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Cannot possibly be true?

It is.

https://www.npd.com/wps/portal...

"According to The NPD Group's Retail Tracking Service, Bluetooth headphone revenue overtook non-Bluetooth for the first time in June accounting for 54 percent of headphone dollar sales and 17 percent of unit sales in the U.S."

So, how am I wrong? Or are you just in denial?

https://www.npd.com/wps/portal/npd/us/news/press-releases/u-s-commercial-channel-computing-device-sales-set-to-end-2013-with-double-digit-growth-according-to-npd/

These are end of year sales figures in the American Market. What seems to be wining is Good Value. Overpriced Tablets and PC's from Apple/Microsoft are losing out to Android\Chromebooks, and still there is a shift(For many) toward tablets. I think we are seeing the overpriced Wintel/Apple computers(including iPads) being replaced with good value Chrome\Android with Tablets winning where ARM/Keyboard-less less of an issue over increased portability and price.

Of course we can ignore sales figures.

Surely you mean this:

https://www.npd.com/wps/portal/npd/us/news/press-releases/us-consumer-technology-retail-sales-decline-2-percent-in-2012-according-to-the-npd-group/

where Apple owns 20% of consumer electronics and Samsung has 9% by revenue?

Gaben's looking at trends. He isn't a cable TV operator, or NetFlix, and outside of those two groups the largest provider of Internet video on demand is Apple, by a very wide margin - almost more than Amazon, Vudu, and Zune combined. It is a small part of overall VOD pie (pay-TV operators have 72% of the revenue share), but it's a growing share.

At least, that's what NPD says. They don't compare Netflix to iTunes directly, which I would find interesting, but I don't think Gaben sees Netflix as a direct competitor - they're not providing a platform. Not yet, anyway.

Thanks for the obvious strawman and not addressing anything I wrote. Should I take this to mean you will not be parroting your bogus and unsubstantiated supplier report anymore?

But sure, I'll take this opportunity to add some more links. How about NPD's report on Holiday sales, showing that average selling price of PCs actually increased over the Holidays even though net total shipments were down. Further "Sales of Windows notebooks under $500 fell by 16 percent while notebooks priced above $500 increased 4 percent." So if people are buying fewer cheap Windows notebooks, how do you think that looks to a manufacturer who has a reputation for selling almost exclusively cheap Windows PCs? Acer's definition of Windows being a success is if it lifts the entire PC industry.... but Windows 8 was never designed to do that; Windows 8 is designed to sell more high end touch screens and tablets, and it looks to be doing exactly that. People are shifting away from cheap systems, and Acer, known for selling cheap systems, is hurting. Big surprise there.

Some manufacturers have embraced Windows 8 and have released some really innovative laptop designs that take advantage of its strengths, rather than releasing just another laptop with Windows 8 installed. Let's see what they have to say about it. Dell says Windows 8 demand is high. Lenovo is enthusiastic after huge tablet demand. Lenovo also says they didn't realize how big touch screen demand would be. Coincidentally, these are bigger manufacturers than Acer and especially Fujitsu, who are actually taking Windows 8 seriously. It's not surprising they're getting all the demand.

Or maybe you care to look at actual physical Windows 8 adoption instead of what CEOs have to say. According to Statcounter, Windows 7 was growing at a rate of .027 percentage points per day in the months leading up to Oct 26. Windows 7 hit a wall on Oct 26 and has been declining since. Today, Windows 8 is growing at a rate of... wait for it... .025 percentage points per day, statistically the same rate. So to say Windows 8 is experiencing terrible growth is to say that Windows 7 was experiencing terrible growth.

So that "megabomb"? It sold 60m copies in 2 months and earned Microsoft 6 billion dollars. I'd love to have that kind of "megabomb".

you have PC sales down 13% over the same 4th quarter year before last, even though the economy was worse which clearly indicates the reason that sales are plummeting is Win 8 is a DO NOT WANT.

PC sales may be down, but pinning it on Windows 8 is wrong. Let's take a look at what NPD has to say about holiday sales of consumer electronics:

+Overall sales declined 7 percent
+Windows notebook holiday unit sales dropped 11 percent
+Notebook computers and flat-panel TVs both exceeded $2 billion in total dollars sales, while no other single segment accounted for over $1 billion in revenue.
+Sales of Windows notebooks under $500 fell by 16 percent while notebooks priced above $500 increased 4 percent.
+Macbook sales dropped 6 percent while the ASPs rose almost $100 to $1419.

So what can we infer? Sales were down across the board, yet notebooks were still in the top 2 earners. Further, while cheap Windows notebook sales were down, expensive notebook sales went up. Same thing happened over on the mac side, where macbook sales fell, but average selling price rose. People are buying more expensive notebooks. The culprit? The move to tablets and ditching the netbook. People just aren't buying netbooks and cheap laptops; they're buying tablets instead. Is Windows 8 to blame for this? Not on its own (iPad and Android are moving this trend, probably moreso), but the fact Windows 8 is available on tablets and is very tablet friendly it's certainly isn't convincing people to not buy tablets.

