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After 2005, RIAA gets it totally wrong again

Written by James Delahunty (Google+) @ 03 Jan 2006 11:54 User comments (31)

After 2005, RIAA gets it totally wrong again Now that 2005 has come to an end, major music labels can assess their sales over the past 12 months. To the annoyance of the Recording Industry Association of America (RIAA), music CD sales in the U.S. dropped by about 3.5% according to Nielsen Soundscan. CD sales had risen by 2.3% in 2004 and the music companies were quick to applaud their anti-piracy efforts and gave those efforts full credibility for the rise in CD sales. However, now faced with a 3.5% drop, the same companies are blaming piracy all over again.
However, looking back over the past year, the collective anti-piracy efforts of both the music and movie industries on the Internet reached a whole new level of toughness. Specifically, the entertainment industry has the U.S. Supreme Court Grokster ruling under it's belt, which then led to many P2P services disappearing or changing completely. Now add on the 7,000+ lawsuits from the RIAA against P2P users and the Australian Kazaa case; it was a good year for anti-piracy efforts (from the music industry's usual point of view).

So that brings us to a question; if the music industry cited the 2004 anti-piracy efforts for the rise of music sales, then why were their anti-piracy efforts ineffective in 2005? Perhaps the answer is simply that the RIAA was wrong in 2004? One thing that is easily forgotten by music companies is that economical changes affect sales all around the world - sometimes people have less or more money to spend on music. Then you must remember that technology advances lead to new "must have" products every year that consumers buy up, leaving them with less money to spend on music. Then, there is also another factor; maybe less people were really interested in the music selection major labels provided in 2004.

It seems the the major music labels of the world believe that all their customers have the same amount of money each year and spend it on the same things. New gadgets like Sony's PlayStation Portable and new iPods (and other MP3 players) in 2005 were purchased with many consumers' spare cash, leaving them less money to spend on music. Also, take into account some of the recent natural disasters in the world, such as the December 2004 Asian tsunami disaster which saw many people donating large amounts of money in early 2005 to help out. There are countless things that are not music-related that could have contributed to the drop in CD sales.

Legal music downloads have also grown in popularity. Many consumers now have turned from buying CDs and instead just pay for single downloads instead of full albums on CD. Does piracy affect music sales? Of course it does but can it be solely blamed for CD sales drops in 2005? That's very doubtful. It is probably just easier for the music companies to blame piracy (particularly file sharing piracy) for drops in CD sales than to accept that some consumers were less interested in music in 2005 for example.

Source:
The Register

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31 user comments

13.1.2006 12:57

they´re just looking for a reason, and i would add to the comments, how many itunes where sold in 2004? and how many where sold in 2005? knowing that is the same people who buys cds and itunes, if itunes service grew a 50% for example and cd sales drop by 3% isnt it still a grouth in earnings? its like if they were saying right now, in 2005 VHS Movies dropped in 5% its bercause of piracy!!! nothing to do with dvd sales growing 70% this year

23.1.2006 13:11

It's all easy to understand if you use their logic. CD growth in sales = anti-piracy efforts working. We can sue more people. CD slump in sales = piracy is still out of control. We can sue more people. This is the way I see it: -CD music if filled with crap artists and over inflated prices. -Growth of p2p CD growth in sales = anti-piracy efforts working. RIAA can sue more people. CD slump in sales = piracy is still out of control. RIAA can sue more people. -Death of p2p (heaven forbid) -CD music if filled with crap artists and over inflated prices.

33.1.2006 14:53

i would think record sales probably havent dropped as drastically as these record companies fear... i know i still buy my music... and everytime i go to record stores.. theyre still packed... i think overall downloading through p2p doesnt really take any more or less money period... people still buy just as much music as they would normally... its just now people are listening to more music then ever before and experimenting with different genra's and albums and artist... i think overall this accually could be good for record companies.. cause p2p overall gives the consumer a better idea of what they really want.. i know for me it has.. and ive accually bought more music today then i have ever before cause of it... now that i know whats out there.. thanks to past p2p use not everyone downloads ever ounce of music they own.... only broke people do... and those broke people never bought cd's in the first place. am i making any sense here?????

