Slashdot Mirror
Six Giant Music Retailers Will Try Online Sales Together
PingXao writes "The New York Times is reporting that several music retailers are banding together to test online sales. Sad to see the article's author flat-out claim that '... a proliferation of free music-swapping services on the Internet has led to a decline in CD sales.' The retailers are starting to get a clue but still have a long way to go as evidenced by 'Recording companies make the music...' and 'We are in the customer relationship business.'"
Any bets that this will be crippleware music with heavy DRM locks?
And then it will fail? I surely could do without this crap.
When the Pressplay 6 month, $30 subscription deal came up I thought I'd test the waters of legal music d/ling. And what it showed me is that anything the RIAA signs off on is going to be a complete fraud, a waste of money, and ultimately a failure. They can stop blaming Kazaa, their own suits have cost them more money than trading ever could.
6 Retailers Plan Venture to Sell Music on the Web
By LAURA M. HOLSON
LOS ANGELES, Jan. 26 -- Six of the largest music retailers plan to announce on Monday that they are joining forces to sell music that can be downloaded from the Web.
The retailing group, called Echo, consists of Best Buy, the nation's No. 1 electronics retailer; Tower Records; the Virgin Entertainment Group; Wherehouse Entertainment; Hastings Entertainment; and Trans World Entertainment, which operates the FYE store chain. The six retail companies will each own an equity stake in Echo that together will make them majority owners.
The new effort is motivated in part by the two-year decline in compact disc sales that has forced recording companies to cut costs and lay off employees and has damaged music retailers, too. Wherehouse Entertainment, for one, announced last week that it was filing for bankruptcy protection from its creditors, in part because of lackluster CD sales. And earlier this month, Best Buy announced that it would close 107 stores.
Like the recording companies, music retailers are searching for new sources of revenue. Vinyl albums and cassette tapes have nearly disappeared in recent years, leaving retailers with the CD as their main option for selling music. But a proliferation of free music-swapping services on the Internet has led to a decline in CD sales. According to Nielsen SoundScan, which tracks album sales, 681 million were sold in 2002, down from 785 million in 2000.
"Obviously, there has been a lot of talk in the last three years and there have been a lot of failures," said Dan Hart, the chief executive of Echo, referring to earlier attempts by legitimate Web sites to sell music online. "But we see this as an inflection point. Retailers are saying, `This is the time to do it.' "
Mr. Hart said that Echo hoped to get licenses from the recording companies to distribute their music through the retail chains' own Web sites. In November, the Universal Music Group, which is owned by Vivendi Universal, began to distribute 43,000 of its songs through major retail and music Web sites, like Best Buy and Circuit City, for 99 cents a song or $9.99 an album. That total has since grown to 60,000.
Liquid Audio, a company that has developed technology meant to allow the secure sale of music online, has rights to 350,000 songs for downloading, but also has deep financial problems. The company agreed last week to sell some of its assets to the music distributor Anderson Merchandisers for $3.2 million as part of its liquidation.
Anderson, which is the music distributor for Wal-Mart Stores, also wants to be a distributor of downloadable music in retail outlets. That could eventually put Anderson in competition with Echo, but Mr. Hart said Echo was not opposed to working with Anderson.
In fact, Mr. Hart said he expected the pressures facing all parts of the music businesses -- including distributors, retailers and recording companies -- to motivate them all to work together to find a viable alternative to piracy. "People are saying, `Let's make it work on a real level,' " he said.
Such cooperation in online music ventures would have been unthinkable two years ago as retailers and music companies were at odds about how to best approach online music sales. More than a years ago, music labels embarked on their own online efforts, but so far they have received less than rave reviews.
Now, though, the music companies and the retailers need each other more than ever. Recording companies make the music, but it is retailers who know their customers. "Retail has always been about more than simply selling CD's," said Jerry Comstock, the chief executive of Wherehouse Entertainment. "We are in the customer relationship business."
Under Echo's plan, once the group received the necessary licenses, the partners would market their services together and separately. Efforts might include promotions like "Buy a compact disc, get a free download." The retailers could also enable customers to download music in stores using portable devices, like the Apple iPod. "No one has really marketed these services," Mr. Hart of Echo said.
But some analysts suggest that no matter how much creative and marketing muscle is behind such efforts, they will not catch on unless the music is priced right. The average cost of a compact disc, according to the Recording Industry Association of America, the lobbying group which represents recording companies, is $14.21. Many critics say that is expensive when compared with other media, like DVD's, which offer loads of extra features and programming.
"Any opportunity retailers have to find additional revenue in a time of falling sales is a positive," said Michael Nathanson, an analyst at Sanford C. Bernstein. "Yet we continue to think that pricing has to come down to get pirates off of the free sites and onto legitimate ones."
