CD-Rs and MP3s Not Hurting Record Sales

David Gerard writes "Forget the industry shills' spin - the numbers prove that, for Australia, CD-Rs and MP3s are not hurting record sales in the slightest - based on a recent Australian Record Industry Association survey. It would be interesting to see what the numbers for the US or UK say."

Comments

old news, but...

[tuxette]

...every time I read something like this, the report is from a different country than last time.

So to the RIAA - the WHOLE WORLD is proving you wrong!

preaching to the choir

[McDrewbie]

this is basically giving proof for what most of slashdot already knew. I for one bought more cd's in Napster's hey-day then I do now.

Re:preaching to the choir

[fucksl4shd0t]

The bottom line was that everyone made more money, consumers got more choice, and sampling (and buying) of CDs got distributed over a wider cast of artists. The only exposure was with the top few artists at each of the top 5 record labels, which she thought would be very influential on the way the industry would behave. Unfortunately, a significant share of most record labels profits come from very few artists.

Record company thinking is a dinosaur. I have labeled the very last sentence in your post as the "rock-star mentality", and it is identical to the "home-run mentality". :)

Basically, the record-company is stuck in the rut of trying to make rock-stars out of musicians, and pushing every musician they can to stardom. Statistically, this model fails because only a very select few, determined by market forces, will become a "hit". The industry can impact that, to some extent, and they do try, but in the end it's market forces that dominate the next big thing. It always is. I suggest that dropping CD sales is mostly due to the record industry trying to make the next big hit, rather than trying to find out what it is.

I think the record industry needs to drop the rock-star mentality and go for the muffler man mentality. This requires more description:

Back when I did exhaust work, I worked with a guy who didn't want any of the "small" jobs. The setup was this: When a job sold, the ticket would get hung on the wall in shop. We (the mechanics) would take them each in line. When you finished a job, you grab the next ticket in line and start working on it, no matter what it is. We made commission, no hourly or salary pay, so we got paid (theoretically) for what we were worth.

So, this guy decides that small jobs are a waste of time and he only wants to work the big jobs. He did a few brake jobs that day, and one of the higher-priced exhaust jobs. He cherry-picked. ;) He hovered close to the tickets and would slow down his work until the next ticket was a high-dollar ticket. Then he would crank it up, finish his job, and grab it before someone else got to it.

That left all the small jobs for me and the other guy. So I busted my ass and did as many of them as I could.

At the end of the day, I had done $1,400 worth of work (earning 14% of that), while the cherry-picker had only done about $900.

His was the "rock-star mentality", and mine was the "muffler man mentality". It compares nicely with grocery stores who only get 3% profit on gross sales, and take a loss on many of the individual products in the store! Yet they rake in millions each year!

The recording industry needs to take a lesson from all of this and focus more on getting all of their music to sell rather than pushing the Next Big Thing. People have diverse interests, and any investor will tell you to diversify your holdings. Why does the record industry insist on focusing on less than 10% of their total catalog? Because it makes money? I'll bet that they'd make a LOT more money if they focused on getting their whole catalog to sell and worried more about gross sales than they worry about individual musicians. And that's where P2P file sharing becomes an asset in their marketing strategy, rather than the liability it poses now.

Make no mistake: P2P does represent a liability to the record industry. Ultimately it might well result in their downfall. Not through immoral piracy, but simply because customers don't give a shit about the industry, they care about the musicians that make the music, and they will support those musicians. Historically, all of the big rock bands to come out that have shown staying power started by building their own following. Aerosmith wasn't an overnight sensation, neither was Metallica. Both of them worked their asses off for years, making shit for pay, until they finally had enough of a following to be viable bands to the record industry. For all those years, they were classed in the 90%+ of

Uhhh ARIA said different.

[Anonymous Coward]

ARIA (Australia'a RIAA) plainly stated barely 2 months ago that australia had had the worst sales of CDs in history in 2003. Is someone lying here?

Re:Uhhh ARIA said different.

[Anonymous Coward]

it did not include oral sex from the cute chick at the counter

Being a girl myself and just out of curiosity, I'd like to know how oral sex administered by a beautiful chick differs from that given by an average girl?

Wonderful news, but...

[troff]

... will it really help? We face a thousand-and-one lawyers and school or workplace administrators running in fear from those lawyers and they still refuse to hear this new, or disregard it completely. I AM Australian. My workplace IS a school (well, a university) where I also study; last semester, that included a semester of Law for IT students; we had to put up with the Copyright Law 1968 and its 21st Century amendments; in our workplace, they've cracked down on MP3s and the central IT section have instituted semi-regular searches of our Windows XP administrative shares (suits me; 1: I use Ogg and 2: I keep my personal music - yes, from CDs I bought - on my Linux desktop anyway).

