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

mp3s helped my sales!

[acefantastik]

Yep, my band has had a bunch of sales becausepeople can hear it free on my site, and I welcome trading. If you can hear it before you pay for it, and you like it, chances are you'll pay for it. I have several more dollars for beer and guitar strings due to internet sales. Thanks, Al Gore!

Re:mp3s helped my sales!

[Negatyfus]

Dude! Great way to unconspicuously promote your band! If I had a band I would be so mentioning my band in every sentence of my Slashdot post! What a good idea to direct people to two death metal MP3's free for download. Heh.

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.

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

[Ian.Waring]

I remember a piece of excellent work done by Claire Enders (who used to do strategy work for EMI Music before setting up her own consultancy - Enders Analysis) on the effect of P2P services on the UK music industry.

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.

Given the way things played out, she was right on the button. And it remains the only analysis i've ever seen that was based on raw numbers rather than "industry sponsored views"...

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

Re:preaching to the choir

[fucksl4shd0t]

Ya, but what about the days you worked your ass off and made less than him?

I *never* worked my ass off and made less than him. At least, in the muffler business, laziness gets quickly beat out by the market itself. People want their cars fixed *now* and don't have time to wait. If you want to slog your way through the job, work less and get paid more, it's just not going to happen.

I've put out what I consider a half-assed effort and still made more than him. :) The only time I made less than him was on the slow days when it was just the luck of the draw. On any busy day, I beat him hands down, and usually topped the shop. In a different shop, in the same company, I didn't top the shop every time it was busy because there was real competition with the other mechanics. In that place, I found that I made more money being a team player than fighting over work. If I helped a guy out on a job, he wouldn't have a problem helping me out when I needed it. More, he would even be willing to give up a job or two on a slow day to give me beer money or whatever, because he knows he can depend on my help.

Cutthroat competition can be fun, but isn't usually the best way to get the job done. :)

The formula never changes: volume is where the money is. It's volume that makes manufacturing work in the first place! Without volume, there'd be no need!

Now, I certainly sympathize with your statement about the printing industry, and it is a different ballgame than mechanic work. But in the end, it's still volume that pays the bills, pays the workers, puts food on the table, and so forth. Sure, when it's busy you might be inclined to pass up the small print run. Then, when it's slow, you can be certain the small print run won't come back to you when you need it. They'll remember how they were snubbed when you were busy. Passing up work for short-term gain always screws you in the long run, and the simple fact is, you can't pass up any work. Every piece of work you accept will affect you when it gets slow. In fact, by definition, the more work you take, the less slow you are. :)

So, yeah, I can see the real business problem of passing up the small job for the big job. But it will bite you on the ass. Winter doesn't have to be biting. It's always slow in the winter. Hell, plenty of times I had work in the winter because I didn't pass up the work in the summer. That same guy didn't have any work when it got slow, and there were quite a few times when people showed up and asked for me to work on their car because I didn't pass them up for more money.

Re:preaching to the choir

[Simonetta]

I feel that the record companies (is there still more than three or four companies that control the global music industry?) are losing a massive income opportunity by not taking advantage of the eighty-to-one price differencial between the old model of $18 CDs and $0.18CD-Rs filled with 700MB of MP3 music (at roughly 1.2MegaBytes per minute of 160-192kbps MP3 encoding).

Whenever any medium goes through a digital transformation, it opens giant income generation possibilities after the massive development costs are met. This is not wealth transfer (such as people 'stealing' music by not buying the same dollar amount of music-per-minute as the RIAA claims) but actual wealth generation (the dollar value of the MP3s in $0.18/CDR format that people would have paid to the RIAA companies if the record companies had made this music available in the MP3/CDR custom selection format).

My wild ass guess as to the price point for a CD-R with 13 albums (even assuming that half of the albums would have been the buyer's selection and the other half chosen by the record companies as a forced promotion of new bands) would have been about $3 per disk.

This revenue of $0.25 - $0.50 per album (times the number of downloaded and copied songs - divided by the number of songs average per album) is the closest actual real amount of money that the record industry is allowing to slip away as a result of not embracing the MP3/CD-R format at a price that 'illegal' song downloaders would be willing to pay for product.

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.

[mabinogi]

They probably said they made less money...which the article mentions..
But that's from lower prices, not from lower sales...

Re:Uhhh ARIA said different.

[Random832]

"More than 80 % of people who received burnt CDs say that they would 'rarely' or 'never' buy a copy of a burnt CD they had received. More than 50 % of file sharers tend not to buy music they have downloaded (ie. 'rarely' or 'never' buy)." --- No, I know I wouldnt "Pay" for a burnt CD.. I'd pay for the original item.. but never for "burnt CD". Wouldnt the be "burned" ? http://www.aria.com.au/news.htm

read it again. it says they wouldn't "buy a copy of" [meaning, buy a legitimate disc] for something of which they had already received a CDR copy.

