Yet Another Look at CD Sales 286
citizenkeller writes "Dan Bricklin, of VisiCalc fame, has published a very interesting essay on "CD sales, downloading, and burning". In his own words: 'Given the slight dip in CD sales despite so many reasons for there to be a much larger drop, it seems that the effect of downloading, burning, and sharing is one of the few bright lights helping the music industry with their most loyal customers. Perhaps the real reason for some of the drop in sales was the shutdown of Napster and other crackdowns by the music industry.'"
It's the economy (Score:4, Insightful)
Re:It's the economy (Score:5, Interesting)
They also said the bad economy was a factor, and said specifically they didn't believe piracy to be having any significant effect.
Video games have a larger percieved value. (Score:3, Insightful)
Also video games have multi million dollar budgets, are in development for years. Most albums are produced with at most a couple hundred thousand dollars, and composed in only a few months. Video games are big business, and may eclipse movies (if they haven't already).
Re:Video games have a larger percieved value. (Score:2, Informative)
video game industry in 2001: $9.4 billion
Movie rental in 2001: $8.42 billion
Box Office in 2001: $8.35 billion
So even though the video game industry isn't quite up to speed with the entire movie industry, it's bigger then rentals or theatures on it's own. Not bad.
Re:Video sales? (Score:2)
Game Industry | Moview Industry | Music Industry
Arcades | Theaters | Concerts
Game Rental | Movie Rental | ????
Game Purchase | Movie Purchase | Music Purchase
Anyone care to fill in the numbers?
Re:Or maybe it's not... (Score:5, Insightful)
Re:Or maybe it's not... (Score:5, Interesting)
Arguing that since the economy cannot be the *ONLY* reason it is somehow less valid to proclaim it as such than the industry's fallacious attacks on internet piracy is a farce.
I'm sure that one or two deeply religious parents out there have forbidden their children from buying Marilyn Manson albums - does that then also mean that we can claim that "Religion is *THE* reason for the downturn in music sales", as the record industry would have if it chose to exercise a vendetta against religion next?
Re:Or maybe it's not... (Score:2)
Blaming p2p is an emotional argument, not a logical one. RIAA sees it happening, and they have an instant scapegoat. In reality, music lovers who are computer literate use p2p to expand their musical horizons effortlessly. How does this hurt the music industry in the long term? I know of teens who have developed a taste for classical chamber music because of p2p, and 40-somethings like myself who have dabbled in pop music just to catch up a bit. Neither group is likely to go out and pay $16-18 for the CDs in question without even a way to hear them (those of us without teen kids at least).
Bricklin's point that CD prices actually increased since 1996 seems more relevant. Even as prices rose, alternative and "free" ways were found to obtain the exact same music at nearly CD quality. Of course, "free" is relative; you still need hundreds of dollars worth of equipment (computers, burners, MP3 portables) to take advantage of "free" downloads, and if you do a lot of file transfers at home, you are probably paying at least $40/month for broadband access.
Maybe all these poor suffering music companies should get into the broadband business and invest in CD-ROMs, MP3 players, etc. I mean, get with the growth sector. All those leather saddle makers in 1895 switched, if they had any intelligence, to automobile upholstery. The rest ended up in the soup kitchen line. Tough luck; that's capitalism and progress.
erm... recession? (Score:3, Interesting)
Personally, I've bought many more CDs since Napster than I did beforehand, 'cause I discovered lesser known groups like Apocalyptica [apocalyptica.com] that I really enjoy listening to.
/. had that (Score:3, Interesting)
I think it's pretty clear that file trading is pretty neutral on the music industry and i join others in wonderment over the industry's heavy handed tactics to stop file trading when there is no evidence that it even might hurt their bottom lines.
Re:/. had that (Score:5, Insightful)
Now the problem with their motivation is that its not going to get congress angry with them. They must make it look like they are being hurt NOW and must take IMMEDIATE measures to stop the swappers. If they simply said "we are afraid that in the future this non-issue will become a problem" than nobody would help them.
So really I think we are int he right as swappers. This is absolute BS they are pushing because they are scared and greedy which is a bad combination.
Re:/. had that (Score:4, Interesting)
"The VCR is to the movie industry what the Boston Strangler is to a woman alone." quote from our friend Jack Valenti shows how in touch these people are with reality.
The amazing thing is that they continue to refuse to admit that they might have been wrong about anything.
"Piracy" is the excuse (Score:5, Insightful)
This is why the RIAA is perfectly willing to shoot itself in the foot in the short term (5 years). It lets them bleat about piracy while they try to get rid of that revenue-limiting buy-once play-many business model
I couldn't agree more. (Score:3, Interesting)
Pay-per-view is the holy grail for the music publishers. (not the artists, it's actually the death of art) I hope that if they ever do get this passed that there is some sort of riot, but unfortunatly it will be silently accepted like everything else.
Apathy.
Re:I couldn't agree more. (Score:2)
Ignoring this whole piracy charade, the theory explaining a drop in CD sales that I subscribe to is that DVDs are killing CD sales. Many of my friends used to buy CDs by the box load. Now they're buying DVDs at about the same rate and I can't honestly remember the last time one of them showed off a new CD.
Re:"Piracy" is the excuse (Score:2)
Re:"Piracy" is the excuse (Score:5, Insightful)
Pay per play [slashdot.org] is the future.
There is also at least one more thing going on. The recording industry has always been more interested in making ALL the money, even more so than making MORE money. There are many examples of how they could make more money, but it would have to include letting others make some of it. This is why they control all the distribution, all the marketing, hell, they even dictate to the stores HOW to sell it, and for how much. They control the radio, they control the artists, they own the songs.
Napster had brought up a whole new distribution, not just "free music". A whole new marketplace could have opened up, but they wouldn't have been in control of it. How could they live with calling themselves a monopoly with that going on?
Re:"Piracy" is the excuse (Score:2)
Re:"Piracy" is the excuse (Score:2)
Re:"Piracy" is the excuse (Score:2)
It's a bid for an oligopoly of audio content, too.
