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RIAA vs The Economy
thumbtack writes "Boycott-RIAA.com is running an analysis
of the RIAA sales vs a number of other large corporations. It was compiled by
Justin
Moore at Duke University. It is really quite interesting, showing the the
RIAA sales are pretty much consistent with the rest of the economy. From the analysis:
I would assert, however that it does make the case in cold, hard numbers that
the RIAA's claim of digital piracy ravaging their sales must be taken with a rather
large grain of salt. The CEOs of Eastman-Kodak are in a nearly identical economic
situation as the RIAA, yet do not have the luxury of blaming digital piracy."
The CEOs of Eastman-Kodak are in a nearly identical economic situation as the RIAA, yet do not have the luxury of blaming digital piracy.
Obviously, they need to add a license agreement to their film products. Just forbid the stuff you don't like to happen, and then you can use every crooked law in the book to sue folks who switch to digital.
I am hated.
I am one of "those" dot commers responsible for screwing up the economy.
This is the attitude I get from a lot of people. Since the crash all the non-tech people I know have taken every oppertunity to take a cheap shot at me, "Ya told you it wouldn't last forever" or my personal favorite, "It's never coming back"
"Bullshit" I say to myself as I try to keep my temper from flaring up.
This type of thinking perme-ates (sp?) our society simply because nobody likes being replaced by younger newer models. This is the way it's been since the dawn of time. Someone makes technology (Castles) and someone else makes a technology that makes the former irrelevent (gunpowder) With both the RIAA and Kodak, it's the same problem. Someone came up with technology that quickly made the foundation of these organizations obselete.
In the case of the RIAA, the combination of internet with Mp3 compression made the old models of music distribution obselete. I worked for a local music magazine for a few years, and often I would hear rockers cry about how Mp3's are sending them all to the poorhouse crying because they can't sell CD's anymore. No matter how many times I would try and tell them website+thawte+oscommerce=mp3 online store they just wouldn't listen because they were all brought up to believe that the RIAA method was the only way. Now apple sells songs 99cents apiece and is making a fortune. With all the money and power the RIAA has, it's a shame they didn't adapt the way apple did and just give their customers what they want.
A good sign of how well CD distribution is dying is the ill fated "Wherehouse" music stores. To my knowledge here in san jose, they are all gone. CD sales just slipped into the toilet and all their stores have just vanished.
Kodak isn't much different. For years they depended on film technology as the cornerstone of their business. By the time they entered digital photography other players had already developed cheaper and more mass producable camera's with higher quality than kodak. I suppose kodak never thought that digital technology would catch up with film, they should have paid closer attention to moores law.
Both companies are old hats, trying to milk every dime out of innovations that are already 100 years old. Let them die already so the new upshots can give us better, faster, cheaper.
P2P is distributing the RIAA's member's works for free to anyone that requests them. You CANNOT compete with someone taking YOUR PRODUCT and giving it away for free.
Hmmm... The RIAA seemed to do pretty good with cassettes that let you copy their product and give it to some one else.
CD burners have been available longer than P2P and don't seem to have hurt them much.
Oh, and the movie industry seems to do allright with video tapes.
The PC game industry seems to have done pretty good against people copying games and giving them away.
People are taking the RIAA's property and giving it away for free without permission, there is no way around this fact, no matter HOW you try and justify it.
Correct. But, as the cases above show it is possible to compete with very inexpensive. Oh, and just like the other cases of this same thing it is not free. Just very inexpensive. The cases mentioned above you still payed for media. With P2P you pay for your internet connection.
There is no justification for stealing, the problem is that a disruptive technology has entered the marketplace, and rather than embrace it as the opportunity it presents RIAA members have decided to try to put the genie back in the bottle. There attempts at embracing the technology have been feeble due to infighting (two subscription services that couldn't share catalogs). Not presenting a product that the consumer wants (subscription services only allow you to play music on your computer). Pricing that was unacceptable $10 a month whether you download music or not.
In the end, it appears Apple may save the music industry from itself by providing the product that people want, at a reasonable price, legally.
1. Many buyers and sellers
2. Low barriers to entry and exit
3. All buyers and sellers are price takers(unable to affect price)
4. Homogenous product/service
And most relevant here:
5. Perfect information
Before people were unable to properly sample a music product before purchasing it, and therefore made their purchasing decision based on incomplete and often misleading information - often by factors that had nothing to do with the quality of the music (hype, etc). File sharing has created near perfect information for consumers, and the results suggest that with this information consumers have decided that they were not getting their money's worth in value. Also, and this has been proven in court, the small number of large recording companys have effectively created a cartel - and have and continue to collude to inflate prices. This behavior is expected in a market with such conditions. How else can one explain the inflated price of music despite obvious and significant efficiencies and cost reductions in the production, distribution, and manufacture of recordings?
So you advocate the artificial creation of scarcity? So the owner of an otherwise non-scarce product can artificially create scarcity so that something that wouldn't otherwise have value has value?
I can understand the artist's desire to make money, but things that are by nature NOT scarce should not and, in the long term, CANNOT be made scarce. Legally or illegally the market will make certain of that.
The owner consumed resources to develop the IP, and it is reasonable for that owner to expect to extract value from that investment.
Many people create IP and don't expect to extract money from it. Many others even invest time and money creating IP *expecting* an ROI and never get it. Just because something requires time to create doesn't automatically mean they are entitled to money. The market decides what any given product (or IP) is worth. If the market has decided that music in its digital form is free then the artists either adapt to that reality by taking advantage of free music distribution to promote themselves, their products, and hopefully score endorsements, or they can find something else to do for a living.
I have yet to see a credible argument that only tangible property has value.
It's not that IP doesn't have value, it's creating artificial scarcity that gets you (or the RIAA, rather) into trouble. Charging $20 for something that costs a buck and for which even $3 should create healthy profits is as much robbery as people getting some free tunes online. You overcharge like that and you're just ASKING for a black market to be formed (file sharing) or asking for someone else to redefine your market (Apple).
The thief can justify it however he or she wants, but the IP has less value after he or she takes it without permission.
Maybe, but if the owner had chosen a price nearer to its NATURAL PRICE the owner would find that fewer people would "pirate" it and, thus, fewer people would lower its value by taking it without permission. In fact, I'd say that piracy is bringing the overall price of music to its NATURAL PRICE. They charge $20 for CDs but lots of people get it for free. Perhaps if you did the math you'd find that averaging the total amount earned and the total amount pirated that the final amount earned was, say, $6 a CD. To me that means that that's the NATURAL PRICE.
Legally or not, all products in a free market WILL find their natural price. Free markets do that.
But in the end, yes, digital distribution will reduce the "value" of music. That's because most of the value has been concentrated in the DISTRIBUTION of music and that's now nearly cost-free. I'm not convinced any of this really affects the artist who generally earns more money from concerts and endorsements than from the sales of their CDs.