, such as economics. Following this even further, we can point out the evil warlocks of the world, those who practice their economics and statistics steeped in their own lies.

    I'm sorry,
    • There was a book out in the '60's called: "How to Lie With Statistics" Basically, you can find (or create) a statistic to say anything you want.
  • by Deitheres (98368) <brutalentropy@gmaMOSCOWil.com minus city> on Thursday May 13, 2004 @08:42PM (#9146880)
    Of course the RIAA is going to fudge the numbers. If word got out that they were *GASP* not losing money, or at least not as much as they lead people to believe, it would make it oh-so-harder to justify their legal pursuit of grannies and pre-teens to the general public. As it is, it's a game of "oh look at us, we're the poor RIAA, we are making so much more money in a week than you poor consumers will ever make in our lives, but it's not as much as it used to be... we used to make more in a DAY than you would make in your entire life! Take pity on us, and understand why we are fucking the artists, and giving them pennies for every CD sold, so that we can afford limousines and caviar for our poor underfed kitties!". And the consumers eat it up, as evidenced by the ill-informed dolts saying things like "duh, anybody who downloads music off the internet is a thief". The RIAA makes it so that even if you download music that you're ALLOWED to (like Indy) it has a stigma associated with it. It's not about protecting "the artists", or the IP, it's about ensuring their lifestyle. They're thieves too, but in a way that is so much worse than average Joe Public who jumps on Kazaa or SoulSeek to download the new Creed/Eminem/[insert shitty pop band here] song-- Joe Public downloads the song because he likes or loves music, the RIAA and MPAA'ers of the world do what they do because they are money hungry fucks who will do anything they can to maintain their dominance.

    I'm not a religious person, and I normally don't resort to Biblical citations, but I think this one applies:

    "The love of money is the root of all evil." (also one of the most misquoted passages in the Bible just for the record).

    On the reverse side, piracy is not the ideal situation either. I am a musician, and I hope someday to make a living off my music, but I know it won't be with a record deal-- and I sure as hell know it probably won't be from selling records. Hopefully by the time I am ready to try my music as a full time career we'll have something a bit more established that will allow truly independent music distribution, with a vehicle that guarantees the artist will at least see some money for their hard work.

    Dan
    • it would make it oh-so-harder to justify their legal pursuit of grannies and pre-teens to the general public

      The RIAA doesn't exist for the sole purpose of going after people - obviously they must feel economically threatened by file-swapping, or why would they engage in something which results in so much bad press? The RIAA is acting in its own self-interest, not out of a desire to be cruel.

      We're the poor RIAA, we are making so much more money in a week than you poor consumers

      Of course the CEO's of the

  • by SuperBanana (662181) on Thursday May 13, 2004 @08:43PM (#9146885)
    but it is fairly obvious that the RIAA is not reporting the most 'useful' numbers to the public

    I believe the word you were searching for was "honest", not "useful".

    Then again, this is peanuts compared to Hollywood which manages to make it look like every single movie looses (or makes very little) money so they don't have to pay taxes or pay people who are supposed to get a cut of the profits.

    Of course, most of corporate america does exactly the same thing, which is why they've gone from a 52% tax share (versus individuals) to under 5% in 50 years.

  • Easy.. (Score:4, Interesting)

    by CashCarSTAR (548853) on Thursday May 13, 2004 @08:47PM (#9146915)
    Like other people have mentioned, record stores have been getting out of the business left and right. Either they've been closing, or switching over to more mixed media stores. The big boxes don't order huge inventories, especially of back catalog items, and smaller stores have been switching to other media types (DVDs and games mostly, very lucrative and growing markets)

    So is this due to piracy?

    Err..no.

    Sales of the hit new music has remained pretty constant (which is expectable in a mostly stable marketplace), which are often the most easy to download, so it makes it obvious that something else is at play here...

    Maybe it could be the MASSIVE growth of used media stores that have been popping up all over the place?

    So what can be done about that? It's obviously legal, and easy to say that it's ethical to do, after all, we do have the right to sell what we have paid for...

    My suggestion for the RIAA is to actually lay off the worrying about piracy, and instead, run an information and advertising campaign informing consumers about how when they buy a used CD, they are in fact ripping off their favorite artist. By changing the focus, and acting through education and not litigation they can regain some respectability, especially if they make a good argument for it.

    • WTF? Since when is there a MASSIVE growth in used media stores. In the Phoenix area, there is basically one chain of 5 stores that sells used music. None that opened since 1996. In the Bay Area, there are two separate chains with 5 stores total that sell used music. (There are a few other stores, but they are tiny and I doubt they sell much).

