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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."
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.
You don't understand, the economy went down so quickly, it was like the equivalent of going out of business 5-6 times.
Yeah, Eastman-Kodak blames Digital Photography instead.
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.
Does this mean that the RIAA might be exaggerating other things? I mean, I know that every CD-ROM sale is used to pirate music, and that nobody uses them to back up documents/data/desktops/send information that's too big for a floppy or email.
Or that people are downloading 1,000,000 songs a week illegally over their T3 Internet connections and getting the full version of the albums after connecting for 60 hours a week and not going to job/school.
I mean, if you can't trust the RIAA, then who can you trust?
52 Weeks, 52 Religions with John Hummel
I don't know if Eastman-Kodak's financial situation is a good marker for economic trends. I think a great portion of their market has faced the invasion of digital photography which is certainly cuts their consumer film sales down significantly. Their economic situation may be due partially because of the economy, but also partially to an emerging technology that they is taking away some of their marketshare.
Nothing from nowhere I'm no one at all
http://news.bbc.co.uk/2/hi/business/1999556.stm
of course this has nothing to do with the fact that the public is tired of being ripped off and taken for idiots and now is not interested in their products.
so instead of creating products that people actually want or investing in talent instead of boy bands and the like, they blame their outdated buisness model on piracy, sounds like sense to me.
are you smiling yet ?
Socialist Eurocunt? I saw them open up for Underworld once, they fucking rock.
Finally, math books without any of that base 6 crap in them.
I wonder what the historical relationship between the economy and low-end entertainment (movies, CDs, similar) is? Is the entertainment industry recession-resistant? I know during the 1929 depression it wasn't, but since then?
I'm no fan of stealing, but hard times is certainly an excuse people use (should I say justification?).
I keep hoping that some well-run online song-for-song "rights buying" project comes up, maybe subscribing to a whole catalog? Verification is a problem, but I personally would pay a moderate amount for downloadable music, especially on a song-by-song basis.
I recognize both the interests of the artists and the argument that the industry rips off both the artist and the customer.
I suppose this is going to be another long, drawn-out social drama, especially with politicians involved.
Yeah, I've got a couple Eminem MP3s here, I've been duplicating them over and over. I figure I've got 200 copies on my HD right now. That'll show 'em.
I'm gonna burn each one onto a CDR 10-15 times, I figure he'll be broke by the time I run out of blanks.
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.
I'm a frequent traveller to various countries in Asia for both business and personal trips, and I frequently encounter vendors of pirated movies, music, and software, and partook in buying their wares (warez?). Now, if one wanted to take a moral absolute, all of us should really be branded as hypocrites... But is piracy totally evil, without justification? Just like Communism, for example, a lot of people in the West seem to have a one-sided, black and white viewpoint of something which is a complicated issue.
As an example, look at many countries in East Asia -- piracy, for all its evils, helps build a base of demand for your products and fuels the sales of hardware, without which your stuff is useless anyhow.
What do I mean? There needs to be a established base of music listeners/movie viewers/software users and owners of hardware, like CD players, etc first. Without evil piracy, sales of PCs/CD/DVD players in Asia would have been much less than what it is now, and most people would not have heard of most Western software movies or music, if they had not been ubiquitously available.
So, in developing countries like China, piracy, by fueling a demand that would not have otherwise been there, and ensuring a base of owners with appropriate hardware, lays the foundation for a consumer base. Then, as economic conditions improve, companies move in there, leverage those customers and sell legit products while adding value (better manufacturing quality, etc.) at locally-affordable prices (this is a key point -- no one in any part of the world will pay the equivalent of a week's salary for a CD, for example). Look at places like Japan and Korea that are considered "developed" now. Of course, there's still some piracy in those places -- you can't eradicate it completely, but because you have these people now clamoring for music/movies/software, you now have a thriving music industry and market, both for local artists and for foreign corporations. As a country moves from developing to developed, so will piracy gradually decrease, if companies first build off the existing base of consumers which have been created by pirated material, and market to them (through the selling points of higher quality, etc.) rather than alienating or antagonizing them.
And of course, many times, piracy is the only option, if a company doesn't release their product there. One corollary and positive effect of it has been movie studios, for instance, releasing movies nearly simultaneously worldwide, whereas in the past, in Asia, one would often have to wait for months for a release, if it was to be released at all. In being a stimulus to create buzz and hype -- and ultimately, demand for more -- in countries where the American media juggernaut hasn't reached yet, piracy has been wonderfully successful in this regard.
Essentially, the blunt, hard, truth in much of the developing world is this: without piracy, you would not have had that base of potential consumers to begin with. It's a win/win situation, for the people, for the hardware makers, and ultimately (while it may take time) for the software and content makers as well. Sadly, the myopic vision of most of the corporations fail to grasp this fact.