So is Windows 8 the do not want megaflop bomb, as you put it? Yeah when you skew the facts as you have, sure it is. Add in some more context above like I have and it's hard to arrive at that conclusion. But let's add in some more data. According to statcounter, Windows 8 market share is growing at the same exact rate Windows 7 was growing in the months leading up to the Win 8 launch; Windows 7 market share has been declining since then. Or that last month according to Hitslink, Windows as a whole gained market share for this first time since May, thanks in large part to Windows 8. Or that according to Valve, gamers are adopting Windows 8 at an even faster pace that will set it up as the second most popular desktop gaming platform by the spring.

The computing landscape is more varied and diverse than ever. For this reason I think it's very difficult to simply dismiss Windows 8 out of hand, as you are with your hyperbolic rhetoric.

Average selling prices of Windows computing devices have jumped significantly this year. Last year, overall ASP was $433 while this year’s ASP over the past four weeks has risen to $477. Windows 8 notebooks have seen a nearly $80 rise in selling prices versus the prior year, propelled by the aforementioned strong performance of touchscreen devices and a solid uptick in the pricing on mainstream notebooks. Windows 8 desktop ASPs were also strong with selling prices up nearly 10 percent, driven by the same factors as notebook sales.

And further there is this article, published yesterday, which says demand for PCs with touch features is strong.

"Touch machines are actually selling above expectations," said Bob O'Donnell, a program vice president at IDC. And that means supply shortages. "Some vendors are actually facing shortages because touch panels are in limited supply. Vendors are saying they can't get as many touch-based machines as they would like to meet the demand that they're seeing."

The article goes on to say that cheaper non-touch PCs are in lower demand than expected, but this might be what Microsoft had intended: raising prices by offering compelling features, rather than offering rock bottom (in terms of specs and price) PCs that people purchase but end up hating because the value is so low.

Average selling prices of Windows computing devices have jumped significantly this year. Last year, overall ASP was $433 while this year’s ASP over the past four weeks has risen to $477. Windows 8 notebooks have seen a nearly $80 rise in selling prices versus the prior year, propelled by the aforementioned strong performance of touchscreen devices and a solid uptick in the pricing on mainstream notebooks. Windows 8 desktop ASPs were also strong with selling prices up nearly 10 percent, driven by the same factors as notebook sales.

Slashdotters say touch screens on laptops and desktops are insane, but it's clear to me the general population enjoys them - and are willing to pay for them. My girlfriend uses the touch screen on my old tablet PC to click on shortcuts and scroll pages when she has a keyboard and mouse right in front of her. My parents have an HP TouchSmart they enjoy. My old university had those TouchSmarts in libraries and public areas, students routinely used the touch screen instead of mice (but not keyboard). The surface and other x86 tablets like it offer a full blown touch interface unlike previous Windows generations, and the hardware to go along with it, and that's something those cheaper more powerful laptops don't offer that consumers might be willing to pay for.

Actually, all this report says is that US desktop and laptop sales are sluggish and that Windows 8 has done nothing to change that. In fact, the actual report, not linked to for some reason, states this: “After just four weeks on the market, it’s still early to place blame on Windows 8 for the ongoing weakness in the PC market.” It also states that slow back to school sales have increased inventory, which is hampering Windows 8 sales.

They also have a very strange definition of "four weeks on the market" as the period they're looking at is Oct 22, 2012 - Nov 14 2012... which includes 5 days prior to Windows 8 being released. With Microsoft selling about 1.5M licenses a day in these initial weeks, 5 days where sales are practically zero is a lot to include in the data.

Lots of valid points. However here the percentage of profit does matter. In the case of Android you have ~50% market share and iOS gives you ~30% market share. Those numbers are very comparable as they differ only by about a factor of 1.6 (i.e. they are the same order of magnitude). This means that if Apple rakes in 80% of the smartphone profit and Android phones rake in 20%, then here it means that Apple is literally taking majority of the profit even though their market share is smaller slightly. Also for any particular model Apple owns the top 3 slots of model sales as is expected considering the market share is taken by just a few models while the competition is made up of hundreds of models by many manufacturers with varying quality and OS implementations.

For a developer the iOS framework should be THE platform both for market penetration as well as unit sales (iPod touch goes there too) and the fact that the average iOS user is more likely to actually pay for applications unlike Android users (sorry, but Linux mentality and el cheapo phones target by default the people who don't want to pay for stuff). So if you are looking for a platform to earn money, then this is the platform. You may also branch out and do Android hoping that you can enhance sales, but it may well be that the support cost for keeping the software up to date will not be covered by the platform at all (and you'd need to support a lot wider plethora of devices/OS versions, in iOS case it's just 1-2 OS releases to target majority and only 1-2 devices).