43.1.2006 15:40

@mrbungle8, i can understand what you are saying, but the recording industry has already denounced consumer's claims of sampling music before possible purchase using P2P. On the other side of the fence, P2P enthusiasts such as yourself like to remind the RIAA that "actually we still buy our music". You use P2P as a sort of radio station you have complete control over. As for people who download music and simply don't buy it at all, I'd assume the majority of them are children. Let's be honest, young kids who rely on their parents generousity to get music probably don't have quite a big collection of music. Therefore when exposed to P2P, they would probably go crazy sharing music. I personally think music is just too expensive for children and teenagers. Thats why a whole generation of kids recorded their music from radio stations onto cassette tapes, recorded music from their friends cassette tapes etc. It was the "music file sharing" of the day. The music industry then also warned that this piracy was going to destroy the industry, it didn't. Will P2P networks destroy the music industry? no. You see, what you have to remember is, these companies who complain about P2P, represent just a tiny amount of music in this world. Most people who visit these forums can give names of musicians and singers they know. However, these companies control a large portion of mainstream music distribution. They have set up a multi-billion dollar business model out of music and do actually have probably too much control over music as a whole. Some radio stations play only major label music and nothing else. But what if it did change.... What if, somehow P2P destroyed the business model and it was quite clear that the world came to a belief that music is "free". With the major labels "gone" - do u think the world would be "music-less" ? no it wouldnt. another model would appear in its place - maybe a major business model like the last, or maybe, just maybe, an internet based free for all, where all new artists would come up through this new model... it is a possibility. You can be sure its a possibility that keeps some major label guys awake some nights.

53.1.2006 16:14

And it never occurs to them that anti-piracy efforts could actually lead to a decrease in sales. How many people do you think thought twice before picking up a Sony CD after recent events? In short, no matter what the true cause of their numerous problems, they'll always point the finger at file-sharing. Likewise, whenever their sales increase, they always are quick to praise themselves and never stop to think that maybe file-sharing actually helped to promote those sales. Troubled minds.

63.1.2006 16:19

Quote:
maybe, just maybe, an internet based free for all, where all new artists would come up through this new model... it is a possibility
now that's my kind of outlook on proceedings :)

73.1.2006 16:31

"As for people who download music and simply don't buy it at all, I'd assume the majority of them are children. Let's be honest, young kids who rely on their parents generousity to get music probably don't have quite a big collection of music. Therefore when exposed to P2P, they would probably go crazy sharing music. I personally think music is just too expensive for children and teenagers. Thats why a whole generation of kids recorded their music from radio stations onto cassette tapes, recorded music from their friends cassette tapes etc. It was the "music file sharing" of the day. The music industry then also warned that this piracy was going to destroy the industry, it didn't. Will P2P networks destroy the music industry? no." Well said... i see it *exactly* the same way... i was one of those kids who recorded my favorate songs off the radio growing up... and i still have those tapes haha.. but i havent downloaded anything in a long time... but when i did... you can defanatly say it was my radio at my control... but never a source for full on albums.... esspeically ones that are major label new releases.... alot of the music i listen to you cant find in record stores... or vise versa.. you cant find on the web but only in stores.. i can care less about alot of the music that comes out today personally.. but yah.... i highly doubt this is the end of the music industry man.... this is what happens when you mix $$$$$$money$$$$$ with music... but music is eternal and will never die out.... money aint shit

83.1.2006 20:45

nice story Dela, very well put. I think another way of putting it is that the RIAA's point of view is very narrowminded, instead of looking at the whole picture.

93.1.2006 23:00

i'm going to buy a tape deck and blank tapes record all the top 40 will the RIAA come after me will they shut down the radio station because they assisted in copyright infringment they have a very big neck sue everone and sue them again and if that does not work sure sue more again why dont they try offering a new product on the market to make the cd worth buying yes some people will download and never buy but thats just the way of the world deal with it

104.1.2006 4:46

Quote:
It seems the the major music labels of the world believe that all their customers have the same amount of money each year and spend it on the same things.
Or maybe half the music that comes out nowadays is just crap.. -Mike

114.1.2006 7:02

probably won't be long before they start pushing for a new format to replace cd, just like what they're doing with dvds.

124.1.2006 7:31

dont worry, doesn´t matter if they push for a new format, doesn´t even maetter if the y get a new format every week, we´ve got mp3 which is here to stay, all we need is 1 person to crack the new format and almost instantly it´ll be available... you guessed it on mp3 XD

134.1.2006 8:04

CD's will go out of fashion soon. Everyone will be downloading legally.

144.1.2006 10:05

Or you could be like me, reach a time in your life where music is very low on priority. I listen to the radio in the car but not at home. More and more people are just content with free radio songs or borrowing a friends after they heard it enough times.

