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!

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

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

[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.

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.

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*

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"?

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?

[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.

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.

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)