And the reason Apple has not reduced the price of iPhone is very simple. They don't need to. They have not reached supply-demand balance meaning they still sell every single phone that is produced as it leaves the factory assembly line. Also, they have made the great strategic move of transitioning the devices down the line to cheaper modes effectively targeting also those segments of sales without needing to set up separate manufacturing lines as those already existed for the phones when they came out. This method has been only in place for the past two years and we can assume Apple will keep doing it so that as a developer and a customer you'll get the benefit of the platform no matter what you purchase power.

And of course as a consumer you should take note of the benefits as well. I think the one screaming difference is the battery power where an iPhone 4/4S will last 2-3 days while majority of Android based phones are hard pressed to last a day at decent usage. Then the usage experience must be good as well because Apple has the best user retention statistics (sorry couldn't find a newer plot). And the vertically integrated ecosystem with paying customers being able to watch movies across devices with seamless syncing etc etc does lock one into the ecosystem quite well and provides a plethora of options inside it that you don't even want to go looking outside the system as there's no other such integration there yet.

Here is the link to NPD, http://www.npd.com/
They are a well known firm. Just google for the NPD results they are all over the place.

Note that what Nielsen calls "market share," isn't, by the common definition. It's actually installed base, which is a trailing indicator. People who bought phones almost two years ago, and haven't upgraded because they're under contract and not eligible for a subsidy are in those numbers. "Q2 market share" should refer to sales during Q2, not how many people owned a brand.

Since Android sales have been increasing faster than iPhone sales, Android market share is actually greater than what Nielsen implies.

Where Nielsen's "market share" shows Android/iOS at 39% / 28%, NPD's report on true market share (sales) shows 52% / 29%.

The numbers I'm quoting are for an individual title (most titles follow the same path, but don't get coverage). When you're looking at the possibility of developing an individual title for the PC, Those are the numbers you care about. The NPD numbers you are quoting are for every title in the industry. Those include a LOT of deep discount titles on clearance, which are more of a sign of decay than health.

Also, I try not to compare NPD numbers from different articles. They're a precise enough organization that one may include accessory sales, another may include handheld or iPhone sales, etc. But journalists tend to blur those important distinctions away and present them as just "total sales!" Sourcing with NPD, I've found, is important. Comparing across different sources of NPD numbers (or different organization's numbers) will just lead to madness.

Also, the NPD is not always right. I'd put their normal margin of error at +- %20. At least they tend to be consistent in the direction which they're off in.

Here's an NPD figure. The US retail console games market was 10 billion dollars in 2009. The retail software game market was 500 million. That pegs the retail pc market at 5% of the overall retail market. Taking into account digital download, and you're still shy of 1 billion. That's still less than %10 of the console market. Add in WoW, and you're up to %20 of the console market. But again, you'll go broke chasing WoW.

While NPD is struggling to categorize digital download sales on consoles, their estimates put retail to digital sales at 9 to 1. Numerically then, digital downloads on consoles are even bigger than digital downloads on PC's. We'll have to see if they're financially as such if those numbers are released (6 grand for a report from NPD is a little pricey to just satisfy some curiosity).

I can't get into as many hard figures as I would like, since I've been privy to figures that aren't public. But the public figures are bad enough on their own.

You can survive on the PC market with some creativity, luck, and timing. But the PC market is quickly becoming like the Arcade market in the 90's: second string.

And it wasn't always this way. Before the release of this generation of systems, PC gaming was the reputation to beat. Like Arcades, for a while nothing could touch PC gaming for visuals, flexibility, and raw power. It had been in a little decline since RTS's and FPS's had fadded away, but online was definitely driving adoption. And, of course, who wouldn't want the mature development tools of a PC? Then this swath of networked online consoles came along, and you could play games in high definition that beat out 1,000 PC's for visuals, and you could play with all of your friends. Also, people moved on from gaming friendly desktops to laptops that took a huge power hit for convenience and durability. And the 360's dev tools are pretty much based directly on PC dev tools, so there wasn't much loss there. If anything, not having to target many different configurations has made this generation of consoles actually easier to develop on than PC's, for once.

Nobody wants to see PC's fading from prominence. But for the moment, that's where things are headed.

In January 2010, The NPD Group fielded an online survey that was completed by 18,872 consumer panel members ages 2 and older. Responses for individuals ages 13 and older were captured directly, and responses for individuals ages 2-12 were captured by “surrogate reporting,” whereby a parent/guardian brings the child to the computer to answer questions, and the child then answers either with or without the guardian’s assistance. Final survey data was weighted and balanced to represent the U.S. population of individuals ages 2 and older.

I guess the most obvious way in which error could slip in is via the on-line nature of the survey - possibly their weighting forumla could use some tweaking too?

I just love surveys since they can be the opposite of reality. So while 1 in 8 say they'll cut the cord, cable and satellite subscriptions are at an all time high. http://www.npd.com/press/releases/press_091116a.html

The Razr was a disaster

Really? Then I wonder why it made headlines in 2008 Q3 when the iPhone 3G outsold the RAZR in the US.