154.1.2006 12:55

Actually, you know that the average american doensn't even know what p2p means. Much less the knowledge, or even the ambission to find out more. Most people that like that new song they heard on the radio think they have to go buy the album, and they do. The RIAA needs to stop crying about EVERYTHING!

164.1.2006 14:33

Also they never took into account that some of the bands that released CD's in 04 didn't in 05. Also some of the CD's that came out in 05 sucked too.

174.1.2006 14:49

Quote:
CD's will go out of fashion soon
Agreed. -Mike

184.1.2006 17:52

I still buy/collect only vinyl. Its the only way to go for true sound...

194.1.2006 19:31

I agree with some of you about how many different genres are opened up to you when you download off the Internet. It's a lot easier to just download that one song (or album) to see if it's worth buying. If it isn't, then they either keep it for archival or just forget to remove it. If I really REALLY like something that has just 1 or 2 bad tracks, I'll eventually go get it. P2P just adds more variety to the mix. I doubt I would like the music I do if it weren't for one form of P2P or another. A little food-for-thought.

208.1.2006 15:46

Well i jus got a curious thought about this. Since they will always claim that piracy is seriously hurting music sales and so on, well how much does it actually hurt it, dont they make a profit out of that in the billions of dollars?? dont they pay artists that are popular a shit load of money somehwere int he range of 10 million and up. well why dont the fucking take a pay cut, the artists dont need that fucking bmw, they can get out of the mansion that they live in and perhaps live somewhere a tad smaller. so my theory, artists dont need 10 million $$$ they should live jus like us and have to worry about bills, food, and everything else because they dont deserve that much money.

219.1.2006 3:03
cdd1234
Inactive

so very true .... i too think that these organisations just look to P2P users/ online sharers as scapegoats .... solely responsible for lower CD/ DVD sales.

229.1.2006 3:20

Their profits would have been alot higher, but there spending megabucks on lawywers to fine lil ol ladies.

239.1.2006 6:50

All these major record companies complain about a lack of sales. Have they ever considered that the quality of the Artists they are pushing might just account for the sales slump? How many people will go out and buy a new release by a band, (even without having heard it), JUST BECAUSE THE BAND HAVE BEEN AROUND FOR EVER?? I think the ONE-HIT-WONDERS list must be growing at an ALARMING rate!! I think this is partly because the A&R team is being forced to meet a sales target, and are resorting to only punting the bands (one-hit-wonder or not) that will put cash in their pockets! How many bands today actually write their own songs?? Has the music industry fallen victom to becoming a fassion show for all the people they consider cool? Music in the 60's was written by the people, for the people. Today it's all about a bottom line! As a friend of mine said about 5 years ago... "In the future, artists will not make money on the actual song, but the related merchandise" At the end of the day, people think with their pockets. And if the sales aren't doing what the record companies predict, they should get better forecasters, or stop trying to force-feed us the #(*$%& they are currently, 'cos it CLEARLY aint workin!

249.1.2006 7:32

"All these major record companies complain about a lack of sales. Have they ever considered that the quality of the Artists they are pushing might just account for the sales slump?" I couldn't agree more Sidecona and 2005 wasn't a great year for new and inspiring Artists. I personally bought probably the least amount of music ever due to a few reasons. The main one being the lack of new material and buying alternative things like an Ipod which I wouldn't have bought previous years and money can only go so far. It is also very apparent that the RIAA are just trying to pass the buck by blaming P2P for lack of sales and a lot of people have also boycotted music companies associated with the RIAA due to the internal hypocrissy that surrounds them. Last year we had never seen so many 'The Best Ofs' compilations and is another indication that the music industry struggled with new Artists. I for one wouldn't waste my money on these as if I like the Artist I would have already bought their Album, so why do I want to buy the same songs again? Lets hope that the music companies are more creative this year!!!

259.1.2006 11:27

you want to know something funny. I have a CD that i want to rip to mp3 on my computer. The CD is physically in some sleeve of a case logic album in some closet. I would find it easier to download this CD from slsk, instead of searching for it, ripping it, and getting shafted with the typing in the titles myself cause CDDB can't find the disc. Maybe RIAA forgot that humans are naturally lazy and would rather go to their computers to get the money than get dressed, drive down to to Tower Records and go sifting through bins

