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Apple Holding Back the Music Business?
conq writes "With average weekly download as of Nov. 27 sales down 0.44% vs. the third quart, BusinessWeek speculates that Apple might in fact be holding back the music industry." From the article: "As has been true since the start, iPod owners mostly fill up their players from their own CD collections or swipe tunes from file-sharing sites. Now legal downloads may be losing their luster. According to Nielsen SoundScan, average weekly download sales as of Nov. 27 fell 0.44% vs. the third quarter. Says independent media analyst Richard Greenfield: 'We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players.'"
Oh no! Downloads are down less than 1% since the third quarter!
Seriously, it's right before Christmas, as the article points out. Nobody's going nuts buying music because they're spending all their money on presents and other holiday shit. Apple says they're selling a crapload of gift cards, and I believe them, given that everything iPod seems to fly off the shelves, virtual or otherwise. Regardless, since you no longer have to buy the physical media songs come on, there's no reason to buy them when you're doing your normal Christmas shopping, so sales very well *should* be down.
iPod sales are nuts, as usual, but that doesn't mean that music has to be selling, either. How many people you know, out of those who have bought iPods recently, are buying their first one? I'm sure a large portion of whatever iPods they're selling are peoples' second or third such devices. They're not going to be re-buying songs just because they got a new player, at least for now...
All this amounts to is another chance for the music services that lost (and it was pretty much over before they even got started) to bash Apple in a futile attempt to gain some traction. It's pointless, though. There's no buzz about Napster or Rhapsody, it's all iPod, iPod, iPod, for better or worse.
Game... blouses.
Well, 0.44% is not too much to whine about (less than half of one percent?) It could be that maybe a lot of popular *new* music didn't come out during that time compared to the quarter before.
Not to mention a lot of the MP3 player sales they're basing their estimates on could have been bought as Christmas presents.
I think they just WANTED a big growth in sales and things just don't always work out that way. They should compare things year to year, not quarter to quarter...
That's my $0.02
Critics say Apple's proprietary technology and its refusal to offer more ways to buy or to stray from its rigid 99 cents a song model is dampening legal sales of digital tunes.
If music industry is considering non-propietory technology and prices below 99 cents/song, there is nothing Apple can do to prevent that. All they have to do is put their stuff on mp3tunes.com
When downloads start costing significantly less online than on CDs (just like CDs should cost significantly less than CDs) people will buy quite a bit more.
-- I prefer the term "karma escort."
Yes, iPod sales are up, but those sales aren't going to transalte to iTMS purchases until AFTER the iPods have been opened. The story says that gift card sales are "off the charts". You can expect downloads to jump dramatically beginning December 24th.
"We're not seeing the kind of dramatic growth we should given the surge in sales of iPods and other MP3 players."
Hmmm... sales suck on CD, sales suck online... maybe it's time for the record industry to reconsider its current business model of pushing albums where the musicians lose almost all control to producers who churn out an album with three good songs and ten filler tracks.
Jobs wants to lower the cost of songs, but the RIAA has insisted that they raise the cost of new songs in order to lower the cost of other ones. Many people are not willing to pay $.99/song muchless $1.xx for one. And the complaint from Napster in that article is pathetic... they are just upset that Apple dominates the marketplace. You want more sales... then lower the price!
http://religiousfreaks.com/Is 0.44% a statistically significant number?
I.E. So of an average of 1,000,000 downloads, that means last month there were only 995600?
Seems like someone is reading alot into it.
This is a case of unreasonable expectations.
When CD's came out, the vast majority of music lovers replaced the albums they already owned with new CD's.
I seriously think that there are music execs out there who were hoping that a new format (downloaded music) would mean that we would all want to buy our entire music collections all over again, in spite of the fact that the power is in our own hands to convert files this time.
Consequently, the back-catalog sales are absolute shit compared to what the early days of CD's were like. Lots of people are using iTMS to buy songs from Fountains of Wayne, Death Cab for Cutie, and/or the latest pop princesses, but nobody's re-buying the old Pink Floyd albums they already own in another format, and that's what's driving them nuts.
Why, we even have the audacity to BACK UP our media files, so we no longer need to buy a new copy every few years because of loss, damage, or wear. It's KILLING their sales numbers.
Information wants to be anthropomorphized.
Or, heaven forbid, there might be some people buying multiple iPods...
For example, over the course of the product, I've owned 4 different iPods. Apparently this means that my online music buying should have quadrupled, which it did not.
Thus, the link between iPod sales and buying music online is not directly proportional.