How will they compete with more stylish Apple or more nimble LG?

I don't know, maybe make a good phone instead of a shiny one?

Hi I am the OP.

No no no. The reason we don't hear anything about other phones is because they are not Apple products. I know I will get flamed for this as well but in case you have not noticed....SlashDot is COMPLETELY "in the tank" for Apple. Anything they do is great, everything they make is perfect. Just the facts. 50% of the time SlashDot is NOT news. News implies not pushing an agenda. Sorry SlashDot, you lose at that.

Did we hear anything about best selling US phone for 2009 Q1?
http://www.npd.com/press/releases/press_090504.html

I will give you a cookie if you can guess why we did not hear about that?

If no one wants to pay for them, no one wants them produced. So if no one wants them to be produced... why should you produce them? (Kinda obvious, isn't it?)

They dont have to be produced if theres no market for them. (Kinda obvious, isn't it?)

Yeah, the video game market is only $18.8 billion; it is kinda obvious that no one wants these products.

Wow, you somehow jumped from "some people buy used games" to "there is no market for games."

The way you write betrays you:

He's too much of a control freak to let Tim Cook or anyone else sabotage the juggernaut he helped to create

Why would Cook be 'sabotaging'? We're talking incompetence here, not malice.

If you think Sculley's Apple will make a comeback then you're mistaken and don't know history.

Sorry - the downfall has already begun. RIM is again the biggest smartphone maker.

Expect things to get worse when this xbox exec 'sexes up' the iPhone. Probably with some lime green styling. And make it bigger. Yeah, chunkier. And the appstore will be renamed to iPhone live - where you can only rent apps.

PC gaming is in decline

NPD Data Retail sales in the PC game software industry showed signs of growth, with revenues up one percent, exceeding $970 million in 2006

That doesn't include digital download sales: There's twenty million people on Steam now [Feb 2009]. That's 100% year on year growth since 2004.

And none of these numbers include the countless indie developers. I know it's trendy to bash PC gaming but it's not going anywhere any time soon.

crysis ftw!
only on pc

PC gaming is in decline

NPD Data
Retail sales in the PC game software industry showed signs of growth, with revenues up one percent, exceeding $970 million in 2006

That doesn't include digital download sales:
There's twenty million people on Steam now [Feb 2009]. That's 100% year on year growth since 2004.

And none of these numbers include the countless indie developers.
I know it's trendy to bash PC gaming but it's not going anywhere any time soon.

I know, but whose fault is it? I want to know in order to fix the problem. Is it my fault for not developing and publishing such a game myself?

I guess that would be partly the developers/publishers that don't want to create such a game, and partly the customer that don't buy it. Not Steam (or Best Buy, or Amazon, or other distributors), which is the only point I was trying to make.

For games in the former category, there isn't any advantage to giving each player his own view. So why are most games like this console-only?

There are tons of clones of Chess and Reversi and Monopoly and every other board game - but they're in the $5 crapware bin at the store, not the shelf. They don't get exposure because any idiot developer could make it (and they do), so there's not much profit in making it. On the console, the console manufacturer ensures that there is only one chess game, so the developer can put a little more effort into it since they have a monopoly.

Yahoo and MSN both have online game sections that have cheap/free games to play, although I think for most of them you'd have to use two browsers to play two people on the same computer.

There's also the big matter of control devices - consoles are designed with 2 or 4 controllers. Computers are designed with one keyboard/mouse. You can pass control of the keyboard/mouse back and forth, but this precludes any simultaneous play, meaning only turn-based games can work. Some older games used half the keyboard for one player, half for the other (for example, WASD and space for player 1, arrow keys and enter for player 2). Many keyboards have problems with multiple simultaneous keys being pressed, and so games don't even try to do this any more since it doesn't really work that well. So, without additional hardware, PCs are restricted to turn-based games for multiplayer, single-computer.

And one of my complaints is that this practice of allowing one CD key to spawn copies is less common, and that is one of the forces driving gamers to the consoles and thus away from indie games.

Uh.. what? Most indie games are cheaper than major titles, even when you have to purchase multiple copies.

The "move" to consoles is more caused by a few things:
1. consoles are actually "good enough' compared to PCs
2. more widespread acceptance of gaming - Halo on Xbox for frat boys, Wii Tennis for your mom - instead of just nerds on PCs
3. most people are idiots and can operate a console, but not a PC
4. consoles live in the living room with the TV, and lots of people can sit around on the couch playing. PCs normally live in the bedroom/study with one office-type chair. It's easier to be a social activity. (ignore the argument any online game is social for the moment, most non-geeks don't agree)

I don't think people are moving to consoles so much as people who would not game on a PC are now gaming on consoles - in other words, new gamers. Two great articles here:

http://www.npd.com/press/releases/press_080131b.html
http://cordblomquist.com/?p=119

In the first, we find that PC games are only 19% of sales, the rest are console games and hardware. Oh noes, PC games are dying, alert the internet!
In the second, we find that even though PC games are only 19% of sales, PC games grew 21% while consoles grew 50%. Moreover, PC game sales have increased every year.