      If what you said is true, there would be many used stores all over the place. If there are, I can't find them. Unless you mean Ebay, there isn't a MASSIVE growth of us

      • Re:Easy.. (Score:2, Informative)

        by corrosive_nf (744601)
        uhh you are really wrong, Amoeba record store sells ALOT in the bay area, anytime you go in, tons of people are buying cd's and yes even records.
  • by jonnystiph (192687) on Thursday May 13, 2004 @08:48PM (#9146918) Homepage
    You know what they say 97.89% statistics are made up on the spot....

    This was obviously a farce from the get go. Mp3's open people up to music they would have never bought, same can be said with libraries and books.
  • Statistics (Score:5, Insightful)

    by darkitecture (627408) on Thursday May 13, 2004 @08:54PM (#9146941)

    Ahh, statistics are wonderful things, aren't they?

    Reminds me of a couple of classic quotes about statistics:

    Aaron Levenstein once said "Statistics are like bikinis; What they reveal is suggestive, but what they conceal is vital."

    and Thomas Carlyle once said, "A witty statesman said, you might prove anything by figures."

    The thing is, I dislike the RIAA quite vocally, but I'd still probably believe them if they said their revenue is down. But the first thing they teach you about statistics in math is that "Correlation does not equal causation."
  • This is why I support The Coalition of Independent Music Stores.
  • by rben (542324) on Thursday May 13, 2004 @08:57PM (#9146967) Homepage

    This is another example of the kind of deceptive practices that the RIAA is using to convince congress to pass laws that turn our kids into criminals. The RIAA will continue to pursue this path until they learn that consumers will actually take a stand against it.

    I would like to urge people to declare their independence from the RIAA on the week of July 4th, 2004. Boycott them. Do not purchase music or listen to the radio during that time. Instead, why not check out the independent artists that distribute their music for free? Show the RIAA that you know how to hit them back where it hurts... in the wallet.

  • In other words (Score:4, Interesting)

    by Junior J. Junior III (192702) on Thursday May 13, 2004 @09:02PM (#9146993) Homepage
    In other words, the geek boycott of RIAA labels is failing. I don't really see this as good news.
  • by sPaKr (116314) on Thursday May 13, 2004 @09:08PM (#9147029)
    This shipping product to your retailer/resailers just to have it round trip and come back to you later is called 'stuffing the channel' its an old trick. Sales Scum (tm) use it all the time to inflate numbers at the end of a quarter. If they (RIAA) is going to count numbers by the overly simple math then lets beat them at their own game. I say we setup a "Retailer" that never sells anything but just orders shipments like crazy. This "Retailer" Hoovers up as many units as they can ship. Then it just turns around and ships them back as unsold stock. We might even be able to work out a deal with the delivery companies to not even deliver the units just move them from the shipping dock to the recieveing dock at the distribution points.
  • This is nothing new (Score:5, Informative)

    by PimpbotChris (775813) on Thursday May 13, 2004 @09:08PM (#9147030)
    ARIA tried to hide their record CD sales from the Australian public Music industry way off track with song and dance about falling sales [smh.com.au]
  • by SlimFastForYou (578183) <konsoleman AT yahoo DOT com> on Thursday May 13, 2004 @09:09PM (#9147034) Journal
    1.) Announce a wholesale price hike, causing retailers to stock up on inventory, and purchase less the following year
    2.) Attribute "fewer sales" to P2P
    3.) Sue the butts off of "pirates"
    4.) Appeal to the public as being truly hurt by these individuals, while extorting money from defenseless individuals who couldn't afford music in the first place
    5.) ???
    6.) Profit!!!

    Note: By "pirates", I am referring to individuals who share music they MAY indeed own yet are "breaking the law" by doing so.

    I don't say piracy is right or wrong. For those who can afford licensed media yet pirate, shame on them! For those who are concerned with the cost of living - I can't blame them. The RIAA isn't any better than the "pirates" they sue, as long as they employ dubious tactics.
  • Netcraft reports, .., RIAA,..., Red ink, ;)

    It would make a great troll!
  • Hardly Surprising! (Score:5, Interesting)

    by rspress (623984) on Thursday May 13, 2004 @09:14PM (#9147058) Homepage
    Since most of the "losses" come not from file traders but from those who copy the full disc, including the liner notes and sells those on the street and even to music stores.