Re:"Piracy" is the excuse (Score:4, Insightful)
Which I would be perfectly fine with, if they didn't at the same time insist on shooting me in my foot, too.
Seriously, though: this article makes the point that the RIAA and its ilk stand to lose much more than a few years' market growth if they continue with their current scorched-earth tactics. To the contrary: Copy-protected CD's are a proven dud, their crippled "digital music services" are struggling for life, their current technology (by comparison with DVD's and video games) is looking more and more outdated, and their impending (crippled) formats are likely to be DOA.
What they really need is to be saved from themselves.
-Renard
Entertainment budgets (Score:2)
The basis for pay-per-use of music and movies seems to be that consumers have an unlimited entertainment budget, or that they are willing to sacrifice some other form of entertainment to be allowed to listen to the same music over and over.
I don't believe either of these to really be true. I have a set amount of money I'm willing to spend on music in a given year. I'll spend that much, and then I'll stop, because I have to budget for other expenses. Doesn't matter if I am buying unlimited-play music CDs, or pay-per-play music. Once I hit that magic dollar amount, I'm done. If I spent it on unlimited-play music CDs, I'll just keep listening to those for the rest of the year, and not get new ones. If I did pay-per-play music, I'll find other forms of entertainment.
The budget only stretches so far, and there are a lot of things competing for my entertainment dollar.
Re:Entertainment budgets (Score:2)
<paranoid>
Aha, but you won't be able to stop! And the friendly credit card companies will give you unlimited credit! (with minimum percentage monthly payments, of course) Ever heard of subcutaneous chip implants? Walk into a building where some Muzak is playing in the hall? Ka-ching! Go into the elevator, different Muzak? Ka-ching! Walk by a store where stereos and/or TV are on? Ka-ching!
I said it before and I'll say it again: everybode owes Valenti, Rosen, Gates et al aleph-infinite dollars. It's just that they haven't started collecting yet.
</paranoid>
It might be worse than that. (Score:2)
If music is too inconvenient or expensive, some people may stop buying altogether. My music buying has tapered off over the last 15 years, until the point where I went to buy a new release for $18 and decided "thats just too expensive. I don't need any more CD's" and I haven't bought a new CD for at least 2 years, maybe 3. Same thing happened with DVD's: I bought lots at $13-15 each, but now that most of them are $20 or more, I don't buy any. Well, thats not quite true, I'll probably buy the $30 FOTR Special Edition. I bought a used $15 copy of Crouching Tiger. I'd like to buy Moulon Rouge, but its $18 used, and that is just too much.
Sorry for the ramble, buy the point is that I don't think the function is linear. When THEY cross some line, purchases drop off a cliff, people change their habits, and they may not come back. I'm sure I could find that Cake album I wanted to buy so long ago for less than $18 now, but I already chose not to buy it, I'm not interested in looking for it again.
Re:"Piracy" is the excuse (Score:2)
OK, maybe Beethoven isn't necessary, but you get the idea.
Re:"Piracy" is the excuse (Score:2)
DVD Killed the CD Star (Score:3, Informative)
how about Napster not making a difference. (Score:4, Insightful)
My point is that just b/c Napsters gone does NOT mean that people are no longer able to download/burn music. That's just stupid to say that b/c it is gone there is no more desire to buy CDs.
My theory (based on my own economic situation after the stocks went to shit) is that economics have played a large role in the downturn of everything, including CDs.
Already have an Internet connection, already have a CD burner, already have P2P software, blank CDs running me about $1 a piece/average.
New CDs run me $9.99 - $17.00 depending (especially for smaller bands like I prefer to listen to, SCI, WSP, etc).
What am I going to do? I am going to download the damn MP3s or SHNs and burn them. Just like everyone else is.
Stop w/the happy horseshit.
Support freedom of music. etree [etree.org] and FurthurNET [furthurnet.com]
Buy, Rip, Sell (Score:2)
Re:Buy, Rip, Sell (Score:2)
No, they are losing buisiness because... (Score:5, Insightful)
Re:No, they are losing buisiness because... (Score:5, Insightful)
This is really it. When CDs came out, prices rose. You could buy the same music on tape cheaper than on CD, in principal because the CD cost more to make. Now, the price differential persists, even though CD production is MUCH cheaper than tapes.
Basically, the RIAA is a large trust agency that insures that all musicians release their music at comparably high prices. Every few years music gets more expensive, even though production, manufacturing, and distribution costs decrease. This is a LARGE antitrust issue that is completely unaddressed. It has gotten so bad that people will willingly illegally download music because its cost is so high relative to its value.
And that is exactly why CD sales are slumping. The cost is higher than the value to consumers. In a reasonable market in which antitrust issues are actually addressed, the RIAA would be broken up, and huge fines levied against the component companies for colluding to take billions of dollars from consumers illegally. Instead, we have Dubya.
Re:No, they are losing buisiness because... (Score:3, Insightful)
While I'm no fan of the RIAA, I find this statement pretty funny. While manufacturing costs have gone done, they are a small portion of the cost. Distribution costs have gone up. It costs more to ship things today than it did 10 years ago. That is just inflation. Production is probably the same as it was then, or possibly more expensive as equipment has gotten better. The cost of candy bars has also risen in the last 10 years, but the cost of manufacturing them has gone down, so where is the outrage? It's a simple fact that the majority of cost for a CD goes into production and marketing. And that most CDs never even make enough money to recoup what was put into them. I'm no fan of the RIAA and their tactics, but writing the whole thing off as "CDs only cost $1 to make, so they are charging way to much and deserve to have their stuff stolen" oversimplifies the whole thing to the point of being ridiculous.
Re:No, they are losing buisiness because... (Score:2)
No, they haven't. The costs of distribution have dropped nearly to zero. That's what's giving the music industry (which is principally a distribution cartel) such fits.
Remember that the Internet is a distribution medium.