They're both growing, just consoles have a larger market to expand into. Most non-geeks people want a toaster, not a toaster construction kit, even if the toaster is more limited.

NPD group is not an owner of the HD-DVD format. They are just a bunch of market analysts who provide information to retailers. See their website : http://www.npd.com/corpServlet?nextpage=profile_s.html

Perhaps this will clarify... http://www.npd.com/corpServlet?nextpage=profile_s.html/

That is actually not true. You can get to the first star however you want, too. There's no path in any of the levels (apart from very few, like the sledding levels). For some obstacles, there's only one way to negotiate them, but most of the time, you can find your own path to the star.

That evaluates to 14% of the actual money spent. As I've said, heavy gamers are a small part of the market in terms of total money spent. Comparing the "Mass Market Gamers" (which I guess is NPD's term for casual gamers) to the heavies gives the following picture: 2%x13 games = 26 for the heavies (I'm not going to normalize this); 15%x2 games = 30 for the casuals. So the casuals buy more games than the heavies according to this study; and that doesn't even include "casual kids."

Yeah, really. Did you even read that link? The attach rate for the Wii and PS3 are about equal, and both are about half the 360's attach rate; which makes sense, because the 360 was on the market twice as long, and thus gamers had twice as much time to buy games. As I've said, the Wii's attach rate suggests that most casual gamers will buy quite a bunch of games.

The NPD Group, Inc. provides innovative market information products and services to help our clients understand their markets and optimize their businesses. We work with more than 1,400 clients - many of which are the best-known brands in the world.
http://www.npd.com/corpServlet?nextpage=career-overview_s.html

Here's a link to the press release from NPD Group. From the bottom of the press release:

Methodology
The report is based on online survey responses from 6,260 members of NPD's online consumer panel. These respondents, comprised of males and females ages 6 to 44, are qualified owners of at least one next generation system (PS3, PSP, Wii, NDS, Xbox 360). In addition, non-owners were captured in order to further probe on next generation system purchase intent and other areas. Fieldwork was conducted from April 4-10, 2007.

Begin to understand the problems? How many 6-year-olds use streaming media, and how many of the respondents have PS3s? Only a fraction of respondents so we have a limited sample size. And it was an ONLINE survey, everyone could easily have been lying. Read: They were too cheap for focus groups.

18% actually seems a little high to me.

I'd say so, too...unless they are counting porn.

I think the movie industry is really overstating their case here. A recent study claims that P2P downloads are 60% porn, 20% TV shows, and only 5% full-length movies.

So what are they so worried about? Consider the fact that porn is by far the most downloaded copyrighted content, and it's probably safe to assume that pirated porn represents a much, much larger percentage of porn consumed in comparison to "legitimate" movies, and thus their "losses" are far higher. Can anyone honestly claim that porn is dying from piracy?

Report is from NPD Group, well who are their clients ... EMI Music (a large RIAA member).

This is not an unbiased research firm, they are a marketing company and will serve the interests of their clients.

Probably just another arm of the RIAA/MPAA. I don't see how it would possibly serve this for-profit company's interests to say anything other than downloading is theft

Yeah, I hear this about Maden all the time... That's how it manages to remain one of the biggest selling game titles of all time...

Actually, I think this may have something to do with the fact that they produce the only licensed NFL game. Here's a neat link comparing top games sales for 2004. Notice how Madden is #3 but NFL 2K5 is both #4 and #10 (PS2 and X-Box), of course, that year they "bought out the competition" and then you get numbers like these, where, lo and behold, Madden is now undeniably on top (#1, #4) and they've snuck in with #5: NCAA Football.

Truth is, it seems to me that there is just a big market for american football games. EA didn't really win any major "competition" here, they just bought off the NFL player's union in the very year they seemed to be slipping. Good market strategy, but I definitely won't attribute their sales numbers to game quality. Truth is, Madden is probably just "good enough". There are lots of football fanatics who just want "a game" and Madden meets that criteria.

I'm not seeing that, the PC is still much more popular, partially because console games are just fucking expensive in comparison (1/3 to 1/2 more expensive) and drop in price slowly or even never.

"The price *only* decreased because of inflation. The sticker price never changed, on average."

I am not sure why you wrote that. CD prices have been in freefall. Here's some data. I don't even need that data to show me what I already know: CDs were commonly $18 - $20 five or ten years ago, and they're $14 today.

Keep in mind that the overall net on music CDs is on the order of 10%, which is far less than lots of other industries. CD prices can't arbitrarily come down much lower until there's a massive cut in the production costs. Perhaps that needs to happen and will happen, but despite what the "net is the same as gross" crowd will claim, you can't expect retail prices to drop to $10 tomorrow. Even the low-overhead indie labels like MagnaTunes, which don't provide money for music production, still sell their stuff at $8 a CD, which is probably about the sell-in price that the traditional labels offer to distribution.

