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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."
You're always going to have the unethical/innocent geek kid who downloads an MP3 and listens only to it since his PC, MP3 player and PDA are the only things he uses for listening to music.
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.
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. Whereas earlier he would be stuck with the CD as a sample (no CD returns!), he is now a "loss" to the music company.
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??
The problem is not copying, the problem is paying the creators for their work.
Historically, some companies have tried to solve this problem using various techniques (publishing, advances, royalty payments, advertising-supported broadcasting, pledge drives). All of these are predicated on economies of scale for large runs, and high costs of entry for competitors.
When a new technology comes along that changes these economics, it is time to look for a new model to solve the underlying problem, not construct a technical and legislative framework to restore the old barriers.
Stan Liebowitz, author of an upcoming book (set for publication Sept. 7) titled "Rethinking the Network Economy," is digging hard for quantitative answers.
So, not looking for free publicity to boost book sales then.
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
So, this respected researcher has changed his mind three times in 4 months . Perhaps he should think and formulate a well conceived, intelligent opinion before opening his mouth next time - is this guy the salon version of the first post trolls ?
You don't publish a paper, then change your mind about your own conclusions less than a month later, then change your mind yet again, and expect to be taken seriously.
If it were the case that there was a 9.8 percent drop on albums, when you look at the historical record of the ups and downs of the CD industry, [that's] a bigger decline than we've seen in 30 years. It starts to look unusual.
Except, that a) we're in a recession, b) teenage disposable income is now spilt between DVDs, Games and CDs c) bland mass appeal music always sees a drop in sales - see the RIAA's "Home taping is killing music" campaign in the late disco, pre punk era.
If he thinks the drop is unusual then he isn't checking his historical data correctly. In addition, how can he explain the INCREASE in CD sales in the UK last year ? We have Napster too yer know.
It's really amazing how (CD) prices have tracked so closely with inflation. It's almost as if the industry just bumps up prices with the inflation rate
No shit Sherlock...
[What is clear is that] there's no evidence in the data that the tapes caused a decline.
MP3s wouldn't do the same thing. The reason cassettes led to growth was that before cassettes existed, you didn't have portable music. You couldn't play recorded music in your car, and you couldn't play it walking around, in a Walkman. It was the little cassette that basically allowed you to do that. To be technically correct, there were 8- track players prior to cassettes. But they didn't have quite the same penetration. My theory as to what went on is that [the rise in cassettes] coincides almost perfectly with the penetration rate of the portable, Walkman-type of thing. So it opened up this whole new market, which overwhelmed any copying that went on.
Oh dear.
Well 1) Most people didn't have recordable 8 tracks, so no, the 8 track WASN'T the same as musiccassettes. 2)We have new mediums now, such as the MP3 player, so according to your "theory" that should overwhelm any copying.
If people bought albums in the 80's specifically for the purpose of taping them for their new toy the walkman, then isn't the same going to happen now ? We should see an increase in up tempo running/jogging music, with the advent of solid state MP3 players which are finally immune to jumping, skipping and damage from violent movement.
So, either I'm going to see lots of hard cord techno stars from Germany and the UK become millionares as their record sales boom, or I'm going to see you change your mind about your pet theories yet again, probably just in time for the official release of your book.
Did Stan escape from Dallas University's, locked room, infinite monkeys on typewriters experiment ?
It has become appallingly obvious that our technology has exceeded our humanity. --Albert Einstein
You need 1) a time machine, 2) ability to access to the many-worlds multiverse, and 3) access to the album sale data.
Just set your time machine back to sometime before Fanning writes the first Napster code. Then, choose a universe where he falls madly in love with a lovely blonde, and gets rid of "that stupid computer" at her request. Monitor CD sales for the next couple of years.
Next, choose the current universe (or maybe one exactly like this one, except where nobody thought of this experiment, just in case there's some weird time looping feedback thing going on). Monitor CD sales for the same period.
Then, you'll be able to say if Napster and file sharing affected the music industry, all other things being equal.
I swear, I bet these so-called "economists" can't even change the gravitational constant of the universe!
- 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)
- Announce that you will be writing the book
- Announce that you have found "evidence" in favor of one side
- Announce you were wrong and that you now have evidence to support the other side
- Change your mind again, announcing that further information has revealed that your first conclusions were correct, just two weeks before the book is published.
- 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?BEFORE Napster hit the scene, I got a Memorex 1622 CD-RW drive (Amazingly, they're also the subject of a major class action law suit at the moment...) and used it to burn copies of EVERYTHING for all my friends.
It still all revolves around CD burners. Take the current MP3 situation and subtract being able to burn CDs. Sure, there's portable MP3 players, but the REAL album-purchase-killer is being able to actually have that shiny disc with the music on it in your hot little hands. Most of my friends who aren't interested in computers know that us computer geeks can burn CDs and won't hesitate to ask for a copy of the latest albums or songs they can't get out of their head.
Do you actually tell your friends that they have to go out and spend money on something you can burn for them on an inexpensive blank CD? "Come on, you're supposed to be my friend... Help me out here." Unlike home taping of the past, CD-RW drives have become VERY fast as of late... A C90 tape actually took 45 minutes per side (yes, it had to be flipped) to record, a 40X CD-RW can burn an entire CD in less than 8. CPUs have become much faster as well. It's become a whole lot easier to fire up your CD-R mastering software in the background and burn CDs while you're say, reading Slashdot.
When a friend asked for a copy of a tape, it meant rewinding, analog distortion, getting the levels right, and FLIPPING THE DAMN TAPE. Burning is just a blank CD and a few clicks away.
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Siggy, siggy, siggy, can't you see? Sometimes your puns just irritate me.
It seems to be that the Slashdot-Correct way of thinking is to say that the music distributers brought these problems on themselves. But I don't think they're entirely to blame. Cheap bastards like me have something to do with it as well.
I don't mind admitting that these days I only go out to buy a CD if, after arsing around with gnutella for a day or two, I still haven't found it. If there was a "perfect" file sharing network, I'd never buy a CD again.
You might say, "you do this because CDs are overprized" (even more true here in the Netherlands than in most other parts of the world). To which my honest reply would have to be, "if CD prizes were cut by 50%, I would only cut the time I spend trying to find one on the net by 50% before giving up and buying it".
My bottom line is, if p2p networks worked perfectly, I'd never pay for music, regardless of how reasonable the price might be.
(12) Federal Trade Commission finding the Recording industry cartel anti-competitve and engaged in illegal price-fixing.
That is EXACTLY the problem we're still facing in the record industry. I believe it's high time the Antitrust Division of the DoJ go after the RIAA and force them to lower album-length audio CD prices to around US$11 per disc; the current US$18 per disc price is at a point where there is just too much economic incentive to pirate music. A good comparison is OPEC; in the late 1970's they raised prices so high that people were either reducing oil consumption and/or looking for alternate sources of oil. By 1986, OPEC was in dire straits due to economic realities catching up with them.
Compare this against the movie industry. The fact that new-release DVD movies are between US$20 to US$30 per release set is extremely reasonable, especially when you consider new releases often contain a plethora of extra features in regards to the movie. And you can often get older movie releases for under US$15. At these prices, there is no real incentive in making a pirate copy DVD, to say the least.