Re:No, they are losing buisiness because... (Score:3, Insightful)
Production costs are now trivial, with the digital age. You no longer need to rent an enormously expensive studio to record and mix music. You can get by with very simple recording equipment and digital mixing. It is so cheap most successful artists put production studios in their homes. It is so cheap that ingenious young musicians do the entire thing in their garage, and mix it on a computer, for total production costs of about $100 (excluding their time). Marketing is the one thing the major labels can provide that is not cheap. But at to your comment that most CDs lose money, this is quite simply false. No one is going to produce CDs that lose money for long.
I am not claiming it cost $1 to make a CD (and I didn't in my prior post either). But production and distribution costs do not come close to justifying the price. Marketing costs do not either. The only justification is collusion, and that is plain and simple.
The price of a new Harry Potter DVD is about $18. The price of the soundtrack CD is about $16. Tell me there is not a mismatch between relative value and price between those two.
Re:No, they are losing buisiness because... (Score:2)
I am not claiming it cost $1 to make a CD (and I didn't in my prior post either). But production and distribution costs do not come close to justifying the price. Marketing costs do not either. The only justification is collusion, and that is plain and simple.
The price of a new Harry Potter DVD is about $18. The price of the soundtrack CD is about $16. Tell me there is not a mismatch between relative value and price between those two.
Production can be done for $100, but it will not be nearly as good. Most large bands still produce in expensive studios, because there is a quality difference. You can produce cheaply, but it won't sound as good. And most CDs (on the order of 80% of them if I remember correctly) do not make enough money to cover the production, pressing and marketing. That is why there are so many bands that only make 1 CD, the label can't afford to let them make another one if the first one didn't make money. the label has to recoup what is looses on the CDs that do make money. They don't know what will make money, so the money-makers have to make up for the chance and failure on the other bands.
As for the "free" distribution over the internet (that other people have brought up), that is an entirely different subject. When discussing the price of CDs, it's hard to say if they were an entirely different product (which distributing over the net would require) that distibution would be cheaper. That's like saying cars don't need to use as much gas as they do, just look at motorcycles, they don't use much.
As for the Harry Potter CD/DVD fiasco, the hardcover of the book is currently $13.97. Certainly the book doesn't cost nearly as much to make as a major motion picture, so why not the outcry about the price mismatch? And the audio book is $34.97! If you're going to scream collusion, shouldn't you do it for a book even moreso than the CD?
Re:No, they are losing buisiness because... (Score:2)
First, up-to-date prices. Amazon.com lists the movie DVD as $18, and the soundtrack as $14.
Now, the DVD is a superset of the soundtrack. It contains the soundtrack, the movie, additional features, and a game.
The argument was about value and price being out of whack for CDs. Would you claim the soundtrack makes up 78% of the value of the entire DVD set ? I think most people would believe the value of the soundtrack was maybe 20% or so of the DVD value. Especially for Harry Potter (I can't offhand recall any of the soundtrack being particularly notable).
Now, here is where market dynamics come in. The CD is a stable market with a monopoly on distribution and collusion amongst distributors. For DVDs, the distributors are trying to get consumers to switch from the old format (VHS) to DVDs by offering more value at competitive prices. This truly allows the consumer to see how the market forces affect the price independently of the value to the consumer.
For music CDs, it is clear the distributors are screwing their consumers.
Re:No, they are losing buisiness because... (Score:2)
Most of the time in a movie, you can hardly hear the music. You are paying more for the CD so that the actors shut the hell up and the guy putting footstep and traffic noise in stops. Perhaps that seems silly, but soundtrack fans are evidentally willing to pay for that, while movie-plot fans aren't.
Re:No, they are losing buisiness because... (Score:2)
The only thing they still do that costs money is marketting. Their prices are high because of all the dollars they poured into the next *nSync knockoff.
Call me crazy, but I have no sympathy for that kind of mistake. I don't want to pay for that when I buy my new Radiohead album.
Re:No, they are losing buisiness because... (Score:2)
If by 'marketing' you mean 'payola' then you're absolutely right.
Re:No, they are losing buisiness because... (Score:3, Interesting)
True. But so is "Buying legislation to continue the stranglehold our monopoly has enjoyed for decades"
Face it. The recording industry believes it is their god-given right to make profits. Even in a recession. Note that they didn't lose money last year...they simply didn't make the same increase in profits.
If all P2P was shut down tomorrow, I have a feeling that we would see a decline in music sales anyway. That is all this article is trying to say. Actually it went a step further saying that the losses would have been even more.
Re:No, they are losing buisiness because... (Score:2)
Instead, we have Dubya
This pretty much destroys any credibility your statement had. To blame this situation on "Dubya" is silly. The RIAA's monopoly ran entirely unchecked through the Clinton years, as well as through "Dubya's" dad's term. There is certainly room to dislike the current administration, but labeling longstanding problems on the sitting president makes no sense.
Before you go bashing George W. Bush, keep in mind whose signature is on the DMCA.
seeking scientific or even allegorical proof (Score:2)
It's difficult to argue with such common sense. However, while I can cite dozens of companies that excel due to their excellent regard for customers, I can't recall any significant company that has genuinely lost business due to its poor treatment of customers. Corporate leaders know monopolies or otherwise gargantuan enterprises are largely immune to even the most scathing customer opinion.
Please, prove me wrong!
Re:seeking scientific or even allegorical proof (Score:2, Insightful)
I can only speak for myself, but I much prefer to give my hard-earned dollars to companies that, at the very least, dont "treat me like shit". However, this usually occurs on a very small scale. For instance, this month I am not renewing my agreement with Sprint as a cell-phone service and instead am switching to AT&T because Sprint screwed me on a rebate. When I call up to cancel I will tell them as much if they bother to ask.
I know it sounds corny, but I encourage everyone to take responsibility for their purchases... Consider each one a small vote. When you get pissed off with a company, make the effort to move to a different one if possible. Even better, let the company know why they have lost your business. In a free market you should rarely if ever have to give a single cent to a company you do not like.