Re:Uhhh ARIA said different.

[Crypto Gnome]

... lower prices ...

I don't know what planet you're on, but I'm struggling to find these mythical "lower prices" I hear rumored.

Yesterday I saw

• at a retail music store
• an actual current release album
• with one CD (ie not a 2 or 3 CD set)
• for (australian) $39 and change (for the USians out there, that translates to ~$30 US at current exchange rates)

To my amazement I found that:

• it was not diamond encrusted
• it was not made of solid gold
• it did not include oral sex from the cute chick at the counter

I for one am struggling to find the value-for-money in this proposed transaction, so The Music Industry should not in any way be surprised to see "lower than expected sales" when they pitch suck LOONEY prices.

Keep in mind, people....

• a CD weighs approximately 0.56oz
• An ounce of WEED (pot/hash/marijuana) can cost as little as $50
• Those CDs you purchase cost ~$53/oz (ie more than pot)

Before or after???

[blankmange]

"It would be interesting to see what the numbers for the US or UK say."

Before or after the numbers were manipulated by the RIAA?

Interesting

[metlin]

Hmmm, according to this article it has not affected the sales in the US either.

But this article at ABCNews seems to indicate that its not piracy thats really affecting the sales, but services like iTunes -

"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 think that more than CD-Rs or mp3 piracy, its services like these which would affect the records sales.

Re:Interesting

[metlin]

Oops, wrong link - instead see RIAA statistics. Fact or fiction? and here.

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.

Re:Interesting

[phatsharpie]

If you check out the iTunes' list of top downloaded songs, it has always been current hits.

I personally love using iTunes to discover older music. Sometime I would stumble upon a tune that is familiar and try to find it on iTunes. And if I like it, I'd just buy it. For example, I just bought Kate Bush's "Wuthering Heights" just because I overheard it being played somewhere and thought it was interesting.

In fact, I rarely get the new stuff from iTunes, but I don't think that is the common modus operandi from most iTunes users.

-B

Re:Interesting

[Jucius Maximus]

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

Top 10 Songs for Today:
OutKast - Hey Ya!
No Douby - It's My Life
Kelis - Milkshake
Fountains of Wayne - Stacy's Mom
OutKast & Sleepy Brown - The Way You Move
Dido - White Flag (up to this point, this is the first artist on the list that I've heard of)
Coldplay - Clocks (it's been on this list for ages now)
Beyonce - Crazy in Love
Black Eyed Peas & Justin Timberlake - Where Is The Love? (Wasn't that a Hanson song or something?)
The Proclaimers - I'm Gonna Be

Top 10 Albums for Today:
Howard Shore - The Return of the King Soundtrack
Chingy - Holidae In (Single)
The Monkees - The Best of The Monkees
Sarac MacLachlan - Afterglow
Sarac MacLachlan - Remixed
OutKast - Speakerboxxx
Coldplay - A Rush of Blood to the Head (it's been in this list for ages)
No Doubt - No Doubt: The Singles 1992-2003
Dido - Life for Rent

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?

Has any article metioned this

[Dcboy]

Has any article mentioned that while music sales for 2003 were lower than those of 2002, less new albums were also released in 03 than in 02

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
_____________________

Re:Exactly!

[gantrep]

I'm not sure that I can believe that the only places available to you to buy music legitimately do not have the kind of music you like. Yeah, when I walk into walmart or target, I'm generally pretty disgusted with the selection, but there are easy-to-find better music venues all over. I just bought two non-riaa cd's from Borders, an underground hip-hop cd on the Definitive Jux label, and a disc of idm/glitch beats on Warp Records. Not only that, but there's a great chain of used, new and local music stores around here that caters to even more unusual tastes than mine. This is Nebraska, and what one would expect to be the low-end of selection as far as music-scenes go, is really quite good. I find it hard to believe the "I just can't find what I like" excuse. Unless you only listen to Polish grindcore or Japanese polka, you're probably not looking hard enough. Do your research so you don't get tricked into buying a one-good-track cd, and then pull out the phonebook. Someone in your area probably sells it. Failing that, try the INTERNET! Amazon is a great resource.

Re:Exactly!

[Hrothgar The Great]

I'm also from Nebraska, and I guarantee you that more people are listening to local and/or indie music around here than I've ever seen before, so I think you're absolutely right.