"I remember commenting to a sales clerk how they were expensive compared to cassettes or something like that and he remarked that "yeah, but as soon as lots of people are buying lots of them, the price will drop down to the price of cassettes, or even lower since they're cheaper to make. A CD costs like 50 cents to make."

Sorry you were mislead by the sales clerk. He may have been misinformed or simply not known what he was talking about; mechanical royalties alone can cost $0.80, and a CD sure as hell didn't cost $0.50 to press back then... I was pressing data CDs in qtys of 10K and more (ie. larger runs than most record companies) ten years ago, and I remember that it was a big deal when the cost went below $0.50.

At any rate, I paid $18 for Tears For Fears' "Songs From The Big Chair" in '85 (a good investment overall); that's $32 in 2006 dollars. Production costs have gone way down, but shipping costs and the salaries of everybody who touches the CD at every stage (including that store clerk) have gone up considerably since then. Given that, a drop of more than 50% in constant dollars isn't bad.

I'm curious as to where you got those figures. This shows p2p usage of around 10% and pay site usage of around 4% as of March 2005. I would guess the usage of pay sites (iTunes, etc) has increased since then. Hardly a 40-1 ratio. Hell, its not even a 4-1 ratio.

"There's no reason why a CD should cost $20 (and only a dime going to the creator) when the manufacturing cost of CD is in pennies... just my two cents."

They don't. New releases are around $13.

A manufacturing cost of a finished CD is a bit north of a buck. I'm guessing you're confusing it with the cost of a CD-R? At any rate, the manufacturing cost of an item usually has very little to do with the cost of sale... stating the manufacturing cost is pointless. The retailer that sells you the CD usually makes more commission than the manufacturing cost. Lots of people -- you're certainly not the first -- are of the impression that the various people who help make the CD a reality work for free, but that's just not the case.

You mentioned "huge profits" a few times and based on the numbers you threw out, you're apparently believe that "huge profits" are made on the sales of CDs, and this is one of your problems with copyright law (and, I'm guessing, your justification for breaking it). If the net margin made on CDs upsets you, you really don't want to know the margin made by Apple on your iPod, by the manufacturer of your mouse and keyboard, the clothes you're (hopefully) wearing right now. Your CDs are among the lowest-margin products you own. If you want a moral justification for piracy, "CDs have huge net margins" isn't a logical one.

"Why do CDs cost as much as vinyl LP albums did? The production costs for (digital) CDs are several of orders of magnitude less than they were for (analog) LPs, yet the price-point never moved."

I'm not sure I follow. Are you of the belief that manufacturing cost is a significant portion of the cost of sale? It sure isn't in most industries I can think of (the manufacturing cost is a small portion of what it cost Apple to sell you your iPod, or for some other vendor to sell you your mouse and your keyboard). From what I've seen, that's the case with CD production as well -- heck, royalties alone usually cost the record company more than the piece of plastic does.

I'm also not sure about your assertation that price points haven't moved. I'm guessing you're not using constant dollars. When CD players started getting affordable around 1985, CDs were $18. If prices hadn't moved, they'd be $32 today. CD prices have been in free fall lately, with new CDs hovering at around $13. That's a 60% drop.

"I just wont go to their concerts."

Fair enough. It's interesting to note that a very common meme on Slashdot that now that we're here in the digital age, artists should stop trying to make money on sales of their music, and instead make money on concerts. It looks like that notion has been rejected by Slashdotters, as well.

I think the fallback meme here is: "people who produce content that I can easily copy should just give up on making money. If they're real artists, they'll { compose | write | sing | paint | code } for the pure joy of creating work for me to enjoy."

"Just like the more they jack the prices of CDs up, the less Im going to buy them."

For what it's worth, for the past several years here in the US, CD prices have been free falling. Five years ago, $18 for new releases weren't uncommon; new releases are now under $14.

Camera phones are fast replacing a number of regular phones

Are they? The "article" quotes no source and no statistics for this claim. How can anyone be sure?

An increasing number of mobile phones are being produced and sold with camera capabilities.

"The convenience factor is very high but the quality and flexibility of digital cameras still far surpass camera phones," said Liz Cutting, senior imaging analyst, The NPD Group.

In 2005, 45 percent of all mobile phones sold in the U.S. were camera phones, up from 26 percent in 2004. Asia followed a very similar trend. Western Europe had a higher incidence of camera phones at 64 percent, and Japan had a much greater adoption rate with more than 90 percent of all mobile phones sold with camera capabilities both in 2004 and 2005.

"Even though there are an increasing number of mobile phones with camera capabilities, people are using them more for spur-of-the-moment picture taking and not for planned events where they are taking along better quality and higher resolution digital cameras," said Knoche.

InfoTrends projects that worldwide camera phone shipments will grow from 233 million units in 2004 to 903 million units in 2010. By 2010, camera phones are expected to account for 87% of all mobile phone handsets shipped.