As has already been said, 'nuff said, heard it all already. Knew it.

But how does this news get to the lawmakers, to the people whose ears are already stuffed with campaign donations by some other "interested" party?

Exactly!

[Dolemite_the_Wiz]

Record Sales are indeed down because people would rather burn a CD of great music than the Bubble-Gum Pop and "Pseudo-Punk-My-Girlfriend-dumped-me-and-I-am-in-p ain" Overpriced Crap the Record industry has available in the Record Stores.

Dolemite
_____________________

The only one stealing is the record labels...

[Anonymous Coward]

How am I supposed to feel bad copying a cd that costs at the most a nickel to produce and costs me $18??? The worst bit is the Artist only gets pennies on the dollar for the sale. Your better off just giving the artist a buck and calling it even. Check out this article it is a interview with Courtney Love. She does the math and the only person making a profit is the Record Label.

What can we use this "proof" for?

[mbrix]

Why is this important to prove? Even though downloading music doesn't hurt CD sales, does it make it more right? If downloading music becomes legal, *then* it will hurt CD sales. Without doubt.

Re:What can we use this "proof" for?

[Crypto Gnome]

Because the corporate machine that is the RIAA is lying to you, the customer.

All the time.

Every Day.

And if that isn't bad enough for you, they want to stop legitimate use.

Specifically, you might want to rip and encode that Music CD you purchased in order to listen to it on your MP3 player (a reasonable expectation) - but the RIAA will do *anything* to stop you from doing that.

WHY do they want to do that? because

1. people ONLY rip and encode to MP3 in order to pirate music
2. music piracy decreases sales
3. decreasing sales hurts artists
4. hurting artists will produce less music

Of course, it's been shown in many/most cases that only #4 is true

1. Some People rip and encode to MP3 for legitimate private use, not for piracy
2. in many cases Music Piracy is in actual fact encouraging people to broaden their music tastes (ie buy stuff they'd not previously consider)
3. decreasing sales are often a myth, or at best "decreasing sales of actual CDs" (ie because there's STRONG UPTAKE in legal and legitimate digital downloadable music sales)
4. The RIAA already screw most if not all artists as hard as they can, so who are the RIAA to whine about "save the hurting artists"?

Does it matter?

[Richard_at_work]

Copyright infringement is wrong, just because its not having a negative affect on sales doesnt mean its ok to continue copying. Im not against fair use, whether implied or granted by the government, but wholesale copying of music, which is what is going on via kazaa etc, is just plain immorally wrong, regardless of what the RIAA or the ARIA or whoever does so people can "justify" it.

Re:Does it matter?

[bit01]

but wholesale copying of music, which is what is going on via kazaa etc, is just plain immorally wrong

Nope, it may be illegal but it's not immoral. IP law is totally broken at the moment and civil disobedience is entirely appropriate.

---

It's wrong that an intellectual property creator should not be rewarded for their work.
It's equally wrong that an IP creator should be rewarded too many times for the one piece of work, for exactly the same reasons.
Reform IP law and stop the M$/RIAA abuse.

Re:Does it matter?

[Anonymous Coward]

Regardless, if the observation of the article was true in general, it would certainly undermine the arguments of the copyright holders for drastic measures like the DMCA++ that's being pushed everywhere.

If no (or little) damage is done, what's left as a justification for this kind of legislation?

Re:Does it matter?

[Crypto Gnome]

As much as I disgree with prople infringing on copyright (ie breaking the law) here's my personal take in the situation.

----- Don't flame me, I'm posing a moral question here -----

There are countries where The Music Industry has pressured The Government to apply a FEE to all and sundry users of a Particular Recording Medium (eg the CDRs in Canada).

The Music Industry argues "*ALL* users of this recording medium are PIRATES, therefore they ALL should pay ME money".

Ok, so if I've done the time, then looking at this from a purely moral standpoint, why should I not do the crime?

I've *already* "paid for" the criminal act of pirating music, so why should I not go out and perform the criminal act itself?

----- It only stands to reason.

On the other hand,if they want to treat me with the assumption that I'm basically a good law abiding citizen, that I want to rip my music to MP3 for my own private listening, and that I use CDRs for storing backups of my own personal original digital photography, then why do they need to impose a *blanket* CDR fee *as well as* doing their best to technologically prevent me from riping CDs on my computer.