It would be nice to see a sales study done by some music store chains rather than by the RIAA, who do not really encompass the entirety of CD sales that are going on out there.

aussie aussie aussie

[SinaSa]

Can I just say, as an Australian I'm really enjoying all the sudden attention that the Australian nerd news has been getting on /.? It's great! Seriously though, I can vouch for this. Most of my friends are stubbornly insistent on buying their favourite bands new album as opposed to letting me download it and burn it for them. Most Australian bands are releasing their albums with a bonus dvd, or a bonus cd with extra stuff like live show video clips, etc. This is the kind of thing that stops people using Kazaa or BitTorrent MP3 sites. They are loyal to whichever band, and that free poster that comes with the CD is something you can't download off the 'net.

RIAA Bashing

[_RidG_]

I hate the RIAA as much as the next guy (if not more so), but I do believe that we should look at some numbers for US before wholly condemning the organization...yet again ;). I mean, after all, a single country, such as Australia, is not necessarily indicative of burning/buying patterns in US...although it seems that similar trends can be seen in numerous other regions...and after exercising common sense...and...

...*pauses to think*...

God dammit, RIAA. I can't even think of ways to defend you. Stop lying to us, you bastards! Stop with the "you are destroying your favorite artists" Jewish-mom guilt trips! Even if it were true (which it is not), and our "favorite artists" (by whom they apparently mean Brittney Spears and her ilk) will be unable to buy yet another $2 million sports car, then I think I will still be able to soundly fall asleep at night.

*Sigh* As an act of protest, I'm going to go out and send an angry e-mail to RIAA, coloring it a vehement red. I am sure they will read it carefully and alter their corporate policies, thus ceasing to be a terrible cesspool of biomatter waste. *rolls eyes*

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?

[Scarblac]

It is important to show this, because at the moment some extremely draconian laws are being implemented, huge jail terms for downloading music. Their given justification is that downloading music hurts the industry so much, that something like that is necessary.

But of course, you believe that just because something is morally wrong, that immediately justifies absolutely any punishment that a law could give for it.

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"?

Re:I use P2P instead of MTV to inform myself

[Anonymous Coward]

I hate the MTV moderators for being alive!

It looks like you misspelled 'Slashdot'.

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?

[MartinG]

Not that I neccesarily disagree, but can you explain why copyright infringement is wrong in this case. (without saying "because it's illegal")

Don't forget that copyright is a means to an end. If its not achieving that end and it's only effect is to prevent the spread of information then it's doing more harm than good. (I use the term information loosely)

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:

P2P = Album sampling

[jasonfncsu]

I don't know about anyone else, but RIAA has never lost an album sale because of P2P for me. I use P2P as kinda a sampling system to see what I wanna buy. Too many times there has been 1 or 2 good songs by a band, then you buy the CD, and get screwed because the rest is horrible. Record sales are down for one reason: music sucks now. All the mainstream rock/pop/hiphop/country stations are now playing the same mindless blather. Thank God for NPR (National Public Radio) and the BBC World Service.

Australians pay directly for every byte downloaded

[alien_blueprint]

In Australia we pay directly for every byte we download.

For our monthly ISP fee we are granted a certain number of megabytes that we may download without incurring extra cost. This "bandwidth cap" varies depending on how much you pay per month. Beyond that we typically pay some rate such as 15c per megabyte, or are cut back to dialup speeds.

Now, this doesn't directly affect the discrepancy discussed in the article (between the rate of people burning CDs for their friends and the lack of a corresponding drop in CD sales), but in general you have to keep this in mind when trying to draw conclusions from any investigation of illegal music sharing in Australia.

Of course, it might just be that illegal music sharing has no effect on sales elsewhere in the world, but it's important to realize that our usage patterns will be very different from areas that have unlimited downloads.

Why do we care about CD's

[mr_lithic]

The main story is not whether or not the latest single from Fame Idol is being bought off the shelves. It is about the continued mention of CD's as the medium we should be concerned about.

The Real Story is the Music Industry completely dropping the ball on the delivery of digital music formats. When Napster raised its head and "threatened" CD Sales, the industry should have studied and copied it.

Instead they tried to shut it down and failed miserably. The current tactics are just the tail-end of a poorly implemented policy that has simply highlighted the availability of online peer-to-peer media to people that normally would not engage in these activities.

There are online music sellers now but if the Music Industry had acted earlier when peer-to-peer had first come into prominence, we would not be talking about CD's at all. Compact Discs would be the same as Cassette Tapes and Vinyl Records. They would only be sold to those who had not adopted the new digital technology or those who like to hang onto older formats (like reel-to-reel machines).