Re:seeking scientific or even allegorical proof (Score:2)
Re:No, they are losing buisiness because... (Score:2)
The record labels are stupid. (Score:2)
Re:The record labels are stupid. (Score:2, Informative)
They do. KaZaA returns paid results on a number of searches (look for gold icons instead of white). While some of it is porn-site samplers, there is also a good bit of new-artist music as well, including some from mid-sized labels like Maverick Records (Madonna's label).
This is a just one of many examples of the industry's desire to have their cake, and eat it (and yours) too. Witness: Sony Music threatening all-out cyberwar against MP3-traders, while Sony Electronics is busy selling portable MP3 players; RIAA demanding that Congress give them carte blanche to hack suspected pirates computers as vigilante justice and calling their customers thieves, while simultaneously being whiny-babies about their own servers being knocked offline by vigilante "hacktivists" and trying to engineer ever-more-heinous means to deny payment to the artists they allege to be protecting.
An analogy (sort of) (Score:3, Insightful)
So I could either increase the price of my white bread, to compensate for the lack of additional sales. But that's a dangerous route to take, because for every price increase, I'm going to probably lose customers (either to another bakery, or to people who just decide to bake at home).
If I wanted the government to mandate that people can only buy white bread, or only from me, or that other bakeries pay me a $0.05 for every loaf they sell, or that consumers pay me a $10.00 levy when they purchase a new oven
The right choice would also expand my product line. and sell other types of bread. Of course, this too will reach a limit. But as long as I sell a variety of products, at reasonable prices, I should make enough money to cover my expenses and be happy.
Right?
Re:An analogy (sort of) (Score:5, Insightful)
ObHeinlein:
Re:An analogy (sort of) (Score:2)
The quote is from the Judge in the trial.
Re:An analogy (sort of) (Score:2)
This is exactly the plan the MPAA had [tucsoncitizen.com] this year. Less movie ticket sales and higher ticket prices. Gee I wonder if the less ticket sales was from Napster too. I wonder how much more sales would have been without the increase. You just need to find that fine balance. The RIAA has not and they are blaming it on something else. HINT: Maybe its the economy stupid!!
Re:An analogy (sort of) (Score:2)
You are right, unless have a monopoly on the bread distribution channels, then you can charge anything that you want, feed us just white bread (and we better like it) and not fear that you will lose any customers. Your the only game in town... why worry about what the customer wants.
The report seems accurate in many ways (Score:2)
Particularly interesting was the 7% rise in CD prices in a time of economic decline. I'm not usually a conspiracy theorist, but it seems to me that a choice to raise prices on a discressionary product such as CDs might be made simply to spur the decline we've seen here. The raw data certainly provides amunition for the RIAA and company, without resulting in a significant reduction in revenues.
--CTH
corporate suicide... (Score:3, Interesting)
Add to that problem the fact that most music the recording companies are releasing (esp. the stuff they really push) all sounds the same. Either you get copy cats, really is there that much difference between the many "look at my navel" bimbos out there??? Or you get stuck with a group that had a hit album once so all their later albums try to sound just like their one good album. Even if you find a group you can enjoy and listen to, usually you're stuck paying $20 for their CD which has maybe 2 good songs and the rest is crap...
Of course, given alternatives, people are going to find other ways to get their music of choice.
Of course... (Score:2, Insightful)
I'm not saying there isn't good music out there but the only new music that gets any attention is typically the latest boy-band or a fresh piece of lip-synching-jail-bait and that is simply not the material I want to part with my money for.
How about.. (Score:5, Interesting)
Buy indie music from labels who have nothing to do with the helldemons. Check out text file I have attached below.
List of Record Labels that feed RIAA [kinnetica.com]
Everytime you buy a CD that's on that record label listed, you directly finance the people who turn around and take away your fair use rights and civil liberties.
Think about that for a while. As for the Dropping CD Sales, all I have to say is:
The laptop sales are also dropping. I guess it could be attributed to the widespread online hardware piracy via Lapster
Only buy independent (Score:4, Interesting)
Convenient way to buy independent CDs, without giving any of your money to the RIAA: CD Baby [cdbaby.com]
They even let you pass a message to the artist for every CD purchased. Plus I love the line on the "about" page: "No Microsoft products were used in the creation of this website."
mp3.com was bought out (Score:3, Informative)
Most of my favorite mp3.com artists stopped posting new material after the contract change.
So, no, mp3.com is not an indy option. Sorry.
My $.02 (Score:2, Interesting)
Would I buy stuff from major label bands? Sure if they had anything worth listening to.
Nice Data, Interesting Thoughts, Bogus Conclusions (Score:3, Interesting)
Where the article begins to fall down is when the author begins to speculate without hard data such as his belief that cell phone usage adversely affects music sales. It completely falls down when he counters the very data with the following quote So since burning and downloading didn't cause a sizeable dip in sales it must have caused an increase instead? This conclusion is incorrect and quite illogical.
The author also seems to imply that shutting down Napster reduced the degree of copyright infringement but this seems unlikely given the number of P2P services that sprang up in its stead from Kazaa to Audiogalaxy to Gnutella.
BOTTOM LINE: The article correctly points out that the claims of the music industry of the costs of copyright infringement are exaggerated but falls down by claiming that copyright infringement fuels sales without anything more than a gut feeling to back this up.
Re:Nice Data, Interesting Thoughts, Bogus Conclusi (Score:2)
Seems? You go on to chastize the author for concluding something from a gut feeling, yet you did the exact same thing in the above quote. Many other services may have sprung up, but unless you have usage statistics, you're assuming that the total amount of burning and sharing has risen. Unless you can prove that, you're coming to conclusions in the same presumptuous manner the author has.
Asides, probably redering even my assertion moot, the part you quote from the article has the world Perhaps in it. Its no use attacking conclusions to which the author has already correctly prefixed with a qualifier
US consumers repressed by stupid corporations (Score:2)
So, in summary, the trend of several recent articles:
Long term plan for pay per use, my ass. They're selling less and less. If they make it more expensive, and even worse quality (well, that's far-fetched, ok), people will buy even less no matter what the method of paying for it.