---------------

You ask "does it matter?" I say yes it does because the Music Industry Associations are arguing from a "morally right" standpoint (eg infringing on copyright hurts the artists), even though they're very clearly morally wrong (ie by assuming that *all* CDR sales are for piracy , and that *anyone* who rips music to MP3 is always/only doing so for the purposes of piracy).

Re:Does it matter?

[Richard_at_work]

Nope, it may be illegal but it's not immoral. IP law is totally broken at the moment and civil disobedience is entirely appropriate.

Civil disobedience in these cases is where you publically declare that you are going to break the law, state your reasons why, and publically do it. Civil disobedience stives to raise the public view of the act you are campaigning against, and it does it by demonstrating why it is wrong, and why you are against it, and giving the chance for the act to be taken to court, so it can be demonstrated there as well. People downloading off kazaa, copying off friends etc etc are not doing this, they are hiding in the shadows and not performing any civil disobedience at all, and until someone does im sorry but this arguement does not stand for me.

Re:Does it matter?

[Brian Boitano]

I don't think the act of civil disobedience requires you to advertise that you are doing it:

civil disobedience
n.

Refusal to obey civil laws in an effort to induce change in governmental policy or legislation, characterized by the use of passive resistance or other nonviolent means.

(from dictionary.com)

Re:Does it matter?

[Tim C]

The "in an effort to induce change" bit is key. If no-one knows that you're doing it, or at least why you're doing it, then how can you possibly induce change?

In this case, there are two possible reasons for ignoring copyright law:

1) you think that the current system is broken in some way, and needs to be changed
2) you just want stuff and don't want to have to pay for it

Unless you publicly stand up and announce that you are doing what you do because of 1), most people (who either don't realise or don't believe that there's a problem) are going to assume that it's all happening due to 2). The only change that that will effect is an increased clampdown and even tougher laws and penalties.

If you want the law to change, you have to convince enough of the public to agree with you that the legislators cannot afford to ignore the issue. As Richard_at_work says, you can't do that by breaking the law and hiding your activities.

Re:Does it matter?

[fucksl4shd0t]

Read this

With copyright terms now stretching to 140+ years, and recent judgements that make it possible for corporations to maintain copyright indefinitely, that makes the laws unjust.

Now, I will exercise my fair use rights by quoting from a passage recorded, and I'll not tell you who recorded this speech, nor what song it introduces:

Citizens of Boston. Throughout the course of our nation's history, the people of Boston have rallied bravely whenever the rights of man have been threatened. Today, a new crisis has arisen. The Metropolitan Transit Authority, better known as the MTA, has been levying burdensome attacks on the population in the form of subway fair increases. Citizens hear me out! This can happen to you:

Crying Wolf ? When will thy bluff be called ..

[leoaugust]

The recording industry and its brethren have been crying wolf for years.

• At various times we have been told that the pianola was going to kill sales of sheet music,
• that radio was going to kill sales of records,
• that photocopying would kill sales of books,
• that the VCR would stop people going to movies, and
• that cheaper imported records would stop people buying Australian music.
• Along the way we have been told that the use of the latest technology was immoral - everything from the photocopier to the cassette recorder to the VCR.

Crying Wolf for years ? Crying wolf implies that someday your bluff will be called. Remember the Story of the Boy Who Cried Wolf ?

If the bluff ain't ever going to be called then is it really crying wolf ?

Is the RIAA and MPAA bluff ever going to be called ? Has it ever been called out even after the above listed examples ?

Big Money speaks. And Big Money carries a big stick. In today's world don't underestimate the belief that brawn overcomes brains. Hopefully, though, someday the brains will inherit the earth.

Re:WiFi it in Aussie land

[alien_blueprint]

Sounds like gaming over the net in Australia can rape you wallet in a hurry. Must suck to be a gamer down under.

This is where your choice of ISP becomes very important. Many ISPs offer free download servers and game servers that don't incur any cost. I don't happen to play PC games at the moment, however my ISP has an array of game servers for different popular games. It also mirrors various Linux distros, FreeBSD, Mozilla, Python, Perl and other popular open source projects - which is what *I'm* interested in. So my total bandwidth is actually quite low. The "gamers" I know who use my ISP are also pretty satisfied with the game servers and associated software downloads.

So, it becomes a matter of finding an ISP that provides extra services that match your interests.

But, at least WiFi is an option right? [...] Could it work? Any thoughts on this.

The problem, as I understand it, is that there are very few large pipes into the country, what with it being an island and all.