There's 10 types of people in this world, those who understand binary and those who don't.
The economy dipped becuase of the the overwhelming piracy. That's how bad it gotten. Next will come pestilence, famine, floods and your chickens will stop laying. We must stop priacy now to save the world.
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Of course they do!! The RIAA KNOWS that the reason their sales are down is because the economy sucks....See, they're LYING...when they claim that p2p is hurting sales. p2p threatens their distribution model like nothing before and they'll do anything to kill it. They'll lie, cheat, steal, sue, bribe (mostly Congress) and do whatever else is necessary (whether ethical or not) to keep the mother lode they (now) exclusively mine. the things I've described above aren't new either...they've been doing every one of them for many years (back in the 70's and 80's the record company radio reps used to be known as SNOWMEN and I'm not talking about the weather here!).
I don't think my numbers are wrong. I think they paint a relatively accurate picture. However since I'm not a professional statistician, I figured it would be better to put this up front so people wouldn't accuse me of being a fraud. :)
-jdm
First, CD sales and concert attendance are both down. That's an indication of a problem other than CDs.
Second, rather than looking at music alone, look at overall retail sales of prerecorded entertainment media. This includes videos, music, and games, but not downloaded content. The same outlets that used to carry mostly music now sell DVDs and games, all of which now come on very similar disks. The same players often play all three types of content. There's no longer a big distinction between "videos", "music", and "games".
Third, it's worth looking at discretionary income of people in the RIAA's demographic. If that's down, one would expect their sales to decline.
Fourth, the consolidation of radio station ownership has resulted in major changes in the way music is promoted. That effect has been inadequately analyzed. Clear Channel is quite open about the fact their business is selling ads, not music.
Given that, the suprising thing is that CD sales are only down 8%. Car sales for 2002, for example, were about 13% below car sales in 2001.
One thing I don't see mentioned very often is the very fact that music hasn't been illegal to copy for very long. Hell, in the grand scheme of things, recorded music hasn't been around for very long. The RIAA only exist because of what, historically, amounts to a "technological glitch." That is, the technology was available to make recordings of music available for sale, but copying of that music difficult. It wasn't until about the 1970s that music became illegal to copy, and recordings have only been around since the late 1880s. Music existed long before records, and it will exist long after records are gone.
So really, music existed for thousands of years. For a breif moment in time a technological inequality meant that recordings could be made, but not easily copied. Now, in a sense, technology is working itself out (removing the glitch) and music is back to the way it's been for thousands of years. Just because it's been this way since you were a kid doesn't mean it's been this way forever. The time for being able to charge for recordings is over.
I don't feel sorry for the RIAA--their time is up. The technological glitch is gone and music can get back to being music for music's sake. In the end people will look back at the time when people used to be able to charge for music and laugh. Paying money for nothing but a *recording* of music? What a silly concept.
Jason
other major factor affecting sales data of RIAA is that CDs are digital and it is the only digital product with no upgrade in 21 years! My 1985 CD is as good as new. So while in the past, people used to buy a new copy of the album to replace used one, it is no more necessary.
Also, many people who had vinyl, tape etc, replaced such things with CD. The replacement is largely complete. During the replacement period, people not only bought albums they didn't have, but also bought albums they had. Now, people only buy what they don't have.
To analyze the above points, the RIAA should publish data of sales of new CD albums only and see if there is any decline. My guess is that it is actually increasing. By means of new, I mean never published before.
The third major factor is legal copying. IANAL, but I think it is allowed by law to make duplicate copies of album for personal use. It was hard to make such copies for tape and impossible for vinyl, but this is trivial for CDs.
So, it is doubtful that piracy is the cause of declining RIAA sales.
Good points and an excellent clarification, but I have to take issue with this:
You CANNOT compete with someone taking YOUR PRODUCT and giving it away for free.
Yes, you can, at least in this example. You can provide faster, more reliable, higher quality, verified products in a convenient medium chock full of value added aspects (music suggestions, news, special features, artwork, video, etc.) at a reasonable price.
I'm not saying it was or is incumbent on the RIAA to do so, but it certainly would have behooved them to do so rather than try to kill the distribution channel altogether and maintain the status quo. Being legal, and having a huge head start on content, they could have swamped the P2P's into usenet-binaries-like obscurity instead of helping thrust them into the mainstream by failing to fill the huge, obvious vacuum that Napster trickled into before it was shut down and replaced by more slippery P2P's like Kazaalite. Now it's too late.
Opportunity only knocks once (if at all).
everything in moderation
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.
Wouldn't really be surprised if RIAA eventually sports this argument. :)
Stealing a physical item and copyright infringment are not the same (no matter how much the RIAA would like you to believe).
