File Sharing and CD Sales, Again

Andrew Leonard writes "Stan Liebowitz, an economist studying the effects of file-trading on the music industry, says in an article in Salon that new numbers have convinced him that the decline in CD sales may be partially attributable to MP3 downloading. But he also argues that the decline does not justify draconian new laws."

Comments

Obviously there is some mistake

[Anonymous Coward]

According to this well written story, music sharing actually increases music sales.

This Stan Liebowitz person is probably some guy trying to make a name for himself by stirring up trouble on Slashdot. Let's not give him the satisfaction!

Bullshit

[AntiTuX]

I don't know, but I've been listening to this debate for a while.

I can tell you one thing, and this is just my opinion: Most of the music that's been put out in the industry in the last 3 years has been absolute shit. I think pretty much everyone can agree that the shit-to-good-music ratio has definitely changed. I *RARELY* buy cd's. I also go to live events. mostly because of the fact I'm in the electronic music culture, and it's easy to find (at least in the bay area, california) good djs playing good songs. I turn on MTV, and I'm almost offended of all the absolute crap I see. All these polished, produced, bubble gum pop groups, who, in my opinion, suck hardcore ass. It sucks, alot.

I also don't "steal mp3's". I've got better things to do with my time than go out and try to download some song off of a website that'll probably only be up for about a week before being shut down by the RIAA. I used to use napster, but it was to listen to albums so I could judge whether I wanted to buy them or not. When napster was still around, the music wasn't *QUITE* as shitty as it is now.

Anyhow, that's just my rant. I'm going to an "electronic music concert"(read: a real rave, bolt cutters and all) here in a few minutes. I'm going to spend my time this weekend listening to great music, and hanging out with great people.

I just hope that things get better.

Re:Obviously, it does affect CD sales to SOME exte

[GiMP]

> You're always going to have the fellow who likes
> to support artists, and buys original CDs. Catch?
> He now listens to MP3s to sample new albums. He
> doesn't like the sample...he doesn't buy the CD.

This would certainly be me, as are many others.. yes, it decreases sales... but none less then the radio has. The difference is that with the internet, the quality is a little better and you can avoid commercials.

There is also a 4rd group, like my sisters.. they buy the CDs, but download the mp3s because they aren't knowledgable enough to rip & encode their own.

The only sad thing is that there are some who abuse the power and never buy the cds.

Might it possibly be....?

[Newer Guy]

That I and millions of others like me have decided to boycott the RIAA?
Hmmm?

Might we be sick and tired of their power plays and their intrusions into our personal lives?
Hmmmm?

Might we be sick and tired of being called criminals by them?
Hmmm?

Could we be tired of ther inane music they've been producing the past few years?
Hmmm?

Well, My Leibowitz...what do you think??

Re:Might it possibly be....?

[io333]

Boycott? What Boycott? I don't need a boycott. If there were a good CD out there, I'd buy it. I havn't bought a CD in two years. I'm still waiting.

Somethings missing....

[Anonymous Coward]

Whenever I see some report on mp3s and CD sales, I always wonder...

Is reducing a company's profit a crime?

Re:Obviously, it does affect CD sales to SOME exte

[Russellkhan]

You're always going to have the normal guy who doesn't care about "branded" CDs or the slight (and sometimes perceptible) quality loss of MP3s over CDs...he goes ahead and burns his MP3s to a 5-cent CDR and listens to it anyway.

There's also the guy who uses MP3s to sample new albums but wasn't falling for the "CD as a sample" trap before - he just wouldn't buy a new album if he didn't know it - he'd wait until perhaps he got a chance to hear it as a friend's place, or just do without. This guy actually buy more CDs since MP3s have come along.

Are there enough of these guys to balance the others? I don't know, but there are definitely enough that they shouldn't be ignored as a part of the market.

Russ

Your missing a point...

[Llywelyn]

Also bear in mind that said person samples by downloading an mp3, and purchases something that he would not choose to purchase otherwise.

Since mp3s hit the scenes, my CD purchases have gone *up*. This is not a unique situation: most of my friends are in the same boat, as well as several studies I have seen on this effect.

When we think about how this may or may not affect the music industry negatively, don't forget the positive effects as well as the negative.

Soon-to-be author changes conclusions again

[guttentag]

University of Dallas economist Stan Liebowitz, author of an upcoming book (set for publication Sept. 7) titled "Rethinking the Network Economy," is digging hard for quantitative answers.

In May, Liebowitz published a paper suggesting that the record industry would soon be seriously harmed by MP3s. But in June, by the time Salon caught up with him, he was questioning his own conclusions after having examined the numbers and finding little solid proof that file sharing was hurting CD sales.

Two months later, he's changed his mind again.

As an economist, Liebowitz knows as well as anyone how to sell a book:

1. Examine a controversial issue the perspective of your expertise (it helps if one side of the issue is backed by a very wealthy cast of characters who will do anything to promote their side)
2. Announce that you will be writing the book
3. Announce that you have found "evidence" in favor of one side
4. Announce you were wrong and that you now have evidence to support the other side
5. Change your mind again, announcing that further information has revealed that your first conclusions were correct, just two weeks before the book is published.
6. Now everyone wants to read your book to find out if they've been vindicated.

He studied 30 years of record sales data, and in the three months prior to the publishing of his book, he has found "new evidence" that caused him to fundamentally reverse himself twice? If this guy publishes a book on how to sell books, I might read it, but I won't be reading this one. Who's to say he won't change his mind again in October when he needs the cas^H^H^H^H^H^H^H^H^H^H^H^H^H finds new evidence?