This is such a load of crap. It was RIAA who insisted on DRM before Apple could offer music. So Apple developed FairPlay to make RIAA happy, and thus was able to get all of the music we see in iTunes Music Store. This is whining because of the monster that was created. Apple owns the only really successful online music store. Apple owns the only portable music player that works with FairPlay. Music labels can easily get around this by dropping the need for DRM.
This is exactly the lock-in future that DRM brings to the world. The music labels are crying bitter tears because they don't control the locks. Whaa whaa whaa. What would be different if Sony had succeeded instead of Apple? Do we think we'd be seeing Sony offering whatever they had to everyone? No. DRM simply sucks. It's anti-consumer, anti-competitive and restricts the growth of the marketplace. Reap what you've sown, you greedy bastards.
That there is one very compelling reason NOT to buy legal downloads. DRM. No, not for the tinfoil hat reasons, but for one very simple one: interoperability. I can't take my DRMed iTunes AAC file and play it with my MP3-CD car radio. I can't play it via HMO on my TiVo. I can't play it in any other portable device. While I do own an iPod, I also own other devices that I listen to music on. Those can't play AAC, let alone DRM AAC. And I'm not even going to get into WMA-DRM.
Burning it to CDA and re-ripping it doesn't count. It's annoying and drops all the metadata, in addition to the transcoding quality loss. If they want to sell me music, it MUST be in a non-DRM format that I can use on ALL of my devices, MP3 for example. If they refuse, I'll take my money/time elsewhere. Indy, filesharing, certain russian sites, etc.. And I'm sure I'm not the only one. I'd be happy to pay $1/song, for high-quality (LAME-Standard minimum) MP3 or FLAC audio files. Hell, let me pick the format and bitrate and charge me a little more for the bandwidth for the higher filesizes. Oh, wait, someone else allready does that.....
0.44%!? That's less than 1%, hot damn the world's rebeling against music! That's like.. DOOMED!
Totally ignore the fact that Christmas is comming up and people stop spending money on what they want and start saving for others, very often presents arn't music so the money goes else where.
I like muppets.
I am the same way and for a very practical reason: the quality (sound quality) of digital downloads is inferior to that of a CD. If Apple were to offer high quality downloads (using the Apple lossless format for example) I would start buying downloads even if the per song price were over $1. Maybe they could offer the "standard" 128k AAC files for $1 and the "audiophile" Apple Lossless files for $1.50 or even $2.00. For a lossy compressed format, ~200kbit VBR MP3 is the minimum I will accept. (I encode my own CDs using LAME preset standard and that seems to average out around 200k.)
Also, they need to come up with a solution to the "segue" problem. Many albums are mixed such that one track segues smoothly into the next. You get this when you buy the CD. When you buy digital downloads you get hiccups (gaps) between the tracks. Kludges like a crossfade in the MP3 player are not acceptable. I want the exact segue as mixed on the original CD!
There are two pieces to fixing this: the files themselves need tags indicating that a segue exists into the next track from the album and, for compressed audio formats, there needs to be a tag indicating any "gap" (coding delay or frame padding) at the beginning and end of the file such that the MP3 player can strip this off during playback. (The LAME encoder does this and so you get gapless playback on an enabled player eg Foobar2000.) The other item the tags should contain is a recommended fadein and fadeout to use when a track is not played among the other tracks of that album. That way you dont get abrupt cutoffs when playing songs in shuffle.
Did I mention I still buy music on CD? Lots of it too!
I bet I only find about 40% of the stuff I'm looking for on iTunes Music Store. I want to get a lot of music I grew up listening to but is not available on CD or online. Why don't these dimwit music labels put all of their back catalogs online? They sit on piles and piles of music that, if made available, would earn them money. Unlike pressing and shipping CDs, getting them online is a one-time cost that will easily be made up in sales.
I'm sorry, but I've stopped purchasing RIAA encumbered music. There's plenty out there, and I don't need to support greedy corporations who don't understand their customer wants or needs. It only took a few years, but I finally caught that the RIAA is not interested in making sure that I remain a customer, and I've complied by taking my business elsewhere. Magnatune, Positron Records, Metropolis Records... they all get it. Soon other companies will understand that the problem isn't their customers (who want to support them), but the marginalized trade group cartels that are holding them back. Until this happens, my cash goes elsewhere.
Sorry, RIAA... you had your chance.
I'm sure draconian cd prices and lousy pop music have nothing to do with a decrease in sales.
Business Week is the least capitalistic of all the business magazines. Their core reader is the useless MBA whose sole function is gumming up the works while collecting one more paycheck toward retirement. You can disagree with the Economist and WSJ but at a minimum they are anti-government intervention in all ways (good and bad for business). I generally find myself in agreement with the libertarian ethos of those, but can't stand the editorial bent of businessweek. Businessweek is pro corporate welfare but anti government intervention in anything that might hurt business.