"BSD: Free as in speech. Linux: Free as in beer. Windows 10: Free as in herpes." --Man On Pink Corner in #52607549.
If you took a whole bunch of airplane parts and all the Boeing engineers and put them in a room, the result would not be an airplane, because the Boeing company and the things it does in the way of managing/coordinating/research are indeed necessary for the production of airplanes.
If you took a whole bunch of signed recording artists, and left them in a room with the appropriate tools, the result *would* be music, because the marketing/distribution/hyping done by record companies is *not* necessary for the production of music.
At one point, perhaps the record corps were necessary for distribution, but now that physical media are not necessary, it's harder to make that case. They certainly aren't necessary in the way that Boeing are necessary for airplanes, anyway.
Whence? Hence. Whither? Thither.
That sort of perception is the problem. The recording industry is a delivery medium, not a means to an end. The way things have evolved, yes they do produce the music, but its been my opinion and most likely, the opinion of others that the quality of said music has degraded to the point that it can be attributed to the decrease of record sales for the past 3 or so years.
Suits should stick to business, musicians will stick to music and as such, should be the music makers. If the music industry isn't very obviously a monopoly to you or anyone else at this point, then you haven't spent enough time realizing the impact they've had.
Hades, PoD: Official Advocate
You must be new here.
The submitter just assumed you've kept up with the recent revelations that sales PER ALBUM increased. The losses are a direct result of the companies releasing less albums.
Never confuse volume with power.
Boeing hires people to design, prototype and build planes. People do not design planes and go to Boeing to have them produced.
The music industry is starting to create bands (Britney, backstreet boys, Milli Vanilli...) with music made by unattractive artists and lip-synched by pretty artists, but they do not create music.
The music industry looks for people who are already producing music. They take what they find, pretty it up a little, package it and flog it to the masses.
Marketing has more value than content creation in America. Just ask the near-bankrupt contract company that manufactures hardware that M$ stamps a brand on. The brand stamping is a major cash cow for M$, the production company is in the red.
You got me into this! You were the ideologue! I'm only a poor assassin! - Twenty evocations, Bruce Sterling
...Because on one hand, the amount of actually release went DOWN. So yes, if you put out less stuff, chances are you will sell less. It's been on /. with the RIAA numbers fuding articles of prior months after the hacking attempts.
If p2p programs are causing less sales, it's probably not from the overt "They are stealing music" reasons.
As somebody noted above, more than likely, people aren't falling into the one song album trap anymore and are becoming better shoppers for their dollar. People go and try out a few songs of an upcoming album, realize it's SHIT and then don't buy it. Caveat Emptor taking to the digital age.
I'm sure many of us download a few albums, find one that really speaks to you and rush out to buy it. I've done it many times and I'm sure many, many people have done the same thing. I'm betting for some artists, the p2p trading has generated them more buzz than if they had to have a record company pay to promote them.
My advice to the RIAA would be to maybe invest in finding better musicians and making cd production and distribution cheaper than it is now so cds can be 9.99 instead of 18.99, while still giving the artist his same meager cut :[.
Raunchy
The retailers are starting to get a clue but still have a long way to go as evidenced by 'Recording companies make the music...' and 'We are in the customer relationship business.'"
The silly demonizing of the record companies is really getting counter productive. In a strict sense, of course, the recording companies don't "make" the music (of course the artists do, but under contract), just like software companies don't "make" the software (their programmers do, under contract), and just like home-building companies don't "make" the homes (the construction workers do also under employment contract).
But it is a useful shorthand to say all of the above. Without the record companies the vast majority of songs that get traded so happily on P2P networks would never have made it to rippable CDs in the first place (as an aside, I always found the usage of the term "rip" in this context to be somewhat revealing).
And the poster's implied distinction between the record companies and the people who "made" the music suggests that the artists are uniformly against the record companies and their efforts in this area. P2P advocates are being flat-out chauvinistic if they think that all artists - or maybe even a majority - disagree with the RIAA's stands. It irks me when I see a few artists' views trotted out with the implicit assumption that their views are representative...what's the real big picture ?
To be sure, there is a vocal group, but I wonder whether they're getting disproportionate press precisely because they're arguing something more controversial - you never hear about Metallica complaining about P2P anymore, because it's just boring and it seems obvious.
Has anyone conducted polls of major artists to see where they stand and how they feel about the RIAA ? I'm not talking about disenfranchised had-their-day-in-the-sun-more-than-a-decade-ago artists (*cough*Janis Ian*cough*) and I'm not talking about little independent artists who probably secretly would *love* to get a big record deal if they could - what about a survey of artists in the Billboard 100, or artists with the best selling CDs in the last 10 years, or the top 100 artists traded on Kazaa/Gnutella...or some other reasonably objective criteria that defines a sample of artists under contract to record companies represented by theRIAA ?