And yes, people have been trying to set up local community wireless networks for years now, but it's not crossed the chasm into the mainstream yet. I suppose the problem is that in the end you have to connect to an ISP at *some* point to reach someone outside the network, and so you end up paying anyhow. It might work for local gaming, though.

Re:Interesting

[mshiltonj]

"CD sales are down 15 percent from last year, while legal online services like the new Napster and Apple's iTunes have taken off, especially for the holidays. Apple's iTunes sold more than $1 million in download gift certificates since October."


I'm curious to know what is actually selling on iTunes, etc. Is it new stuff? Or classic, older stuff from the labels' catablogs?

I don't by any CDs now because most new music sucks, and I've already got my preferred CDs in my library. I may be a White Stripes or a Jet disc. But, of all the material being released in the past few year, almost none of it appeals to me.

I have to wonder if all the iTunes sales are for Zeppelin, Stones, Floyd, etc. (or artists from your genre of choice).

Eventually, iTunes users will have filled their iPods with the older music they've heard and know they already like.

When that point arrives, the industry will have to convince customers that Britney is more deserving of space on the iPod, and more deserving of one's listening time, than Jimmy Hendricks and Janis Joplin.

Good luck with that.

OT: We now have AUDIO CD-R's

[fireman sam]

I was just in the shops today getting some CD-R's and I noticed that some were labeled AUDIO CD-R, while others were labeled DATA CD-R.

The only difference was the price.

DATA CD-R worked out about $0.80 per CD-R
AUDIO CD-R worked out about $1.30 per CD-R

I wonder how many people will get the audio cd-r's thinking that somehow the data cd-r's will not play audio?

Au contraire mon frere!

[jefeweiss]

Lots of people will pay for something that they know they like even if they know they can get it for free. In fact, public radio in the United States is pretty much supported by people who know that they can get it for free but choose to pay anyway. Just because you have a somewhat dim view of human nature doesn't make it so. People can be quite generous towards someone who is doing something they consider worthwhile.

Re:Au contraire mon frere!

[Ironica]

People don't pay for stuff if given the choice not to. Sure, some do, but vast vast majority don't.

Sure, but then you've got the goose that laid the golden egg issue, too.

If you hear an independent band's music, and like it, and can download it for free... you want more of it. And chances are, they haven't *recorded* more of it yet. You won't get it unless they have the funds to record it. What's the simplest way to ensure they have the money to continue their endeavors? Buy the CD. And the T-shirt, the baseball caps, and the bumper stickers.

Furthermore, if you download music, you *don't* have the whole product. Not even if you legally download every second of recorded sound that's on their CD. Because the liner notes, the cover, the case... it's all part of it. Want to know what the band members look like? Want to know what the heck that guy is saying? Wondering how they got that funky name? Often you'll find it out from the liner notes. Bands who want to sell CDs should make these as interesting as possible.

What people have empirically observed is that their CD sales (or book sales) increase when they make the material available for free download. This is usually the case for folks without a big reputation, or a concert tour, or money for advertising. Maybe it's not the case for big-name artists, but if it's not, that's probably because they've reached market saturation. It might hurt sales, true... but probably only if it turned out the album sucked.

Re:Au contraire mon frere!

[Anonymous Coward]

So, then, the majority of waitresses in the country are dirt poor? You don't *have* to tip, after all, (assuming gratuity is not included in the check) but the majority of people that eat at restaurants DO tip the person that served them. They don't *have* to, but they *do*.

Re:Au contraire mon frere!

[bogie]

"Because the liner notes, the cover, the case... it's all part of it. Want to know what the band members look like? Want to know what the heck that guy is saying? Wondering how they got that funky name? Often you'll find it out from the liner notes. Bands who want to sell CDs should make these as interesting as possible."

I honestly have to say that might have been the case 10 years ago, but in the age of the Internet everything you mentioned is availabe in seconds, including albums covers if indeed you need to look at it for some reaon.

Physical media is irrelevant and I can't remember that last time I even looked at the insert that came with the CD. The only thing an actual physical CD is good for is being able to play the cd in your car or portable and cdr's are dirt cheap.

Most people just don't even care about the things your mentioned and much more importantly a generation is growing up that sees digital media as the "real format", not some cd you have to go to the store and actually pay for.

Re:What percentage of music fans buy NEW CDs?

[fucksl4shd0t]

Could the downward price pressure of all the accumulated used CDs hitting the market (and people like me buying them) be responsible for the recent sales declines and price reductions as much as P2P?

Could it also be the result of everyone having finally upgraded themselves to CD? How much of their sales in the 90s was the result of people upgrading their existing music collection? I know I upgraded mine...