I think the problem is that the RIAA only know one business model. That business model is out dated and consumers don't seem to be buying into it. Consumers are saying quite loudly that they want to pick and choose music (even by the track) and they want it cheap. People will pay for it (see the Apple music store for proof) if it is packaged attractively. Capitalism doesn't make any promises that your business model will work, nor does it promise that it will continue to work later even if it works today. If the only way to get someone to buy a car was to deliver it your house full of fine-ass women and cases of Heineken, then you damn well better believe that car dealerships would be doing just that. And right now, the RIAA has the equivalent of a large segment of their consumers wanting their cars deliever, with women and beer.
For christ's sake can anyone get this analogy right? To take something with a grain of salt means to take something as significant as a grain of salt -- which is very tiny (read: insignificant).
Bull.
There are two theories about the etymology of the phrase "taken with a grain of salt." One theory traces it back to the Latin phrase "cum grano salis", which was found -- among other places -- in the works of Pliny in the first century as a description of an additive to make an antidote effective. A second, more believed theory traces the phrase to the kitchen table, where salt can make any dubious dish a little better.
In either case, the meaning of the phrase is not to treat something as insignificant, but rather to subject it to a healthy dose of skepticism.
The
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?
"Good?"
I thought we were talking about property. What people refer to as "Intellectual Property" is neither physical property, nor a service rendered. Music is a service if it's a live performance. If you sneak into the venue, you're stealing the service. If you steal CDs, you're stealing plastic laminate discs.
If you're stealing cable, you're stealing a service. Ditto for internet access, cell phone time, etc. Those services are provided at a cost to the provider.
You cannot "steal" ideas. "Intellectual Property" is ideas.
Copyright is not property. It is a temporary legal monopoly on the particular expression of an idea. It isn't a turnip, goat, or plot of land.
You need to get out of the mindset that ideas can be property.
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.
tell me much. Stats are stats are stats. I did enjoy reading it, but feel the answer is elsewhere.
CD sales have dropped for me recently and this is why.
DVD movies now occupy that under $20 knee jerk purchase price point. Everyone knows a DVD is better than a CD in general, so how come the CD is still so expensive? I don't think twice about $16.99 for a DVD, that's a nice deal really. So what does that do for the same pricing on the CD? All I know is that $16.99 number on a CD is pretty unattractive in general these days. To pay as much for a CD as I do a movie, it had better be a damn good CD.
The current buttload of music being pimped via the usual Clear Channel right now is garbage plain and simple. Sure, there is plenty of good music, but it sure is hard to find, unless...
One can sample! Maybe that $16.99 is worth it. (It sometimes is.) I am willing to look and consider the purchase, but nobody is showing. Wonder why they don't sell product? Duh!
Currently I don't download anything. Thought I would make the change and see what happens with me and my family.
I must say that without P2P, I am missing out. All the radio stations here play the same (crap) music. There is little to get excited about. I know there is a lot of music that I would be interested in buying, but I can't find it easily!
P2P is costing the RIAA something in the young market though. If they (kids)have the money they will buy the CD, even if they have downloaded it. But if they have a (better) choice they won't. These days there are more good choices, so kids buy fewer CD's because they know they can get the music somehow later, but can't easily repeat a spur of the moment movie trip. So, the RIAA is losing sales here in my view. In a twisted sort of way, they might be right with the younger crowd. They can squeeze more out of their latest boy band if there is less P2P, but at what cost?
On second hand they might already be hosed. When I shut down the P2P, my kids ended up doing the same thing I did. They go to school, talk about the music, find out who has it and why, and copy it if it fits.
There are more CDRs laying around the house now than when P2P was running.
Now, I do get excited about movies and guess what? That is what I buy. The movie market appeals to everyone at some level. There are several layers to the whole thing that make it easy to sell to those looking to buy that music just does not have today.
The RIAA is currently trying like hell to milk everything they can from the kids. (Remember the point earlier about cost?) Problem is that those same kids also have DVD, subscription TV, cell phone plans and other new things to worry about. With all those new choices offering different values, is it any wonder CD sales are not as attractive given their low value proposition in comparison?
Your average teenage girl can get a cell plan for the cost of many CD's that will provide way more bang for the buck than that CD will...
I think the RIAA is getting squeezed right out of their prime market because of these things and their own ignorance.
Now here I am sitting with my disposable income looking for something to buy. Does it take much of a stretch to see that I am going to buy something from those people willing to entertain my business?
Whatever problems the the movie companies have with digital are not getting in the way of moving product. They are showing me lots of pricing options, good content and good value across the board. I can easily find blockbusters along with interesting smaller films.
What do I get on the music side of things?
Shit.
The majority of the content is aimed at people half my age. I cannot realistically sample using the radio because they are all but owned by the big boys, so they mostly play the same things. Going into the music store to sample is a joke really. All they do is put the same tracks on the in-store boxes that I just got d
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