What is needed here is hard, representative statistics, not agenda-laden anecdotes that fit whatever story happens to be convenient with the story-teller's philosophy.
"According to Nielsen SoundScan, which tracks album sales, 681 million were sold in 2002, down from 785 million in 2000."
Well gee, it's not exactly like everyone else had a record year in 2002. I own a deli, and sales were down almost 30% last year over 2001. I'm likely going to have to sell the place or close it down within the next few months, but you don't see me whining to everyone in sight that things aren't going my way.
People can't "pirate" subs, gyros, or muffulettas. There is one thing and one thing only to blame for the fact that I'm almost out of business: the economy. People aren't spending the money to eat out every day, and companies are cutting back on their catered staff meetings/conferences/parties.
When nobody has any money, sales are going to decline! Get over it, Record Industry! The "piracy" argument is overplayed at best - just like everything else the RIAA pumps out - and at worst it's a red herring.
I also think the comparison of 2002 sales vs 2000 sales is a bit misleading. Things have changed a lot in this country since 2000.
There is a convincing piece by Damien Cave on Salon.com titled "File Sharing: Innocent Until Proven Guilty" which argues that there is no proven correlation between downloaded music and the decline in CD sales. He continues to argue in "File Sharing: Guilty As Charged?" that a good deal of the 'sky is falling' rhetoric created by the record companies and the RIAA is based on supposition and self-interest. In addition, the article "RIAA's Statistics Don't Add Up To Piracy" analyzes the RIAA's own statistics and argues that they do not support the RIAA's conclusion that downloaded music is the cause for the decline in CD sales. In this detailed analysis, George Ziemann argues that the record industry released 11,900 fewer titles in 2000 than it released in 1999, a 25% decrease, yet the total number of units shipped decreased only 10.3% and the dollar value of these units fell by only 4.1%. It seems that the RIAA is misinterpreting its own statistics.
Also, the record companies just settled a price fixing suit in which they admitted they were overcharging consumers. This point seems to be overlooked by the RIAA in its attempt to place all blame for the woes of the music business at the feet of mp3's. Is it possible that the decrease in CD sales is related to the conspiracy by the major record labels to inflate prices?
I don't know much about the roots of Led Zepplin and Eminem, but I am a huge Beatles fan. And I'll tell you this, record companies had a lot to do with us not getting the Beatles sooner.
They received countless rejections, including the one from Decca that famously said "We don't like their sound, and guitar music is on the way out". And once they did make it big, Capitol Records still felt they needed to rearrange their albums to make them more palatable to the American public.
The biggest reasons for The Beatles making it big was their pure, raw talent, plus their strong drive to be the toppermost of the poppermost because they believed they were the "best fucking group in the god-damned world". And Brian Epstein definitely had a lot to do with their breaking through to superstardom too.
I used to feel at least a small pang of guilt when listening to downloaded music - if I like it, I feel like I should give the musician something back somehow.
... and if I buy they will conclude that their strategies worked...
Nowadays, with the recording companies trying to force me into buying worse products at higher prices (now there's a way of competing you won't learn in school!) I'm getting so annoyed that I *really* don't want to buy anything. If I do, some of my money will go into things like crappy CD's and lawsuits, which I don't want to support.
It's becoming a political statement for me not to buy CD's or copy protected music. At least not at full price.
And that will of course make the record companies think there's even more DL'ing going on, with more efforts on their part to stop me
Strangely, it seems like we'll both loose. They won't get my money and I won't get the music that I want. Oh bummer. What's needed is a new business idea, where the middleman is either gone or doing something else.
From the editorial: The NET Act works in two ways: In general, violations are punishable by one year in prison, if the total value of the files exceeds $1,000; or, if the value tops $2,500, not more than five years in prison. Also, if someone logs on to a file-trading network and shares even one MP3 file without permission in "expectation" that others will do the same, full criminal penalties kick in automatically.
I remember purchasing music from cdnow thinking i was getting an mp3 file i could later burn to a cd, only to find out (after the fact) the music was in this liquid audio format where the "recommended" player was liquid audio player (which i believe was the only player). It also claimed the song was only playable from 1 computer and was crippled in such a way that I had to do an analog rip of the song from one of my computers to the other. My point is that if they are going to be successful they have to be MORE convenient that file sharing programs. And not just by having easily downloadable mp3s, but an easier interface, more reliability, and faster downloads, etc...
Your eloquently stated opinions intrigue me. Please subscribe me to your newsletter.
Lawyer for the prosecution: We realize, your honour, that the defendent's illegal file sharing totalled only $1,206.59, but we intend to prove that this is, in fact, equivalent to $2,892.61 in price-fixed-- ahem, value-added RIAA products, and therefore request the greater sentence....