By now instant access to entire music catalogues could have been made available online (not just the latest hits) and the price would have dropped to a reasonable amount, due to true competition in the marketplace. Independent artists would be setting up their own operations based on similar business models. It would have been similar to independent record pressing, where it would be servers holding and distributing the collections rather than an industrial process.

Any mention of CD sales at this time is just another reminder of how much they messed it all up.

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.

Basic wrong assumption.

[SharpFang]

The music, software and all such industry assumes, that piracy - scenario:

Customer with product - Producer without money

replaces classic "sale" scenario:

Customer with product - Producer with money

In fact, it usually replaces a different scenario:

Customer without product - Producer without money

The industry loses nothing at all. If they want $30 for a CD album, I won't buy that album. Simple as that. And doesn't matter if I downloaded it or not, they wouldn't see my money ever. At best, I will be pissed off at their ridiculous price and refuse to buy it later when it's cheaper, simply because I don't support thieves (yep, I mean what I just said!)

But when I download the album, another situation appears. They may gain one, rather esotheric thing from me: Gratitude. Maybe I'll buy some crappy product of theirs, just to support them in the future, just to express my thanks. Maybe I will buy "colector's edition" of what I copied earlier. Just because I like it so much.
Under one condition: They can't piss me off before that. If I hear about stupid lawsuits, sites closed due to ridiculous copyright issues, evil marketing techniques - then, sorry. I'll gladly make a copy for my friends: "Hey, don't support that assholes with your money, get a copy instead!"

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.

AU sales already tiny and bandwidth pricey

[dnadig]

OK, so, a few MAJOR differences:

1: Australia pays an INSANE duty on imported music, to the point that when I lived there a few years ago, CD's from the US and UK cost TWICE as much as local fare. As such, it was ALREADY a culture in which people swapped tapes or (more likely) purchased all their music on overseas trips, particularly to asia, where it was ALL boot.

2: Bandwidth is by the byte.

Put these two together, and the stats don't add up.

Hey, I hate the RIAA as much as everyone else, but it baffles me that people can think that in the CURRENT status quo, the internet hasn't hurt CD sales. I've bought fewer CDs, everyone I know has bought fewer CD's. My babysitter has NEVER bought a CD. Neither the math nor the social motivation makes any sense.

On the other hand, the fact that 1980's CD sales we're likely artificially inflated by people "rebuying" their LP collections, never seems to be mentioned, and of course, just because people are buying fewer CDs doesnt mean they wouldnt follow some OTHER (itunes or whatever) business model.

Actually quite the reverse...

[CountBrass]

I downloaded the Dixie Chicks off Kazaa. Never heard them before but decided to give them a try after hearing about the absurd US boycott of their music.

Loved it so much I bought all their CDs and went to see them live on their Top of The World Tour.

Without MP3 sharing they wouldn't have got a penny of my money and I'd have missed out on a great band. (I dislike country as a rule so wouldn't have bought a country cd on the off-chance I might like it).

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!

[gehel]

People don't pay for stuff if given the choice not to.

I'm not so sure about that ... As an example : in the town where I live, there is a bar where you can pay what you want. Their is no fixed prices, you choose. If you dont want to pay at all, no problem. And believe me or not, but it works ! People actually pay more for a beer than what they would in another bar !

Ok, that's with "real" stuff, you actually get something more than a bunch of bytes ... It might not work exactly the same for music on the internet ... But still ... and if you go check the numbers at Magnatunes you'll see that their is people who pay more than requiered ...

Re:Au contraire mon frere!

[MrAngryForNoReason]

If I downloaded his music and liked it then I would buy the cd. In the same way I buy DVDs even though I have already checked out the movie by downloading it. Also just like I donate money to sites even though it isn't compulsory, if I think a site like a web comic is really good then I donate money to support it.

I think you will find people are much more willing to give money to the artists than to a faceless corporation. Or in the case of DVDs willing to pay for quality and added content.

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!

[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.

As for the UK

[Spad]

We've had a very good year for the music industry in the UK. CD prices have dropped, which has lead to record sales.

On several occasions, the BPI (UK's RIAA) have politely told the RIAA to piss off when they've tried to convince them to start suing customers. Not only are the BPI just generally much nicer people, but they also realise the futility of suing their customers while their sales are at record highs.

The BPI also believes that offering singles for download will help revive the crippled singles chart.

For the moment, at least, we're much better off than the US is.

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...

Here is a recent register story, covering UK sales

[Osrin]

http://www.theregister.co.uk/content/7/34693.html The original poster asked for trends in the UK and the US, this story is not perfect for the cause but it will help complete one more piece of the puzzle.

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.