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The Effect of Pirated CDs
Moderation abuser writes "The real reasons music isn't selling as much as it used to, and not a lot to do with file sharing." I'm not sure that I agree that piracy is the reason for all of the music industry woes - I think creativity also has something to do with it, but those are still some huge numbers for pirated CDs.
Consumer Backlash is a poorly understood concept, but I believe the "Music Industry" is now experiencing it. I've been bitter ever since the price of tapes rose dramatically. This was followed by CD's where I not only re-purchased most of my music library, but was forced to purchase so many "Albums" to get individual songs. After thousands of dollars spent, hundreds of CD's which slowly became scratched and degraded, and complete inability to listen to a constant stream of songs I liked (again forced into the Album mentality), I've had it.
Now "The Industry" is suing their own customers!
I haven't purchased a single CD for five years, and I don't plan to ever purchase another. I am content to listen to the radio.
Torsten
Let me point out MY own point of view to the main problem to music sales.
I think that the main problem is almost solely the advent of used CD stores. I know it sounds silly, but when Joe Musiclover buys a CD at Sam Goody, the record label (i.e. Warner Bros) sees revenue. However, when I buy the same CD at a used CD store the record label recognizes $0 of revenue.
I have a large network of friends and I don't know a single one of my friends that will pay the money asked for a new CD when they know they can wait a month and get it for a small fraction of the cost of a retail CD store.
Last "new" CD I purchased was in 1992, and ever since then I have made all of my purchases at used stores which has saved me a bundle of money.
This is another primary loss of revenue that people like the RIAA just seem to overlook and do not want to acknowledge. I have sent them quite a few letters with some facts and figures based upon the people that I alone know. If you were to multiply this across the nation you'd see a LOT larger figures.
Just something to think about and yet it is something overlooked anytime this subject is considered.
I don't think any of those factors have anything to do with it. When I was a kid, it was a common thing to ask a friend to make a tape of their newest cassett for you. In College, it was burn a new CD. Now it's send me the mp3.
What has changed is quality. 10 years ago, Digital Signal Processing (DSP) technology wasn't good enough to make boob toting hacks like Britany Spears sound good. Now we are inundated with manufactured bands who don't have the quality or maturity of the groups who cut their teeth playing in local pubs to crowds of 4 people. NSYNC isn't famous because of an increasing demand of local fans. They are famous because the RIAA packaged and marketed them down the throats of the 12 to 18 demographic.
Bottom line is that the crowd with the real money (adults with real jobs) is only going to pay for something they will want to listen for a long time and "BackStreat's Back" is NOT it.
I've dirtied my hands writing poetry, for the sake of seduction; that is, for the sake of a useful cause. --Dostoevsky
In the article it mentions that 1) some of the piracy is coming from major labels copying their rivals CDs (with 2 major RIAA companies having been fined twice), 2) the RIAA is producing 25% fewer CDs than it did even 10 years ago ,and 3) most of the money lost by the music industry is being drained by organized crime syndicates, not P-2-P swappers.
Of course the RIAA is afraid and targeting domestic file-swapping. Congressional lobbying/bribing allows them to use their muscle most effectively on their home turf (US Soil). Domestic file-swapping is also a source of revenue drain, just not the primary one. Yet they are afraid because their revenues are down despite having produced fewer units to sell. Their prices are inflated to the point that file-swappers often feel that they are pseudo-Robin Hoods that steal from the rich RIAA and give to themselves and others. The few bad apples who flagrantly do this in violation of copyrights on a large scale "justify" the RIAA "anti-piracy" efforts in the mass media, which the RIAA subunits often hold stock in as well. They have the money and moxie to make the rest of us pay their over-inflated prices while morally justifying it to those people who do not know better.
Meanwhile the international criminals are difficult to track and catch. Thailand may be bulldozing the copies it finds, but I find that the more extreme the public demonstration of enforcing law, the less often it is actually enforced. Thailand, China, and other areas of Southeast and East Asia are the HQ of large-scale piracy. Anyone with friends who visit Hong Kong, Beijing, or Taiwan regularly is likely to have been offered pirate DVDs or CDs of recent movies or music. Even the soundtrack for recent movies are available...often before they leave the theater. Enforcement of copyright in those countries is more difficult, especially since the WTO is reluctant to enforce rules so stringently against the truly huge economies.
Copyright may be an outdated notion according to some, but the RIAA has the money and Congressmen that it deserves watching if only on a civil liberties basis. The DMCA is only one example of how creatvity is stifled for the benefit of copyright holders. Any future moves by the RIAA could be as stringent or worse. I'm not suggesting we appease the dragon that is the RIAA, but instead we keep vigilant watch on where they are actually losing money as this article does. Thus when the RIAA proposes legislation like the DMCA hard evidence can be used to discourage legislators from enacting such laws.
As long as there is a Second Amendment, there will always be a First Amendment.
There has been an ill fated attempt by sony at SACD (Super Audio CD) which never caught on. Then there is DVDA - which has/will not catch on either.