It was fun... (Score:5, Funny)
I bought my last CD 1 year ago... (Score:3, Interesting)
I hoped at one point the RIAA companies would get the message. Instead my small boycott has been spun into more ammunition to be used against me.
Speaking as a part time, small volume, music sharer. I bought more music two years ago then I have in a long time and I KNOW for a fact the Napster helped fuel my desire for music.
Go figure.
-Derek
Look at the figures (Score:2)
The figures went something like this.
Shipments dropped by 10%
$ales dropped by 8%
So it looks like they put the price up.
The report said
Shipments where 10million last year and only 9 million this year down 1 million
Taking where $10million last year and $9.5 million this year (down $0.5 million)
My Opinion(s) (Score:2, Insightful)
CD sales are slumping because a lot of things in the economy are slumping. I don't listen to commercial radio much since I don't like commercials and I can't stand listening to the morning DJ's, so, aside from MP3 swapping, I hear most new music by occasionally (and vainly) trying to watch videos on MTV/VH1 (don't have MTV2). Maybe CD sales are slumping since the music video channels don't show videos anymore.
Next, I find it annoying that most record store chains have higher prices than discount stores. I know it is a chicken and egg problem based on supply and demand, but I'm talking about nationwide chains, in every mall in America. This goes for movies, too. Why would I go to Suncoast and pay $5 more for a movie?
Finally, if a CD of ~12 songs costs ~$12 and I can obviously rip it as soon as I get it, why can't I just go to the record companies site and buy the MP3 for a song for $1? I would pay, they would get a lot more money per song, and I would be no more or no less likely to share the song as I would if I bought the CD (except that I might not bother buying the CD if I only wanted one song and my buddy has it).
It's the music, stupid (Score:5, Informative)
As proof of this, let's look at the top 20 selling albums of all time as an example:
1. Eagles: Greatest Hits
2. Michael Jackson: Thriller
3. Pink Floyd: The Wall
4. Led Zeppelin IV
5. Billy Joel: Greatest Hits
6. AC/DC: Back in Black
7.Shania Twain: Come on Over
8.Beatles: White Album
9.Fleetwood Mac: Rumours
10.The Bodyguard Motion Picture Soundtrack
11.Boston: Boston
12.Alanis Morissette: Jagged Little Pill
13.Garth Brooks: No Fences
14.Hootie and the Blowfish: Cracked Rear View
15.Eagles: Hotel California
16.Beatles: Beatles
17.Bruce Springsteen: Born in the USA
18.Pink Floyd: Dark Side of the Moon
19.Guns N Roses: Appetite For Destruction
20.Elton John: Greatest Hits
The list is a little rock-heavy, but look at the difference bewteen the bands. There's a huge variety of musical styles here. In other words, the exact opposite of what's being sold now. Listening to the same carbon copy crap is boring, and the opposite of entertaining. Until the RIAA and the record companies start releasing albums from artists who are willing to experiment musically, then sales will not increase.
Personally, the last CD's I purchased were Ozzy Osbourne: Live at Budokan (and the remaster / reissues he's released this year), and Black Sabbath's Past Lives. I doubt I buy any more CD's this year.
Re:It's the music, stupid (Score:3, Insightful)
The industry puts out a wide range of music, just b/c sales are up on N'SYNC and Brittany doesn't mean that the other bands don't exist.
People like to listen to poppy shit. I am glad the 80's are dead for that exact reason. The largest group buying records are teenagers. They are the ones fueling this shit and ignoring what some of us consider good.
What do I know though, I listen to the Grateful Dead and String Cheese Incident. I'm just a weirdo.
Re:It's the music, stupid (Score:3, Insightful)
Re:It's the music, stupid (Score:2)
Another reason they might be losing sales... (Score:2, Insightful)
If the industry spent more time developing more artists, like playing something on the radio other than the same 20 songs 12 times a day, other artists could be heard and therefore they'd actually sell more cds.
Unfortunately these idiots have been using the same formula forever, and making good money doing it. I personally hope they dont catch on, as I think there is an opportunity for the artists to make more money themselves, and for the public to hear better music and more of it if these sluggish record companies are forced out of the way.
Maybe some day soon I'll be able to actually turn the radio back on.
Accuracy (Score:2, Insightful)
1) I buy fewer cds
2) I haven't bought a bad cd.
So, in my case the reason for my decline in purchases isn't because I'm listening to it for free, it's because I have the resources to know more about what it is I'm buying. Before, I'd hear a song on the radio, I'd like it, buy the cd, and hate the other 12 songs, and that cd would go to the boneyard because I just can't switch cds in my car every 5 minutes. Now, I hear a song, like it, download more songs by that artist, and if I don't like what I hear... I don't buy the cd that I otherwise may have.
So yes... in my opinion... digital music sharing decreases sales... but not because we're stealing from the record companies, but because we are more educated about the product they are selling. We're now able to open the hood of that "used car" that we're looking into and see if there's a birds nest in the carbuerator.
Which reminds me... why aren't the bands complaining like RIAA? Oh yeah... because they aren't seeing this money anyway. Maybe there's deeper evils at work??
I urge musicians to produce and sell their own cds. Only then will we truly be able to support them by buying a cd.
To sum it up (Score:2, Interesting)
Simple reason (Score:2)
CD with 2 halfway decent tracks and alot of filler garbage = $19.99
Math looks pretty simple to me if all I have is a spare $20
Re:Simple reason (Score:2)
CONECPT: Analog music purchase scale, not digital. (Score:5, Insightful)
This article makes a little inroads in the direction, but I want to point out that just like music downloaders are in various categories, you have a whole continuum of music PURCHASERS. And it isn't a descrete category that people fall into... it is a continuum.
On one side, you have the people who compulsively buy buy buy everything music. On the other side, you have people who don't buy any music at all. In between, there are all sorts of levels of music purchase. And somewhere in between, is the "sweet spot" of consumers which can be swayed one direction or another to buy or not buy CDs.