    The RIAA once reported one in six discs that you buy is a pirate disc. This is where they are truly losing money. However if all this contrary information were to make it to the courts that are granting the search warrants for ISP's then it would be that much hard for the RIAA to get those warrants....and that would prevent them from getting the easy money from going after file traders.

    Speaking of this easy money, has anyone seen the figures of how much the RIAA has brought in from these Nazi tactics and how much of that total was reimbursed to the artists who lost sales? Also how does the RIAA determine who has been pirated and how are the reimbursed? If someone were to bring these point up to the judge who is issuing warrants then the RIAA might really have to do something more than whine to get a warrant.
  • by DroopyStonx (683090) on Thursday May 13, 2004 @09:31PM (#9147154)
    They believe that every single pirated song was a guaranteed sale, which is not the case.

    Just because a person has 4,000 songs doesn't mean that they would've purchased ALL of those CDs had they not had the means to download them... but the RIAA stands firm in their belief that this is possible.
  • by Stephen Samuel (106962) <samuel@bcgre e n . c om> on Thursday May 13, 2004 @09:48PM (#9147276) Homepage Journal
    1. fake products -- scam artists shipping stuff to stores that RIIA membership doesn't know about -- but good enough to fool consumers (haven't heard of this running rampant).
    2. Less spoilage (shipping fewer, selling more, returning way less). Better profits all the way 'round. Works for stores, artists get more money, so does the RIAA.
    3. RIAA scam (they tell artists "140M records", but they sell 160M) -- but the RIAA wouldn't do that would they???
    Note that, in all possible circumstances, record sales are up.

    Only in (1) would the RIAA (and artists) actually get less money, but that's not the fault of the "pirate scum" 12 year olds that the RIAA insists on suing. If this is the case, then the RIAA needs to start going after the real pirates, and stop suing kids.

    For (3), The artists are getting less money, but that would be because the RIAA is scamming on both ends (cheating artists, raising prices, suing customers). It'd take a public scandal to fix that.

    • #2 is a big one (Score:3, Informative)

      by Sycraft-fu (314770)
      As others have noted, Just In Time inventory is getting real popular. Since shipping now happens quickly and you can track everything on compuer from what your supplier has, to what's on trucks, to yout warehouse to your stores, it is now feasable to have much less on hand and just replenish it more often. It is VERY popular these days since it keeps costs down (it's expensive to have shit sit on shelves).
  • by cmholm (69081) <cmholm AT mauiholm DOT org> on Thursday May 13, 2004 @10:20PM (#9147490) Homepage Journal
    As other posters have pointed out, retailers are carrying less stock than was previously mandated by the RIAA. Why? While we'd like to think this has something to do with mp3 and Kazaa, I think it's primarily due to Wal-Mart.

    Wal-Mart is renowned for forcing it's suppliers to radically revamp their operations to meet Wal-Mart's needs. Wal-Mart dictates to it's suppliers, demanding just-in-time inventory control and annual - if not quarterly - wholesale price drops. 20% of CD and DVD retail dollars now flow through Wal-Mart. With that kind of buying pull, recorded music became yet another consumer item that Wal-Mart could live without, but that couldn't live without Wal-Mart. If we go with the theory that Sam Walton's boys popped the RIAA's cherry during the buyer's renegotiations, that probably provided leverage for other retailers from Kmart to Tower Records to cut the same deal, especially during a down economy.

    I wouldn't be surprised to find that the gusto with which the music industry tries to squeeze more blood out of consumers by lobbying Washington and other capitals was in direct relation to how much of they're getting squeezed in Bentonville, AR.

  • by holy_smoke (694875) on Thursday May 13, 2004 @11:07PM (#9147791)
    on a shared cab ride 2 days ago, and we got to talking about P2P, so I slyly asked her if perhaps they had considered that "maybe DVDs, game consoles, cell phones, and gameboys may be competing for entertainment dollars?"

    "NO, Absolutely not - its P2P, the children don't understand and need to be educated. Those other explanations are nonsense." she said

    I said "hmmm, well are you sure, cause it..."

    "Yes we are absolutely sure. These P2P programs are set up to steal and kids don't realize what they are doing it wrong. Its silly and inexcusable, we need to change their attitude."

    So you see - they don't CARE to see any facts or evidence that point away from their view. They don't WANT to hear it. And this not wanting or caring will re-enforce their current behavior patterns. It will also cloud their minds such that EVERY way they approach the problem will have P2P destruction or absolute control in mind.