They are protectionistic, rearview focused, and generally useless for even lining a bird cage. The sole redeeming feature is that they are pretty good at calling the top of a mainia (by focusing on why you should be there now).
It has always surprised me that the music companies blessed Apple's entry into music, when the most basic sales calculations were demonstrating that the iPod was the thing that legitimized the public use of shared music for a large subset of mainstream consumers.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Because those greedy bastards want a nickel EVERY TIME YOU HEAR THE SONG
if you steal from one source, that is plagiarism, if you steal from many, well, that's just research.
It's mp3 this year but who knows what audio format is coming around next year? Are you going to be able to play your iTunes downloads 10 years from now?
I'm glad Apple is doing well with iTunes, but it's just not for me. I want a disk. I want a disk I can rip to the PC and portable device of my choosing whether it's on Windows, OSX or Linux. And I especially want to be able to find something that can still play that CD 10 years from now.
That's our life, the big wheel of shit. - The Fat Man, Blue Tango Salvage
.44%. Half of 1 percent. And what is their margin of error? Somehow I doubt Nielsen SoundScan has THAT high a precision.
* We dance where angels fear to tread *
Simply put, record company execs are looking for entitlements.
Ultimately, they think they are intitled to make a profit every time someone listens to a song under their umbrella, or iron fist.
So if I own a lot of LP records, and want to listen to them in the car (car turntables are not very stable unless you drive really carefully) they cry "No Fair!" and get a tax put on casset tapes.
If this were really about piracy, that would be the only thing they would mention. The fact that they are complaining about people filling up their iPods with music that they already have a legal right to tells us what is really on their mind. They feel entitled for people to buy music all over again. And in another 10-20 years they will propose yet another format and expect it over again. Like a corrupt utility company, or a corrupt government, record companies want the right to tax us and then keep that money for themselves.
With any luck Artists will control their own music, and profit from it by then and the record companies will be dead.
I hate Liberals and Conservatives.
If you are a Liberal or a Conservative, then HAVE A NICE DAY!
Courage.
The music industry insists that we all should buy our music collections all over again. It's legal to copy the CDs for your own use - just as it's legal to copy DVDs for your own use.
That's why the laws to make it illegal to break encryption - it was a way around consumer rights. You can rip DVDs for your own use, but you can't break encryption, and the movies are encrypted.
This nonsense of attempting to DRM CDs is just the music industry trying to play catch-up. Trust me, I've ripped my 200+ CD collection, and the music industry would have me pay for every single song a second time.
The opinion above is fiction. Any similarity to real opinions, including facts and logic, is purely coincidental.
He's still got a point.
No he doesn't.
He's implying that without Apple, the music industry would have some great online business going and be selling tons more music. That's clearly bullshit. If it were true, they would have their thing going dispite Apple, and people would be using it.
The music industry is pissed because Apple came up with a device that everybody wants, and instead of using it to make zillions of dollars for the music industry, they're using it to make zillions of dollars for themselves.
Boo hoo.
Apple doesn't owe the music industry *anything*. If the iTunes music store didn't exist, people would *still* buy iPods like crazy, because it's the only player out there that is user friendly, stylish, and completely impartail to whether you choose to listen to licensed or DRM-free content. It seems to me that iTunes is just a big shield from lawsuits, because as long as it exists there are considerable and obvious non-infringing uses for Apple's device. iTMS is Apple covering their ass. If this Napster guy wants more control, then he should come up with a device that people like better than an iPod and tie it to his service instead. He won't though, because he can't build a device that allows people to play pirated music, and consumers are fed up with paying high prices for music.
Apple isn't holding the music industry back, consumers are. They've reached the limit of how much money they're willing to fork over. They're going to have to be sitisfied with their revenue pit just being bottomless, and learn to live with the fact that they can't keep making it wider too.
Yeah, that's what I thought.
I know dozens of talented musicians in active local bands, but I don't know anyone - not even a friend of a friend - who makes a living from their band.
The solution? Let go of those cherished dreams about getting "discovered" and give your music to the world for free. If you don't like the record industry, that's the best way to screw them. Do it for the recognition. Do it for the chicks. Do it because you enjoy it. But if you're doing it for the money, you'd be better off buying lottery tickets.
Step into a huge movement. Don't Tread In Me.
Where is the lock in? I don't see it in either example. The lock in is present only in the file format, not the player itself. With MP3 formated files, I can move from any one player to any other player. Buying an iPod does not force me to buy from iTMS. Likewise, buying a Microsoft player does not lock me into WMA files.