Now, you have a disruptive technology like online music distribution. Some people like it for the convenience. Some people like it for the cost. Whatever. It doesn't matter except that in most cases, it slightly pushes them down the continuum towards not being as big of a music purchaser. (However, yes, there are counter-trends, like someone getting more excited about music and finding a new favorite group, and supporting them.)
But whenever someone downloads music, in general terms, it pushes them down the continuum towards being a non-purchaser. The effect on an individual level is probably quite small, and difficult to measure. However, when aggregated across a large population, the impact is dramatic.
I think the problem with surveys of how downloading CDs have affected music purchasing decisions is that it is too focused on the individual level. From their point of view, their behavior may not have changed significantly. Or they may not be aware of any change. But a slight change has occured.
That slight change is enough to push some people out of the sweet spot and into becoming a non-purchaser. Or the aggregate of a large number of people sliding down the continuum has an affect on sales figures.
So, this is the basic guts of the theory that I have when it comes to online music downloading vs consumer purchasing.
Comments? Questions? Criticisms?
Re:CONECPT: Analog music purchase scale, not digit (Score:2)
NOT TRUE. Free MP3's/Ogg's are NOT the same as free CD's. Think about that for a moment. Even when/if you burn it onto a blank, it is STILL NOT A CD like the one sold at Tower or Amazon. What people are downloading from P2P networks, and copying from their friends' burned disks, may be many things, but it is not identical to the product as sold at retail music outlets. In particular, the free stuff is of lower sound quality, takes greater time and effort to procure, and comes without art, images, lyrics, and the feel-goodness of fandom, supporting the artist, etc. (which has economic value).
You acknowledge that "there are counter trends" but it's not clear at all that the sense of the effect is as you describe. On the contrary, music labels pay enormous sums of money to advertise their product, and one thing free online music most certainly is is free advertising - advertising whose tab is picked up entirely by the consumer - advertising that doesn't cost the labels a penny. How often have you (in your entire lifetime!) purchased a CD that you had not previously listened to in any way?
If the sum total of the effects of free online music (which is unknown, present article and its conjectures notwithstanding) is to decrease CD sales, then it is because the marginal utility of the actual CD product, 44.1kHz 16 bit, liner notes, fan sentiment, and all, over that provided by the free online music, has been judged in the marketplace to not be worth its sticker price - to the extent that this effect has overcome the demand stimulation provided by the free advertising that online music also provides.
Personally, I buy CD's, but only CD's that I know, and only second-hand or at discount. That's what it's worth to me, and that's what I pay.
-Renard
Re:CONECPT: Analog music purchase scale, not digit (Score:2)
Myself, I'm interested in the music itself. Not the benefits of having a large CD collection. Or hyper-fidelity of the sound. In my case, having a random and immediate access to of 100s of songs on my hard drive beats the hell out of a pile of CDs.
But I think the point I was trying to make is that, to a small degree, it displaces the actual purchase of music. If someone "might" have purchased something, they may be more content to do without if they have an electronic copy. (Or they already have a good selection of downloaded music and feel less of a need to add more to their library.)
You do, however, raise some good points. Personally, I only buy a cassette (now CD) if I really really like a musical group. I think my purchases average 1 per year. But come to think of it, I think I've slipped down to no CD purchases at all anymore. I'll be damned if I put that on a survey, though.
Re:CONECPT: Analog music purchase scale, not digit (Score:2)
(preface: never take a personal testimonial as signifying any trend)
For me, it's exactly the opposite. I will not purchase a CD that I haven't heard at least 2-3 tracks of - usually from downloading mp3s (since the sort of music I most often buy is rare to non-existent on the radio). So it in no way displaces an actual purchase for me - it's a necessary step in the decision to purchase.
On another note, I agree wholeheartedly that looking at the continuum of music-buying and downloading behaviour is important. The best way of finding the true trends is to not bias yourself to only look at differences between preconceived classes.
[TMB]
Re:CONECPT: Analog music purchase scale, not digit (Score:2)
Yeah that's a really good point, and something I thought of after posting. IMHO it only goes to show the extreme nature of the tragedy the RIAA and its members are fomenting here - if they were to allow unencumbered downloading, for a price, they might well be able to charge more than they charge now for CD's (greater functionality). In any case it seems like the margins would be a lot better.
But I think the point I was trying to make is that, to a small degree, it displaces the actual purchase of music.
And the point I was trying to make is that it ain't necessarily so. Free music is free advertising, and just because you buy fewer CD's now, and also listen to a lot of downloaded music, doesn't mean that there aren't other factors in play that have a greater effect. Absent those other factors, you might be purchasing more CDs because of online music. Causality can be a tricky thing.
Other factors that may be playing a role: the recession; increasing CD prices; availability of DVD's, video games, and cellphones; RIAA strongarm tactics; overall poorer quality of music (if such is the case); poor selection of radio stations (Clearchannel); even, lack of access to more/different online music (Napster effect)!
My point is not that online music isn't hurting CD sales, or couldn't possibly - just that one thing we know for certain about online music is that in its function as advertising, it is guaranteed to be stimulating CD sales, and that it's an unsolved question whether the sum total effect is positive or negative.
-Renard
It's a vicious cycle, too (Score:5, Interesting)
First, the most important hard number that matters: 13%. This is the percentage by which record sales (as measured by SoundScan) are down this year over the same time last year. That's a HUNK. Study after study has failed to demonstrate that downloading either is or is not responsible for this dip. It ain't the only thing, IMHO.
Among other things, this bust comes at the end of a decades-long boom period for the record industry, and like so many other businesses, labels have spent the last few years riding a bubble. Unsurprisingly, the bubble has burst. We all know that selling records is a low-margin business that usually loses money (SERIOUSLY. NOT KIDDING.). If a larger label makes a killing it is probably on a runaway hit that sells hundreds of thousands, or millions, not ten thousand or less like the vast majority of releases do. Most labels lose money most of the time, and the ones that steadily make money generally do so on a scale that doesn't even register on the radar of the major-label wonks.