The primary drivers behind this explosion are improvements in imaging functions (i.e. image sensors, zoom, and auto focus); rapid declines in prices for this functionality; higher speed wireless bandwidth; and easier-to-use handsets, services, and peripherals.

That's 10% of the entire retail market. Not the video game market. In the video game market Wal-Mart has more around 25% market share. That's 1 out of every 4 games sold are sold from Wal-Mart.

So when you think about this in mass numbers Grand Theft Auto: San Andreas (PS2) made 5.1 million. Cut Wal-Mart out of the loop they may have only made 3.8 million.

There was never a question of making this an anti trust case, because it's not. But, that is a huge chuck of sales and no business man is going to tell you to ignore ¼ of you potential market and that is why Wal-Mart is a driving force in the game industry.

Sources:
http://msnbc.msn.com/id/8409492/
http://videogames.yahoo.com/newsarticle?eid=365981 &page=0
http://www.npd.com/press.main.html

"We say that because that's what RIAA is talking about. Yeah, discount places and independent retailers do better, but the AVERAGE PRICE PAID by the AVERAGE CONSUMER still amounts to $18 per."

I take it you're talking about the UK, converted into US $? Here in the USA, prices have been freefalling, and the average price of a new CD was sub-$14 in 2003 and continued to drop in 2004. I haven't seen the 2005 data, but I believe the price is now sub-$13. Living in the USA may suck in many ways, but at least we pay less for music than folks in a lot of countries.

"Regardless, I hardly think charging $13-$15 for a $.50 piece of plastic and a $2.00 package is "affordable" or "reasonable" in cost to expect me to rebuy. If you look at the amounts that 1) the artist makes on each sale and 2) the retailer makes on each sale, it still doesn't approach $13."

It doesn't cost the record company $0.50 to make that CD -- not hardly. The CD/jewel case/booklet is about $1.25, and royalties are $2 - $3. Then, there's the overhead, such as the salaries of the people who helped make the CD happen, but who are not compensated through royalties (just as folks who work at your place of business expect to be paid, such is the case at most record companies). There's also the not insignificant costs of advertising and promotion, and allowances for retailer returns (either damaged or unsold inventory), shipping, price protection, and the squillion other things that make the delta between net and gross a real bitch. As a result, net margins to the record companies on CDs are typically in the 10% - 20% range. That's on the low end of things, as consumer goods go. For example, the last hard drive, keyboard, mouse and monitor you bought likely netted a lot more for the manufacturer than the last CD you bought. And let's not even discuss prepared foods, hygiene products and apparel...

"Guess what? The middleman is ripping you off if you pay more than $10."

Sell-in from disti is about $10, I think. So, if you believe that a retailer should make a single-digit margin, then your statement is correct, but remember that retailers have overhead, too. Not even Amazon is able to get new releases down to $10, because that's typically lower than sell-in. For what it's worth, Amazon has a typical markup of 15%, although that might vary from category to category.

I do agree with you, however, that the "just re-buy it" solution for a damaged CD is one of the most idiotic things I've ever seen.

And, after Googling for a good half-hour and finding NOTHING, I can't help but think that YOUR statistics are about as valid as nex's, although it is fairly difficult to link to nothing for proof.

Not very good at googling are we? Here's a couple sources for ps2 numbers that back the 500/510k numbers besides Wikipedia. Also from NPD directly a story that cites $168m PS2 sales for the first weekend, which is in line with the numbers in the IGN story which say $149m PS2 sales first day. Here's a quick hit that mentions around a million in first weekend sales in Japan, which matches up with the 980k Japan weekend number, which already has a cited source article on Wikipedia you can check out.

A source for 360 sales numbers, for good measure, both Japan (2) and US. Although the US numbers after restating by NPD were a slightly lower 326k, rather than the 332k I mentioned that were in the initial report. Thanks for playing.

By the way, this post took me longer to fomat and type than to google up these links, I'm sure I could find more than just these few if I used a good half-hour for just googling. I'd ask my fifth grade teacher, but after 20-some-odd years, I wonder if he's still even alive?

Rebates are used, Baker says, because unlike regular sales, people perceive them as a one-time opportunity to get a product at a lower price than it would normally be sold at. "You want to make believe that there is a special opportunity here and rebates are the best mechanism for that," he says. They are especially valuable to electronics retailers because they don't scale pricing up and down the way some other retailers do.

The interviewer from TFA interviewed someone from "The NPD Group" which (from http://www.npd.com/about.profile.html ) "provides global consumer and retail information that helps manufacturers and retailers make more informed, fact-based decisions in order to optimize their businesses". Maybe it's me, but that sounds like a retail industry mouthpiece to me.

...Perhaps a company who tells viewers on their front page that they "provide the answers to help you understand your customers and your market" might not be completely impartial with respect to the best interests of those same customers.

