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RIAA Almost Down To Pre-Napster Revenues
...they don't have Napster to kick around anymore.
For yesterday's press release, the RIAA commissioned a survey by a research firm to prove that music-downloading is to blame, but all they tell us about it is that "23 percent of surveyed music consumers say they are not buying more music because they are downloading or copying their music for free." No more details provided, no link to the survey's raw numbers. So what does this mean? I guess 77 percent are buying more music because they're downloading it for free?
To put the new sales figures in perspective, a look at the big picture will be helpful. Free music-trading software had been in serious trouble since mid-2000. Despite indications that music-trading was helping sell CDs, the labels forced Napster to implement a name-blocking scheme. We ran a story in March 2001 pointing out that its traffic had fallen by 60%.
Then SF Gate ran a nice story last August, pointing out that declining RIAA sales seemed to mirror Napster downloads:
"At this point last year, with Napster in full swing, record sales were up 8 percent from the previous year. This year, sales of new albums -- not including established catalog titles -- are down 8 percent. That's quite a pendulum swing."
Sure, other file-trading software has taken Napster's place, but at this point it's fun just to watch the industry limp around after shooting itself in the foot.
Not that it's really hurting money-wise. All this week's numbers mean is that the RIAA's total revenue has declined almost to 1998 levels. In 1998 they made $13.71 billion; after peaking in the mid-$14-billions, last year they made $13.74 billion.
This probably is due party to the crummy economy, partly to their failure to find any new sound to co-opt and mainstream recently, and partly to lack of big artists releasing megahits like they did in 1999. You know music officially sucks when the labels have to pay someone $28million not to sing.
Oh, and partly due to the RIAA raising CD prices by $1.16, which is $0.25 over and above inflation (which has been higher than wage growth lately anyway). CDs are 94% of their revenue. Most industries, faced with declining sales, try lowering their prices. Not this one.
I've got two pieces of advice for the RIAA.
The first is to stop pissing off your own artists so much that they blow off the Grammys and throw their own party just to stick it to you. The musicians and singers are the ones making you rich. I know you think they're all interchangeable, but if you alienate them enough, when a new technology gives them an edge, they'll drop you like yesterday's sound.
The second is to reread Robert Heinlein's very first story Life-Line:
"There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary to public interest. This strange doctrine is not supported by statute or common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped, or turned back."
In the UK, CD sales are up Again. Are they going to tell us people don't use P2P systems in the UK now?
Syllable : It's an Operating System
So far this year: Rick Boucher asks the RIAA and IFPI to explain how their copy protection schemes work and raises the question if the copy protection is illegal under Audio Home Recording Act of 1996.
On January 9th, the RIAA lays off 16 employees, including Karen Allen, their "Internet Evangelist"
The Recording Artists Coalition announced fund raising concerts to take place the night before the Grammy's to raise money to fight the recording industry for fair contracts and accounting oversight. The concerts sell out.
The Department of Justice investigation into antitrust issues continues.
The EFF steps up to defend Morpheus as having substantial non-infringing uses.
The Supreme Court decides to hear the case of Eldred vs. Ashcroft (started out as Eldred vs. Reno) to determine if the retroactive Copyright Term Extension Act is constitutional.
The Second District Court of Appeals reinstates the Chambers vs. Warner Brothers Case saying the judge considered evidence he shouldn't have. (this is the watershed case for older artists)
Webcasting rates are set, most likely sending almost every webcaster offline, including non profit and college stations. Rates are retroactive to 1998. The webcasters have 30 days to pay after the rates are adopted.
Suncomm (Media Cloque) and Charley Pride's record label settle the consumer case brought by consumers over "protected CDs", agreeing to clearly label the CD as incompatible with DVD player, Computer CD Players and portable CD players.
Napster Judge Marilyn Hall Patel hands the RIAA a stunning defeat in a surprising turn around, by allowing Napster to do discovery on the copyrights the RIAA says they own, appoints a "Special Master" and gives the RIAA three weeks to prove they own the copyrights and that they are in fact "work for hire". (which the Recording Artists Coalition says they aren't) She also allows discovery on possible misuse of those copyrights to stifle competition to MusicNet and PressPlay.
Filesharing is at an all time high.
The RIAA releases figures showing that CD shipments are down 10.3%, but sales are only down 2.3 % in dollars.
Five songwriters file suit in LA District Court over record club sales and lack of accounting oversight.
California Senator Kevin Murray plans to introduce a bill this year to penalize record labels that purposely underpay royalties, this is in addition to the bill on the 7 year contract limitation. THE EFF and 4 law school clinics launch chillingeffects.org to educate internet users to their rights online.
RIAA forms the California Music Coalition to fight against artists rights. Organizing support from people who are subject to the 7 year contract limitation in CA., the same rights the artists want.
Oh, by the way, one company in that mix controls the majority of concert promotions too (Clear Channel Communications).
One thing to add is that since Cheap Channel bought SFX Entertainment, they've been choking out "competitor" stations for concerts (I work for a Cumulus Media station).
Isn't it in the best interest of the artist to get as much exposure as possible? Too much corporate scandal and politics...we exist FOR the artist..not BECAUSE of the artist.
People are precisely right on CD costs. Whenever you look at a breakdown of the costs on a CD, companies throw in all these extra costs, like marketing/promotion, record company cut, and artists cut....
Here's how the marketing budget is being wasted: 1) On an average of at least once a week, the music shop where I work receives an OVERNIGHTED package of promo materials for us to put up in our store... usually consisting of 1 poster, and usually of someone mostly obscure, or of someone who would not move in sufficient quantity for us to warrant putting up a poster 2) We received probably 3-7 promotional packages a day containing posters, promo flats, giveaway CD samplers, value-adds and other things that cost the store $0, but instead come out of the marketing budget 3) Additionally, we also receive promos of a lot of things that usually go into a nice box to never be heard, or sold to another store for their used stock. All of these materials contribute to your higher CD costs, but you don't even like these bands.
Another question that's been on my mind for a while is: Well, once the CD has gone out of its initial print run, why don't prices drop because they don't need to promote it anymore, it's part of the back-catalog then? Well, not really... manufacturers are more keen on cutting-out and dropping from the catalog older releases by an artist rather than moving them to mid-price.
And one more thing: There are great artists out there on nice independent labels that know how to manage their money and don't squander it on useless promotion nor to line the executive's pockets. Case in point: The White Stripes, on Detroit's Sympathy for the Record Industry label... Releases ~$13, excellent rock reminiscent of early Zeppelin... Hell, there are a whole litany of these artists featured in Coalition of Independent Music Stores stores... find your local store at www.cimsmusic.com
"Defenestration" is to throw out of a window; what's a word for throwing 'Windows' out of something?
While you got a funny moderation, actually it's the truth...Ask your parents or even your grandparents what music they like or was their favorite when they were your age. Then do a search on your favorite filesharing program. Keep it to one of the simple to operate clients such as Morpheus. You will find the music they told you about. Now, I hardly think that the "average" filesharer whos ripping Korn, Dave Matthews, U2, or Britney for that matter, is ripping Tony Bennett, Engelbert Humperdink or Wayne Newton, Tommy Dorsey, or Bing Crosby to MP3 or any other format.
46% off all filesharers are over 35, and 18% are over 45.
What is interesting is the market data that can be gleaned from those two seemingly innocuous numbers. These are people with an income and that have disposable income to spend. The conclusion has to be reached that the market is not meeting the needs of the consumer, and they find a way to meet those wants and desires.