So what do we have? We have: four major labels, owned by conglomerates who wish to use the Beatles/Dylan/Zeppelin/Stooges/Clash catalogs to cross-promote their products, and to finance other ventures. These conglomerates have little patience or interest in sinking money into new artists who will lose money for years at a time.
We have Best Buy, Circuit City, etc. selling discs for LESS than WHOLESALE, to the point where small record stores are buying their stock on the sly FROM THESE STORES instead of from the labels themselves.
We have an environment where, in the last year, TWO of the largest distributors have gone out of business (That's like WB Films and Paramount going tits-up), and TWO of the largest retailers-- Virgin and the Musicland family of stores.
We have radio AND touring in the hands of basically ONE company.
We have declining fan interest in the lastest dead horse trotted out by U2, Britney Spears, String, and the N'Backstreet Boys.
All this adds up, not to downloading killing the industry, but the industry starting to feel the effects of too many boardroom ultimatums and short-term decisions.
13% of sales have gone PFFT. It's a market correction, and a lamentable one, that the conglomerates that own the majors have precipitated themselves. Janis Ian is right-- the future is with people selling their own records out of the backs of cars, and this just might be the real start of that.
Re:It's a vicious cycle, too (Score:2)
I mean, in a few years will ownership of a non-DRM-crippled PC be grounds for assumption of lawbreaking?
Re:It's a vicious cycle, too (Score:3, Informative)
Next point. The costs are not vicious to record an album. $100,000 is not too bad. What kills you is the half a million it takes to work a record at rock radio (yes, $500,000-- some of which goes to listener giveaways, etc etc etc but most of which lines various pockets in the Clear Channel hierarchy and in the independent promotion worlds (independent promoters are the people who make the phone calls that you don't have time to, or can get people on the phone that you can't. They cost.)). If you want a hit, you pay. If you can't afford it, you don't, and try to get exposure through non-comm radio, touring, and word-of-mouth.
What also kills you is the $4 to $15 in advertising costs PER UNIT-- PER UNIT-- that it can take to get sufficient visibility to break a band. This includes print advertising, price & positioning at retailers, co-op advertising (where you split the cost with a retailer), etc. It costs $20-30,000 to get a full page ad in the New York Times sunday magazine. Rolling Stone STARTS at $50,000 for a little ad. Even the smaller magazines like CMJ, Mother Jones, Magnet, cost something, usually between $1000 and $10000 per ad.
It's these costs that add up. As mentioned, costs run away. I've seen an album come out, ship 30,000 units, and then 20,000 of those come back 90 days later as returns, all the while supported by $30 per unit-- PER UNIT--- in advertising. To a point, this is a cost labels are willing to absorb because eventually, on the 2nd or 3rd or 4th album, all these costs will amortize when an album breaks, but this is an example of costs getting horribly out of control. Which can happen easily, and does happen often. This is where labels lose money.
One final note. Artists retain labels to do the work they can't-- get marketing, provide tour support, front the money for recording, secure visas for international travel, set up press junkets, get radio play. The label uses their money to do this with. Therefore, it's only natural that the label make their money back before the artist gets their cut (with the exception of certain things like sync licenses which go straight to the artist- a good thing). It's why labels exist-- to expose themselves to risk in the expectation of furthering an artist's career. I am in it to make great music famous, and so are a heap of other people. Just because a label pays its "union dues" to the RIAA does not make them evil. It makes them just like an auto worker who is in the UAW or a teacher in the NEA. Buy independent, forget the majors, and remember, music is everything.
Wow. (Score:2)
At this point, the argument's getting ridiculous. Everyone's made up their minds, and no new evidence has been presented. (Every time a study is made, it's praised by the group that agrees with the conclusion and lambasted by the one that doesn't.)
Nobody likes to realize that is being manipulated (Score:2)
That's obvious, nobody likes to realize that has being manipulated for years. And that's what RIAA is showing us, even if statistics shows that CD sales increased due to the Napster Network influence they smashed Napster just like we do to a bug.
But why? Because they want to control whatever we'll listen. They want us to think we choose what we like (which now we know it was not just that way).
By controling the distribution medium they can control whatever is avaiable to the masses and avoid unawanted content to become highly avaiable.
Now we have realized what was happening and avoiding being manipulated (although I still believe that many of my likes and dislikes are still manipulated). That's why networks such as Kazaa, Morpheus, Gnutella aren't bigger just because they still can't live in a pacific and compatible way.
Re:Nobody likes to realize that is being manipulat (Score:2)
Do statistics (Score:2)
It's their monopoly the labels want to maintain. (Score:2)
Just imagine a future where artists don't need to sign with a label to make it big. This is the future the internet enables, and the future the labels want to kill.
The labels are smart. There greatest fear isn't the loss of sales, it's that the industry will someday no longer need them.
Re:It's their monopoly the labels want to maintain (Score:2)
A: advertising revenue, and the people who control it. Frex if you don't need radio, radio doesn't advertising or payola, and another whole class of leeches is out of a job.
Here's why CD slaes are falling. (Score:2)
Betcha the band doesn't see a cent of that extra four bucks...
Late (Score:3, Insightful)
Fast forward to Napster and AG. I am really able to give the music a proper test drive -- hence I find a new band that makes the hair on my arm stand up -- I rush to the record store to purchase said CD. Rinse, Repeat. Hell, from my point of view -- the record companies should have been paying Napster and AG rather than suing them. (Maybe the radio stations would have gone broke...)
Fast forward to Post-Napster, Post-AG...(never used Kazzaa (I don't have a windows machine -- they don't have a linux client) -- I have played the dangerous game of trying to decide what bands to buy based on a carefully placed track on the bands website -- or maybe a low quality snippet or two elsewere. I am about 2 for 20 again...Right back to where I last left off.
here's a buisness model for some goofball (Score:2)
One. Sell music tapes at standard media distribution rates.
Two. For a one dollar fee, sell a backup of the tape. After all, tape is a fragile medium, right? Who'd want a tape without a backup? Oh, and our backup medium of choice will be... burned CDs. Easy to use for everyone.