269.1.2006 11:47
vudoo
Inactive

Why don't I buy CD's? Because they are bulkey and take up too much room. I can store more than 10,000 songs on my iPod video which is about the size of my hand. So then why would I want to clutter my home with CD's not to mention that I have to go and look for them instead of simply clicking the artist or song I want. CD's are obsolete and Mp3's are in. In fact Mp3's have been in since 2001 and will continue to replace CD's period. Now I too pay for iMehs which is a subscription service and for us folks that got in on the beta test only costs $7/Mo and the selection beats Napster, Rhapsody and even MusicNow. Yes I pay for iMesh. Yes I can crack the DRM and put the songs onto my iPod. The Music industry refuses to switch to Mp3's and disguard CD's and the movie industry refuses to disguard DvD's and replace them with mp4's which is the format of choice since the iPod is the most popular video player. Its easier to blame it on Piracy and cause a big scene than to admit to your own mistakes and swallow the pride and come up with a business modle that is affordable and will help pay the creator's works. Ad bannar supportive p2p could have been the answer and just think of it if Apple had an ad bannar supportive Audeo/Video service that paid the artists. Well I suppose 90% of the rich people have way more money than brains.

2710.1.2006 5:51
DTrainer
Inactive

I only wish p2p was hurting the media industry as it has more than deserved a huge kick up the backside for at least the last two decades. Of course it probably does make a small notch in thier profits but nowhere near the amount they like to make out or as much as I would like. Long live p2p!

2811.2.2006 10:57

I personally am more apt to download mp3s than to get an actual cd if for no other reason than I can actually listen to the mp3s. I live in a dorm building at my college, which means my roomate and i have no spare room for stereo equipment. This makes my computer my main source of music. Now, when i go out and buy a new cd, it's now more trouble than it's worth to listen to it on my PC. I generally spend more time trying to get the cd to play, going through all the little flash menus the slap on the disc and watching it trying to register itself or whatever the devil it does before i can even start listening to my music. Winamp can't even play these things anymore. So, my question is, why should i buy something that won't play in my primary music player when i could just download it and be sure that it works?

2916.2.2006 3:15

I could not find my original thread but this one will do just fine. The RIAA needs to come to grips with reality. They have the largest market ever. They have rights to tunes in the US for 100 years. They can distribute tunes almost for free. The MP3 quality is not as good as the CD. They can not expect to sell them for the same price as on a CD. They are never going to dupe the entire world for very long with encription. They need to sell the tunes for a lot less. Provide an excellent search engine and just rake in the money! They are trying to sell tunes for more than most of the public wants to pay. They foolishly believe each pirated tune is lost revenue. The theory is that the public would buy the tune regardless of the price and that they are “buying” it at the cheapest price they can find which is free. The reality is people will buy something if they want it for the price offered and have the money. This concept has been around for a long time that is why they have sales. Retail actually has to pay maybe 50% of the sale price for what is being sold. These folks are working 99.9999% mark up when it comes to MP3s. Yet they are convinced that they should sell them for the same price as a CD. They are foolish enough to tell the public creating and distributing MP3s cost lost of money. Just who do they think they are fooling? They feel justified calling the public pirates I believe they are the bigger pirates. I visited the biggest pirate I know (I do not know anyone in the RIAA) the other day who I have not seen in a good long time. He has almost every movie that ever came out. I was surprised to see shelves of legal movies. I asked him didn't you already have those movies. He answered yes, he bought them because the price was right. It did not matter that he already had a pirated version. Ponder that one RIAA!

3025.3.2006 7:45
vudoo
Inactive

That is a very good point about those pirated movies. I too have went and bought a few movies that I've pirated when the price was right. Well I don't really think its Piracy. Maybe going to the movies with a camera is Piracy, but who really would rather have a blurry Pirated cam movie instead of going to the Movies or waiting for it to at least come on DvD and Downloading a DvD rip? When we Download a camera version of a movie it is only good for a sample at best. I don’t really keep those files on my machine for very long as they just plain suck and take room that I can use for tons of Mp3’s. However the 700 MB DvD rips I’ve kept as long as they are not just the screeners that have the scrolling text at the bottom or switch from color to B&W. Another solution would be to offer the DvD of the movie that you’ve just watched at the show when the show ends. This way you’ve actually gotten your money’s worth. When I take my girl to the movies I take her so we can enjoy the full experience. I can’t imagine saying “Hey Honey I have a good Pirated version of Failure To Launch” because she would not get the full experience of seeing it at the movies and of course the romantic part of paying for a show is gone. She probably would really think I am cheap if she watched a camera version of the movie instead. Anyone who ever did that to their woman deserves to lose a relationship.

3122.8.2006 12:39

as for the drop in cd sales is it because the music is crap same as what is comming out of hollywierd these days

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