Indeed, delving a little deeper into the NPD group website, we see that they claim to "provide global consumer and retail information that helps manufacturers and retailers make more informed, fact-based decisions in order to optimize their businesses." One of the ways they do this is by "Optimizing promotional support." Not to imply that this makes them evil or unethical, but it DOES imply that anything they say isn't exactly coming from consumer advocates.

Interestingly, a google search of their website reveals this site: http://www.npd.com/dynamic/releases/press_041227.h tml "USE THEM OR LOSE THEM: REBATES KEY TO DRIVING TECH SALES"
While they're not exactly sitting around cackling over the fact that not everyone redeems rebates, they do mention this gem:
"While rebates are very popular, the NPD study indicates the redemption process is still a source of frustration for many consumers. The most commonly cited reason for dissatisfaction with rebate programs was "prefer instant cash" (35 percent). Another 25 percent said rebates are "too much work for the money" and 17 percent said they forgot to mail in or go online to redeem their rebates before the expiration deadlines. Additionally, 15 percent said it was difficult to know what to do to redeem rebates and 13 percent said they didn't have enough time to complete and submit the forms necessary to redeem their rebates."

Depending on whether these are all answers to a single question or not, their research indicates 17-30 percent of rebates aren't redeemed. This isn't exactly lost on manufacturers offering them, I assume.

Putting aside the obvious question (who the fuck is The NPD Group? Why, a marketing consultancy!), the guy who talked to the ComputerWorld reporter is full of shit at best ad bald-faced lying at worst.

I should know - I used to manage a service with rebates. (Hence the anon post.) The rebates were only cost effective because of breakage. In fact, we once had to reduce the rebate amount for a particular group of users who had too good a take rate (business users who would send in rebates en masse, for an IT product.) The only way we could tell customers they saved $XXX was because we knew some of them wouldn't turn it in.

If this so-called reporter had asked even one or two sources inside a company that uses rebates, instead of talking to a consultant who probably recommends them for a hefty fee, he would have figured this out.

1. Wal-Mart (1)
2. Best Buy (2)
3. Target (3)
4. Amazon.com (4)
5. FYE (10)
6. Circuit City (Tied for 5)
7. Apple\iTunes (14)
8. Tower Records (Tied for 7)
9. Sam Goody (Tied for 5)
10. Borders (9)

This list has some tough implications for the RIAA and its members. None of the top four companies gets most of its revenue from music. They're all very strong companies used to telling their suppliers what prices they want to see. The classic "record store" chains, Tower and Sam Goody, are falling off the list.

Some of the changes just reflect consolidation in the record store industry. FYE is a classic "record store" chain. It's really Trans World Entertainment, the result of mergers between Wherehouse, Record Town, Camelot Music, and Strawberries. Stores in malls carry the FYE brand ("offering a consistent mall-based retailing experience"), while freestanding stores bear the names Wherehouse Music, Coconuts Music & Movies, Strawberries, Spec's, CD World, Streetside Records and Planet Music.

Also, don't forget that Wal-Mart sells music on-line. Even if the RIAA can bully Apple into raising the song price for iPods, that's not going to work with Wal-Mart. Wal-Mart just won't tolerate suppliers increasing their prices. They'll find other suppliers. Note the growing list of "Wal-Mart exclusives".

In Q3, the top 10 retailers were as follows (note: numbers within parentheses denote retailer unit-sales position in Q3 2004):

1. Wal-Mart (1)
2. Best Buy (2)
3. Target (3)
4. Amazon.com (4)
5. FYE (10)
6. Circuit City (Tied for 5)
7. Apple\iTunes (14)
8. Tower Records (Tied for 7)
9. Sam Goody (Tied for 5)
10. Borders (9)

(and wasn't the original press release 5 days ago?)

1. WinMX (2.1 million)
2. iTunes (1.7 million)
3. LimeWire (1.7 million)
4. Kazaa
5. BearShare
6. Ares Galaxy
7. Napster
8. Morpheus
9. Real Player Store
10. iMesh

http://www.npd.com/dynamic/releases/press_050607.h tml

"If they would just lower the price of individual CDs, down to about $5, I'd buy about 2 a week."

Hmmm.... that'd mean selling into the channel for about $4... that $4 would have to pay for production, manufacturing, royalties, shipping, marketing, unsold inventory, and so on. Not going to happen -- selling at a loss is not a good long-term business strategy. I don't think we're going to get record company or record store employees to give up their salaries, so I wouldn't count on this happening.

"As it stands right now, most albums average $15-20. That's too much."

You're shopping in the wrong stores. The average price of a new CD is $12.95 and falling fast (an older report has a nice graph and some backround info).

"I think they would make up all the profits in sales if they just lowered the price to acceptable levels."

Those $12.95 CDs net between 15% and 25% margin for the retailers and, on average about 20% net margin for the record company. If your theory is correct, cutting those margins in half -- which would take the retail price to about $10 -- would more than double sales. I'm not entirely sure that would be the case... if I want a CD, a $3 delta isn't going to affect my purchase decision. That's about 30 minutes of work at a minimum-wage job.