Result: You get to sell CDs for the cost of tapes plus a buck, undercutting the entire industry. But you're not selling the CDs - you're selling the tape, plus a small service. You'd just have a music store full of tapes and burn the CDs at the counter, where you provide your custom backup service.
One factor (Score:2)
Hello!!! The economy!! (Score:2)
Every other industry is blaming their troubles right now on the reduce consumer/business spending, why doesn't the music industry?
It seems obvious to me. Layoffs, salary cuts, etc... mean less discretionary income to spend on stuff like music.
Why is this so hard???
Further examples of RIAA misusing statistics (Score:3, Insightful)
So if I rip a CD I'm lumped into the same catagory as those who download copywrited music? Every time I buy a CD the first thing I do is to rip it so I can listen to it on my computer while my CDRom is being used as a CDRom, not a CD Player. Nothing about ripping music I already paid for is against the law.
"If just half of the blank discs sold in 2001 were used to copy music, that would mean that the number of burned music CDs worldwide is about the same as the number of CDs sold at retail."
That is a statement with absolutly no statistical backbone. I just said that I rip every CD I buy. I then make my own CD's with my own mix of music. Once again, nothing illegal. And yet the RIAA wants to use that statistic to show that I'm a "pirate".
"...over 50 percent of those music fans that have downloaded music for free have made copies of it.
Yep, and I'm part of that 50%. But I still didn't break the law because I downloaded the songs legaly from Amazon.com or epitonic .com or any number of artist websites that give away free music. Once again the RIAA lumps legal behavior in with illegal behavior in an attempt to boost their statistics. I don't have a single illegal mp3 on my computer, but once again, I'm lumped in with the "pirates".
While Bricklin missed pointing out these statistical errors at least he did point out some other significant points:
- CD prices have gone up significantly.
- Radio and MTV are presenting a narrower selection of music.
The obvious answer there is to support college radio and internet radio. Present more choices to the customer and they'll buy more. And yet the RIAA is killing both!Unfortunatly, in this country rather than letting an absolete industry die a well deserved death we'll probably prop it up with more unconstitutional laws and continue to prosecute the industry's most faithful consumers as prirates. The record industry keeps shooting itself in the foot and then blames it's customers for making it pull the trigger. It's pathetic.
If just 50%... (Score:2)
So...if the average of the most fanatic group was listed at around 10 CDs per year then to reach 50% usage for music I alone am offsetting 60 fans who burn a copy of every album they buy. My former company is offsetting hundreds more.
But wait, I rip/burn music at home to listen on my Rio CD/MP3 player. My base MP3 collection is about 5-6 discs. As I buy new music I often rip it and then reorganize my MP3 cd collection to reflect new stuff I like and to eliminate the stuff I've discovered I don't like. I burn new discs and destroy the old ones (cds in microwaves are fun). So while I may be "using dozens of CDs for burning music" (all of which I have purchased and for which I still have the original CDs I might note), it's just the same stuff being reorganized over and over.
But why am I wasting my breath - it's just a hypothetical number they invented to try to prove a point anyway - it seems to have no basis in either fact nor result.
Modern Music is (very closely related to) CRAP!!! (Score:2)
I'm tired of Britney, I'm tired of the Boy Bands, the Crap-Rap artists and the average bullshit you hear on the radio. Is the radio playing it because its popular? Or is the music popular because the radio is playing it? I believe the RIAA (rather, the companies under its blanket) select a few artists to fully promote, and the cutting-edge bands tend to get left in the dust.
Anyhow...that's a whole different argument. My point here is that the dip in CD sales can easily be associated with a whole lot of things. But it's one of those cause/effect issues. What causes what? Did napster cause the dips in sales? Or are there people out there that only like one or two songs from an album (the rest being crap), and they resort to programs like Napster to get what they want? Or they borrow and rip from friends. What about the lesser known artists? Maybe the CDs are harder to get ahold of, and much easier to get via digital means.
We can make broad sweeping statements about what is happening in the music industry all we want. There are so many things that can easily change CD sales. Would it really hurt the industry THAT much to experiment with some online distribution methods? I would gladly pay a dollar or two to download a tune from any artist if I liked the tune. Or is that not legit in the eyes of the RIAA?
I am reminded of an article in Mad Magazine... (Score:2, Funny)
"The music industry charges $18 dollars for a CD...
So true....Maybe if the RIAA would stop listening to themselves talk and actually look at some of these reports, they might change their mind...wait...sorry, I was having a case of wishful thinking.
Flawed refutation (Score:3, Insightful)
Today, pretty much the only people who are offline are older people who are afraid of/unable to learn the "new" technology.
You then follow this up with:
I highly doubt these people buy many CDs; hell, they may not even own a CD player.
Of course his statistics show that these people don't buy many CD's (thus the 54% of population and only 39% of sales).
Finally, you throw in:
As for the nonusers, this splits into two main groups the way I see it: younger people who are against piracy and older people who don't use their computer for much more than web browsing and email.
Convenient grouping. Care to back it up with any statistics or facts? I'm a P2P non-user yet I'm an IT professional with multiple computers and a broadband connection at home. I'm against piracy, but I don't classify P2P as piracy.
So, after all of this inanities you then trot out the following:
Ultimately, I think the only relevant numbers would be if you could figure out the statistics for Nonusers, Dabblers, Learners, and Lovers between the ages of 13 and 25 or so and their CD purchasing habits because these are the users who make up the statistically significant number of music downloaders and purchasers.
OK, fine. Let's control for that. By your figuring the percentage of users in that group should be *MUCH* higher. So, since these people make up a significant portion of total CD sales, then a drop in CD purchases because of P2P usage would also be *MUCH* higher.
If the 13-25 group represented 75% of sales and out of that group you had 75% of the P2P learners and lovers then say a 50% drop in purchases from this group would be manifested as a greater spike in total sales losses.
Again, no matter how you slice it, the numbers just don't add up. (Controlling for age groups is irrelevant as this study is about overall CD sales.)