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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.'"
My Ipod's full, I can't buy any more music!
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
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."
"This even roots my computar, suckwit."
the preceding comment is my own and in no way reflects the opinion of the Joint Chiefs of Staff
Could it be that music just sucks 0.44% more than the previous quarter? :)
Out of order? Fuck! Even in the future nothing works! - Dark Helmet (Rick Moranis) "Spaceballs"
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.
In other news, the RIAA and major music industry conglomerates have announced new terms for customers purchasing and listening to their members' music.
"All people do with their CDs and iPods is listen to them. People think that they don't have to pay anything else beyond the initial purchase price. But what they don't understand is that they need to pay royalties every time they listen to them," said RIAA spokesman, Bob Degalhart. "Every song you play on your stereo or iPod should require some form of small micropayment to us for the right to even play that music. Everyone should realize that purchasing the music is only the first of many steps."
The RIAA and the industry plans to push legislation to require all stereo equipment, MP3 players, and hearing aids be fitted with special software that is capable of completing micropayment transaction per listen. Industry member Sony says that it has special software available for installation on home PCs for this purpose and plans to deploy it in the near future.
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!
My lady and I have a tendency to purchase a LOT of music -- we've filled a few 400 disc changers in the past before going with a wholehouse MP3 distribution system.
Our reasons for buying less music is:
1. Dislike of Sony and the RIAA -- where we used to buy 3-4 CDs a week at Borders, we're lucky to buy even 1 a month because of their strongarm tactics. Until Borders starts carrying the popular indie bands in their area, we won't buy CDs. Some indie bands in our area have sold 2000+ CDs privately without record store support. If they expect to be part of my community, they better do more research.
2. Bigger support of the ma-and-pa brick and mortars. As our retail stores that we own lose business to the dotcoms and the super stores, we've found that by supporting other locally owned shops, we see more locally employed customers at our stores. It is the ultimate "outsourcing" to see your community spending money outside of the community to save on sales tax and maybe a 5% difference in price beyond that. 14% is still a huge savings, all from government coercion.
3. Income. Our income this year is about double the last 3, but our income in the last 6 months is down over 70%. I've been putting more of my income into real savings (gold, silver, property) to weather to storm ahead. I've also expanded my market from just-the-Midwest to the entire world, and I expect it will take a year or two to get back to my first half of 2005 income levels.
4. Quality. The quality of the mass produced records is terrible. I can't listen to the top 40 record stations at all -- every vocalist is enhanced, delay and reverb is worse than the 80s, and the compression destroys any fidelity that might have made it through the overproduction period. Garbage in, garbage out, garbage unbought.
5. Promotion. I don't feel any desire to pay $50 to see a concert of 3 bands I barely know. The indie scene is usually $6 to $12, I see 2 amazing bands and 3 new bands cutting their teeth. $2 beer, $4 calls instead of the big shows where we paid $14 for a drink recently ($110 per ticket). Without cheap promotion the records won't sell.
6. Collusion. Try to get tickets today to any popular show. The rules governing ticket scalping are created specifically to take care of the few scalpers who are licensed by the local government. It has made shows nearly impossible to attend to. One popular show we were willing to pay $60 per ticket for was sold almost entirely to 3 ticket scalpers.
7. No desire. There are so many new ways to be entertained (due to the web) that music-on-CD just won't cut it anymore. I've been talking to a local show producer who is finding better ways to stream live shows to the web in a high quality, high fidelity, well produced show. I can't wait for his work to come to fruition.
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.
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 problem the music industry is facing right now isn't a decline in the sales of new music, it's just that their cash cow of back catalog replacement sales is withering. They had intended to salvage this buy going with DVD Audio and trying to get people to re-buy everything yet again.
The problem for them is that there's nothing compelling about new music formats other than MP3/AAC. DVD Audio may be wonderful, but to the average person who just wants to listen to some music in the car, or while working out, it doesn't matter. The high end audiophile types might get into it, but there's not enough of them to create the necessary economies of scale.
I would argue that Apple/ITunes is boosting new music sales because it makes it so incredibly easy. If I find a new artist, I can e-mail you a link, you click it, and 30 seconds later, you're downloading the new music. No trips to the store. No forgetting about that cool new album your friend recommended. Plus the IMixes give another way to find music you might not have bought before.
So it is good for the music industry in the long run, but they have to learn to accept the fact that the crack pipe of back catalogue music sales is running out of smoke. It's going to be hard times for them for a while because even with growing new album sales, they're likely to see an ongoing decline in revenue.
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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.