T Money
World Domination with a plastic spoon since 1984
Chris Gorog, CEO of Napster Inc. (NAPS ), which sells both subscriptions and downloads. "You have this device consumers love, but they're being restricted from buying anything other than downloads from Apple. People are bored with that."
Chris,
I know this is hard to wrap your head around. The iPod is a media player with a built in hard drive. There is no vendor lock in. I've been able to downlaod music from napster, kazaa, soundclick, and a variety of vendors. Amazingly, they all work fine. AIFF, WAV, MP3, ACC, all work fine on my iPod. Should your's behave differently, RTFM.
What the iPod doesn't do, is support every god damned DRM scheme on the planet that lets you and your corporate cronies "lease" your DRM infected music to iPod owners. Quite frankly I'm not interested in DRM laden crap from napster, real, or anyone else including iTMS. I bought my iPod to carry around the large collection of music I already have, not to populate it with new music that has been approved by some industry suit.
So, in conclusion, the iPod is a hard drive. I can get files of any type onto it with ease. The iPod is a media player. I can play a fair variety of widely available media types without problems. The problem is in the DRM schemes that lock content to specific devices.
The iPod did not lock me into anything, your DRM infected business plan locked me out of your customer base. I am not interested, and it has nothing to do with my iPod.
I have not, nor will I ever "lease" digital music for my device. If I am paying with real cash, I want real bits I can twiddle as I see fit.
Wrong. He's implying that Apple has created a device that Apple can sell music for.
How does that make me wrong? Can't he imply more than one thing in an article?
I fail to see how anything Apple does makes it OK for anybody else to bitch that they're not making money off of it. If you want a piece of the action, it's not Apple's job to open the door for you. In fact it's their job to keep it shut and protect their profits. It's rediculous for anybody in the music industry, or any other business, to expect Apple to do them any favors.
Who cares if other businesses aren't permitted to offer alternative services?
If you want to make money in the digital music market, you need to do it yourself. Why should Apple help you to make money off their product?
If this guy is so smart, he should make a better store and a better player. If he's right, it should be possible, and people should flock to it and leave the iPod behind. Anything he can come up with that nets the recording distribution industry more profits is pretty much guarantreeed to be seen as *worse* by consumers though, so he'll never pull it off. He doesn't want to offer you choice, he wants Apple to stop being so damned nice (in his opinion; obviouly not in your opinion) to consumers because it's preventing them from getting away with charging more (where more is most likely a pay-per-listen or some other recurring revenue model).
We love Apple, the iPod, and iTunes. Who cares...
I don't understand why you assume that any opinion of Apple or their products has anything to do with my point. I'm talking business here, I'm not being some fanboy. I don't have to like or dislike Apple's practices for me to see why it makes sense for them to do that stuff interms of their bottom line. The goal is to make money, not to win a popularity contest.
...is that starting around the end of November, a lot of people who bought iPods just took them home and wrapped them in colorful paper instead of opening them and loading them with music. Wait.
Nobody will sell those MP3 files on-line. So you have to jump through extra hoops to get to them. I'm sorry, but I'm not accepting MP3 as a non-lock-in example.
"Buying an iPod does not force me to buy from iTMS."
Okay, maybe I'm being ignorant here. What other services can you buy iPod compatible music for? I'm dead serious, I'll back down if you can name one or two. Part of my reaction here is that I CAN'T use my existing music service with an iPod, but with other players I can. You'd be doing me a huge favor if you could suggest an alternative music service with a subscription model that I could use an iPod with.
Failure to fill a market void is not lock in. Your subscription services failure to offer iPod compatible music is not lock in. You are the one that chose a subscription service which locks you out of using the iPod.
T Money
World Domination with a plastic spoon since 1984
This reminds me of the "Apple is dying" hogwash. iTMS sales are down a bit so now Apple is holding back the music industry? Give me a break. It if wasn't for iTMS, the music industry's main mode of doing business with the internet would be the same as it was in 1998-9 -- suing the hell out of Napster, Gnutella, etc. users, and extorting money from anyone forward-thinking enough to invest in such endeavors. Apple came along and showed the industry that there was a way to make money selling legal downloads, and now they are bitching that it's not enough. They want the price raised; they want more DRM; they want more restrictions and more costs added until we are paying full album sticker price every time we listen to a song, and they're still complaining that sales are going down. Even then it won't be enough for these greedy corrupt egotistical blowhards. Given their attitude they should be happy anyone buys any music from them at all.
In your case, it sounds like you've "outgrown" buying more music. You aren't into new artists or looking forward to new records coming out.
To get my 70+ year old father to buy more music, you'd have to bring Bob Wills back from the dead to record another album.
I don't think you or my father are the kind of customer the RIAA is trying to attract.
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