RIAA Loss Report Contradicts Nielsen Sales Record

DerekAtLC writes "In a not-so-surprising twist of the tables, RIAA reporting of 'losses' is a little bit off. An interesting blurb at Ars Technica referencing a Kensei News article points out that Nielsen's Soundscan (Which tracks retail point-of-sale numbers for the music industry) shows a 10% increase in sales from Q1 2003 to Q1 2004. The RIAA has recently reported drops in revenue from last year, citing online piracy as the main problem. The crux of the issue? The RIAA hasn't been talking about sales or revenue in terms of sales to consumers or money generated via those sales. The RIAA talks about losses in terms of number of units shipped to retail outlets. The article points out plenty of problems with this (and reasons why we are seeing the trend), but it is fairly obvious that the RIAA is not reporting the most 'useful' numbers to the public."

Comments

Dont forget

[Datasage]

They also tend to count every single pirated copy as a loss. Even though, if forced to buy, most of it would not be purchased.

This is nothing new

[PimpbotChris]

ARIA tried to hide their record CD sales from the Australian public Music industry way off track with song and dance about falling sales

Re:Out of business stores dont keep inventory.

[AhBeeDoi]

Less stores selling music means not only are stores keeping smaller inventories, but some store inventories fell to zero as they left the business. There's just plain less "unsold" disks sitting in the system.

This seems like a highly debateable point as to causes of lower inventory levels. Traditionally, inventory levels have been an indirect measure of confidence in the economy. However, utilization of JIT methods aided by technology enables businesses to run at lower levels than previously thought acceptable. In fact, there really isn't any contradiction to the principles of economic order quantity because both ordering costs and turn around times are much lower. This is truly a new paradign.

Re:More Mega-Store Efficiencies and Other Trends

[Tiram]

As to the drop in international sales, I think that is more likely to be a shift away from the heavily-advertised American groups, and toward the less-advertised local groups in each country. Once again, Internet Radio and downloads would allow listeners in each country to discover those other groups, rather than simply being led by U.S. advertising. I assume that many, if not most of those smaller groups' sales in other countries are _not_ measured by the RIAA.

I don't know if this is a trend everywhere, but it seems to be true for Norway. First quarter this year, the sale of Norwegian CDs* was up by 46% volume (54% value) compared to the same period last year. 21% per cent of the CDs sold were Norwegian, up from 14% last year.

* Not including singles and DVDs, which probably would have pushed the numbers even higher.

Ref: Sterk økning i salg av norsk musikk (in Norwegian, I'm afraid ...:)