    What they DO understand that "war does not determine who is right, war determines who is left".
  • by 71thumper (107491) <steven.levin@interceptor.com> on Friday May 14, 2004 @12:44AM (#9148287)
    Music piracy (or whatever you'd like to call the rampant copying of music) is unrelated to the numbers. It's wrong. It's always been wrong and sitting here trying to come up with excuses is hypocritical from a group that zealously defends Open Source.

    After all:

    * No one loses the use of the original source when someone like Linksys modifies the source and doesn't release it.

    * No one loses money because a company doesn't release its changes back to the community.

    In short, if copying music is okay, then taking open source projects, modifying them, and selling them commercially without releasing the source can't possibly be bad.

    Either intellectual property means something, or it doesn't. But make sure you appreciate the ramifications before espousing the "anyone should be able to do anything" argument.

    Steve
  • by Anonymous Coward on Friday May 14, 2004 @02:35AM (#9148681)
    I have read through the posts so far, and a considerble number of the posts made on the subject before and a lot of the analogies come close, but don't hit the heart of it for me.

    Here is the way it is for me.

    Many years ago (I don't know how many - google it yourself if you're interested), Natalie Imbruglia came out with a song called Torn. I have listened to this song so many times I can almost repeat every note she sings, AND every note the rest of the band plays.

    This song ranks among my top 10 all-time favorite songs. It fucking gives me goose bumps on occasion when I listen to it, just because of the way she uses her voice. On the basis of this one song, I am ready to claim that she has a vocal talent worthy of note (even if....(see rest of post)).

    So, when all these p2p networks started springing up, I checked into them, in the interest of deciding which CD's would be worthy of MY hard earned dollars. Natalie was my first test case.

    My purpose for this was not to download mp3's (at least in the final stage). I happen to like a lot of music where even the tinniest ear can detect the difference between formats. I certainly can. My purpose (as far as Natilie was concerned) was to see if there was enough of her other stuff I liked to purchase a CD of hers. This was the first time I used a P2P network. (I get my porn elsewhere.....tttthhhhhuuuuuppppppttttt).

    Not a chance (so far..... I understand she is working on a third alblum).

    She seems to be techno-pop, a genre I'm not all that interested in, but I downloaded all of the songs off of the two released CD's I could find of her for sampling.

    Conclusion: I still think Torn may be one of the best songs ever written - as it was performed by Natalie. One of these days I will get around to seeing if she wrote it, or it was done by committee and she was only the performing artist. It doesn't really matter to me.

    BECAUSE: I found (so far at least) that this is the only song of hers I like. I don't know if the one song was in line with her normal fare and I just can't appreciate the rest of her music - or this is a fluke and the only good song she did.

    For the purpose of discussion, it doesn't really matter. What mattered to me was with the availabilty of downloadable mp3's, I SAVED at least 20 dollars because I didn't buy either of her CD's for ONE FUCKING SONG.

    I've got more than a few years in me still but I ain't exactly young. Like many, over those years I have purchased LP's, 8-tracks, and cassettes of whole alblums because there was one or two songs on it I liked.

    Those days ended long ago.

    (okay, about 1975, when I had to start earning my own money).

    In the last five years I have purchased two CD's. Alice Cooper - Welcome to My Nightmare, and Black Sabbath - We Sold our Soul for Rock and Roll. As you can see, Natalie isn't exactly my normal fare. For these two CD's I payed what I considered to be an equitable price. $7.99 and $5.99 respectively.

    So maybe the RIAA counts the two Natalie Imbruglia CD's as lost sales, because I didn't buy at that time without listening to them first. If so, well.... everyone else has expressed an opinion on this many times that pretty much coincides with mine, but maybe for different reasons.

    I don't buy ANYTHING now without listening to it first. Either I listen to it at the local library, the local Borders, or borrow it from someone I know who has it. If I don't like more than one or two songs on a CD, then there isn't a chance in hell I will buy it. If there is a song I really like, I may rip a copy of it off a friends CD, but this is not a lost sale, because I WILL NEVER BUY THE FUCKING CD AT FULL PRICE to begin with. I will wait until I can get it at the local Salvation Army for $0.25.

    And that's the way it is.

    To the RIAA: Deal with it fuckers. In the last 10 years you've managed to produce about 6 songs I like. Not exactly an exemplary sales position, is it.

"The Mets were great in 'sixty eight, The Cards were fine in 'sixty nine, But the Cubs will be heavenly in nineteen and seventy." -- Ernie Banks

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