No, "music from yesterday isn't available"

[tlambert]

No, in fact, music from yesterday *isn't* available for purchase these days, even from Amazon.

As one example, I still can't buy Isao Tomita's "Bolero" album on CD. You can get "Bolero" itself as a single track of a collection (who would want 10 different versions of the same song, just to get the one you wanted?!?), but you don't get "The Mother Goose Suite", "Daphnis and Chloe: Suite No. 2", or "Pavan for a Dead Princess".

As another, I can't get a "Baltimora" album, except as used vinyl (if then); the only thing available on CD is one song, "Tarzan Boy" (good tune, but ruined by the "Listerine" commercial), and it's only available on "Beverly Hills Ninja" or in some *LAME* 80's dance collection (two exceptions: a cover band, and an "Italo" Italian dance CD sold in the U.S.: a *LAME* non-80's dance collection).

Frankly, I'm amaze that "Buffalo Springfield" or Harry Nilsson is available (incredibly hard to find, though).

-- Terry

The following things (might) affect CD sales:

[LX.onesizebigger]

• (Insanely) increased CD prices
  • If the general price inflation had followed that of CDs, a Big Mac would cost ten bucks. Do they seriously expect people to pay any price?
• Weaker economy
  • Consumers have less money to spend. They're spending less money on luxury goods. Imagine that! Macroeconomics 101!
• Wider range of (increasingly expensive) consumer products
  • Kids and teenagers (the most important targets for the music industry) have more expensive versions of earlier inventions to spend their money on these days (such as DVDs instead of video cassettes and more advanced video games that cost more). Not only that, but they have a whole range of new products, such as cell phones (which is a permanent cost if it is actually used). It is not surprising that CDs are taking a smaller share of the cake. The RIAA giants should not be so worried though, since the companies that take the other parts of the cake are generally in the same conglomerates.
• Realization that the CD format is trash
  • The CD format is a digitized format. The CD format is larger than it needs to be. Reading a CD requires moving parts. CDs scratch easily. CDs are fragile. CD cases are even more fragile. Most importantly though, CDs decay in quality. This is starting to become noticeable now that the format has been around for a while. People are realizing all of this. Is it so surprising that they are turning their backs on such a poorly executed product?
• Music quality
  • Culture feeds culture, and lack of creativity is also contagious. A stunning amount of people today agree that the music produced right now is pure trash. In this case, the music industry has shot itself in the foot by turning music into a sterile factory produced product. Real music cannot be rationalized; the production of it cannot be attained in an optimized-efficiency environment.
• Radio
  • In an extension of the previous point: when all music is generated according to an engineered formula and the music industry has molded the population into accepting only one kind of music, radio stations can easily cover the simplistic taste in music of the population while serving them the most recent hits. What need is there then for a CD that will be outdated with the next updated release of Britney 2.01?

Audio CD's too expensive for what you get

[MtViewGuy]

I think the biggest problem is the fact in terms of bang for the buck, the audio CD is losing big time.

Think about it for these reasons:

1) Today's videogame consoles cost between US$150 and US$200, but many games give you 30 to 60 hours of fun to play all the way through; in the case of sports games (like the excellent Madden NFL 2003), it's even longer than that. It's that time you spend on the game that makes the relative high cost of a game (around US$40 to US$50) still a pretty good bargain.

2) The DVD has also become a major bargain; you can get pretty good console players for under US$100, and the price of DVD discs (US$20 to US$30 for the latest releases, frequently under US$15 for the older releases) are a bargain considering the content of what you get. The MPAA (despite what people here on /. think about their anti-piracy policies) realized that the sell-through model for video distribution pioneered by Disney works extremely well, hence the reason why DVD's are still reasonably priced for what you get. Small wonder why many movies that didn't quite make their money back in theatrical release are making it back in video release.

Re:Treat sharing as promotion and reward sales

[Reziac]

Here is the new model, which is already working for some artists (particularly small local bands):

1) Record an album, using completely independent producers and recording facilities.
2) Release the entire album as MP3s, on your own website. (Or save yourself bandwidth, and release it to some P2P network, with an id3 comment tag that points at your site, making it easy for filesharers to find you.)
3) Make it REAL easy, and inexpensive, for anyone who visits your site to buy the CD.
4) Profit.

You will notice that nowhere in this scenario does a dime go to the RIAA. And *that* is exactly WHY the RIAA (and the MPAA, tho independent film production takes a lot more horsepower and know-how than independent album production) is trying to stomp out MP3s in particular and filesharing in general: when the artist discovers that the MP3 is a better promotional tool than the RIAA machine, the consequent shift in production/release methods cuts the RIAA out of the financial loop.

Yet if the RIAA had a clue, they could be jumping on this bandwagon and adding to their own profits. In particular, it would boost sales of marginal artists that they now [claim to] lose money on.

Re:Lousy Artists and Pissed off Public

[Anonymous Coward]

Exactly! Label these day are only looking for what's popular already and most of the time they don't take the chance to sing new artist that aren't part of the already "winning" formula so every artist on radio these day sound the same. And that's why I'm more into the underground scene and I visit site like mp3.com to dicover new unsigned band that as something new and goot to offer and it's not rare I'll order cd from them!(they're a lot cheaper than those you get at the store and you know your money goes to the artist) And these artist without mp3 wouldn't be able to be known by people out of their area.

*sorry for my bad english*