Now I"ve upgraded mine to a format the RIAA doesn't want to support! I store it on my hard drive. The conduit they provide for me to put it on my hard drive happens to be a conduit through which I prefer not to interact. Consider this: I can go get a used CD from a music store, bring it home, rip it, take it back, sell it back to them, and get 70% of the money I spent back. In the end, a CD that only cost me $4.99 to buy used could bring me $3 when I take it back in to sell the next day. Furthermore, if I spent some time surveying the local used CD stores, I'll bet I could come out even or even pull a profit!

That's all because CD is no longer my preferred storage medium the same way that cassette was never my preferred storage medium. I stored on cassette when I wanted the music to be portable. I bought new on vinyl, and CD when it came out. Now I store on my hard drive, and when I want the music to be portable I burn on CD.

If they want my money the way they got it back in the days when I was upgrading my collection, they need to provide a way for me to upgrade my collection again, and that's all there is to it. The 90s are the first decade that didn't see a new music format distributed. In fact, it's the decade that DAT got beat out of replacing CD. Otherwise, every other decade has seen new music formats, and therefore has seen sales from existing "classics".

How much money has EMI made from re-issuing Beatles albums on new formats? Pink Floyd? Dark Side of the Moon regularly goes platinum, and it has probably outsold many other albums on every medium on which it has been distributed.

CDs just aren't preferred storage mediums any more. This time we made the switch without them. :) So this time they get to learn about "value" rather than "profit", because consumers don't give a flying fuck about "profit", they do care about "value". More value will attract more buyers, and that translates to more profit.

Instead of asking "If I download music, will it take away from record industry profits that they use to pay the artists?", the question to ask is "What value do I receive by downloading, and what is the competitive value offering by buying the CDs?" The answer to the second question will tell you where the record industry needs to move their marketing and sales...

I love Slashdot

[Overly Critical Guy]

I love Slashdot. It always latches onto some single study or report and drives it home as evidence for their entire viewpoint. For instance, when the RIAA sent hundreds of thousands of lawsuits, and a couple of them happened to end up at places where someone used a grandfather's computer or some 11-year old girl used her mommy's computer. Suddenly, the RIAA is bullying! And the mantra repeated is that it's "crappy music" that is hurting sales, even though both crappy and good music has always been around.

Now, a single Australian study shows that sales went up instead of down, and suddenly that's evidence that MP3s and CD-Rs don't hurt sales. Meanwhile, COMMON SENSE AND LOGIC dictates that someone would rather go online and download an album for free in 10 minutes rather than go to the store and buy it for $10.

Nobody on Slashdot can offer a single valid justification for downloading music without paying for it. Not a one. I feel sorry for the artists that get ripped off. Here comes the part where people try to reply with "BUT THE RIAA RIPS THEM OFF EVERYDAY!1" even though the bands willingly signed contracts with their labels.

You want to know how much of a joke it's become? See What A Crappy Present. Kids aren't going to be buying albums anymore because you people have made downloading so commonplace. Think it through. What do you think is going to happen? Labels will stop taking chances on bands because they don't get returns on those investments, since "culture movement" people like you download the fuck out of them.

Re:Interesting

[Anonymous Coward]

Saying "most new music sucks" says more about your searching capabilities and willingness to expand your musical tastes past what you listened to in high school, than it does about the state of the music industry.

Good luck with that.

Re:mp3s helped my sales!

[Kris_J]

"If you can hear it before you pay for it, and you like it, chances are you'll pay for it."

Well, that's just sillyness. If they already have what they want, they're not going to come back and pay if given a choice not to.

Let me guess, you're a young American. Here's a clue. People do things not just for reasons of money. Bonus clue: Some people understand the power of money and spend it for reasons other than direct personal gain.

Also, some people aren't so short sighted as to believe that an immediated apparent financial gain is always the best course of action for the long time.

Re:Socializing music (Was: mp3s helped my sales!)

[turnstyle]

"Utopian idea? What a selfish world you live in."

Why rely on patronizing comments to substitute for meaningful argument? You may actually go out and buy each CD that burn (come on, honest now, do you?) but are you actually saying that your position is that most people also purchase CDs that they burned? Insult me for calling that Utopian, but I don't drink your Kool-aid.

"Personally, I believe a musician has the best chance of making a living by producing lots of good stuff people want."

Perhaps that's your misunderstanding: musicians can't make a living by simply producing lots of good stuff -- they have to sell it, and unlimited file-sharing makes it harder, not easier, to sell their work.