The reason people bought CD's to replace vinyl and tapes is because CD's were a breakthrough in technology (i.e. convenience) - there was the value added for the consumers to buy into it. About the same as MP3's/AAC is now - new technology will only succeed if it adds something new and useful, regardless of whether it is driven by the record companies or not.
The FBI (or rather, the Secret Service, who's really in charge of enforcing copyrights and often works wirth RIAA on raids & stings) isn't raiding Chinatown because that's a complicated issue, and the last thing RIAA wants is for things to get complicated.
See, bootleg CD's aren't all that big here, so it's not as much of a market-threat. In China, Singapore, Taiwan, S. Korea, and other Asian marketplaces, it's dominant. It's hard to justify a chinatown raid when the actual crime is happening in china.
And regarding why RIAA won't "show me" these statistics about decreases in production, it's because that's too much for simple middle-america folk to think about. Mom & Pop Smallville can't handle statistics, but they sure do understand a villain and breaking the law.
What I don't get is, if CD sales are down 16% (I think the article said) and CD production is down 25%, doesn't that mean that per CD, sales are up? With your releases down 25%, shouldn't your total expendatures be down as well, and with the incresed sales/release, profits should be increasing. If the RIAA's members are hemoraging money, it can only be due to internal incompetence and waste.
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I'd rather be flamed than ignored.
Seems to me that there are two states of the music industry, the "creative" and the "marketed", like a yin and yang. Mostly it is run as 'marketed' but every so often (late 60s, late 70s, early 90s), the 'marketed' just gets too vapid, too crappy and the 'creative' gets a chance. After a while, the 'creative' self-destructs and the 'marketed' creeps back in.
The Cheeky Girls are a sign that we have reached so low that the 'creative' is probably around the corner.
No, what's changed is that the RIAA has spent the last 30 years buying as much influence in politics as they can. Why else would a middling-sized outfit like them be able to push around the tech industry, whose gross sales figures outstrip them nearly 10 to 1?
The RIAA is scared, plain and simple. They now see that the power to create, publish, and promote music is available to ANYONE, and when you combine that with the degeneration of television advertising as a viable income (broadcast television is almost a thing of the past), they are about to become redundant, and they have no ideas for reinventing themselves. Their choices are:
- Reinvent. Come up with a way to make money off the emerging trends in digital media, home and portable theatre, and live webcasts.
- Fire-Sale. Drop the prices on everything to the point where people will want to buy the physical media again.
- Sue. Use the political clout they've been cultivating over the years and make money by taking it from others, and stifling innovation in the process. This has worked for the oil companies for decades.
- Fade away. All the top execs have money, they could liquidate the franchises, and leave a power vacuum after they take the cash. Let artists fend for themselves (as they do anyways).
Option 3 looks like it has the best potential for short term profit and a lingering continued existance.Pirating + economic downturn + vinyl replacement finished = far less CD sales. Also mentioned were that teenagers are more interested in cell phones than music these days.
The RIAA and CD Industry has been fined twice for price fixing, and pirating is heavily undercutting the pricing schemes established by the CD industry. So overchaging to the point that pirated copies become massively popular is the implication.
No singles available on CD translates to file sharing with the current high pricing scheme as well.
What would be a good solution?
I remember when Dave Matthews stirred up people, by sending in anti-bootleg teams to bust record stores across the country. They were selling bootleg copies of his concerts, that were unavailable on commerical releases. Apparently demand for his product was higher than delivery. His response was to put people out of business for trying to meet the demand. His record sales dropped as the hard core fanatics got pissed and quit buying his stuff.
Bob Dylan's response. He went out and bought all the bootlegs. Then picked the best tracks and released a 3-cd set of "Bob Dylan: Best of the Bootlegs", thus meeting the demand for more music. He undercut the bootleggers, because his collection was of known quality and cheaper than buying a bunch of $30 bootlegs to find the good tracks.
The RIAA needs to get real and realize that it's current business model is failing. One, it needs to offer more reasonable pricing and cut out the excessive "advertising/promotion" budgets that are used to rip off the artists. Secondly it needs to offer downloads of mp3's at even more reasonable prices since no manufactoring is requited. This would handle the singles market. Then it can attack the bootleg market head on, because it offers a competitive affordable product in line with demand.
Attacking filesharers, is not the best approach. Here's the reasons I see: 1) It would take 2000 years to supoena every file sharer at current rate. 2) Filesharers tend to be youth who are fans of music. Attacking them is attacking your future market. Creating animosity with the primary consumer is not good business strategy. 3) A lot of filesharers probably wouldn't buy a copy if left with no other choice than buying it. In my youth, I was a pirate of computer games, I had no money to buy them--therefore I couldn't and I stole them. Had my only option been purchase at $35/title, I wouldn't have. If I could have bought them for $5/$10 a piece I probably would have. I'm not justifying my behavior, just explaining the business case that the RIAA seems to have missed.
A bunch of entrenched lazy bureacrats who can't keep up with change is half of the problem. The other half, is people without enough self control (encouraged by continuous marketing and consumer culture), who feel compelled to create large markets based on theft.
Supply/Demand economics slapping the RIAA upside the head is what's going really going on.
I used to wonder what was so holy about a silent night, now I have a child.