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iTunes Sales Ban Does Increase CD Sales
Guinnessy writes "According to the New York Times, some music labels have deliberately stopped selling some new singles on online stories such as iTunes or Rhapsody while promoting songs on the radio, so that listeners will rush out to buy the CD album instead. The album appears in itunes at a later date. Not everyone seems to think this is a good idea. From the article: 'The labels are shooting themselves in the foot,' says Rhapsody's Tim Quirk. However, Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It!"was downloaded approximately 5.3 million times in the same release period."
I want the names and addresses of those millions NOW!
From the article..."Island Def Jam offered a discount to retailers who stocked the album, allowing it to sell at stores like Target for $7.98 last week" This is a great example of someone making up stupid numbers. The fact that more CD's were sold because there no downloads sold makes complete sense. If these people, who were going to legitimately buy a CD could not buy it online, then they would buy it in the store. If they were allowed to buy it online, would they buy it TWICE? The important figure (which are not revealed in this meticulously researched article) is which way did they make more money or which way did they move more units. The fact that they sell less CD's when there is another format to buy the media should not be a surprise to anyone (except for record execs, who can't count).
Nothing great was ever achieved without enthusiasm
One sample? You draw conclusions from ONE sample? Hire some statistician, would you?
There are SO many variables to be taken into account that could influence that. Do they target the same audience? To give a very drastic example, if you compare CD sales to download of a Techno song and a Country song, it does NOT matter when it comes out on which medium to predict almost flawlessly which one has a higher download and which one has a higher CD count.
Were they released at the same time? If it is released around Xmas, that would boost CD sales compared to downloads (it IS after all easier to wrap a CD in gift paper than a bunch of bits). What's the weather like on release day? Bad weather and I'd rather download it instead of going out in the pouring rain.
Do the CDs offer the same "goodies" that come with the CD? Do they both offer the lyrics in the booklet, for example, or some pictures of the artist? How about the CD cover?
So please, before drawing conclusion from ONE SINGLE sample, at least make absolutely sure that the results are comparable. Or, better, get a few 100 samples before jumping to a conclusion!
Aaaaaand, let's not forget: If it's not available from legal download... especially if the CD is DRMed into uselessness.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
... people turn to newspapers after leading news agencies refuse to publish new content and breaking news on their websites.
Nothing more statistically meaningful than a single data point! Their powers of extrapolation are mind boggling!
now that we've compared 2 artists we finally know the truth about music consumer habits!
-- lol pwned
And why should anyone care?
hey, folks, it's epiphany time! -- the default physical medium for music sales has changed. it isn't Edison cylinders, Brunswick 77s (all "78" record makers used a different speed), 3-3/4 IPS 4-track tapes, or CDs, it's become electronic transfer.
selling CDs promotes ripping without any content copy-limiting software system. if the pinheads in Big Music had their schytte together, they'd stop shipping physical media, and sell it all online through iTunes and the like.
but all they have together is their off-key whining....
if this is supposed to be a new economy, how come they still want my old fashioned money?
What they're obviously missing is that denying iTunes sales increases CD sales which translate into more piracy.
Good plan.
A feeling of having made the same mistake before: Deja Foobar
In scientific tests, one can take a solution, mix it in another solution, and observe the results. Then one can make a single change keeping all other variables identical and perform the same tests. Those results are (arguably), if not valid, then at least a decent indication of a pattern. This summary (and I presume the article?) attempts to use this methodology with music artists -- something that by its very definition stands itself apart from science. Just because one individual's CD sells a certain number of copies through one venue, while another does comparatively poorer through another does not mean that the results are valid.
First you are taking one individual CD's sales through a store and comparing them to another CD's sales through an online distribution. While this test is almost impossible to perform (release the song at the same time through both channels and see the online distribution win and people would say that it simply hurt the CD sales, or alternatively, vice versa), it might have been a better comparison to simply take one popular artist's newer album, release it exclusively online and compare it with previous releases. Even this is not an indestructable argument, but at least you would be comparing Granny Smiths to Red Delicious, and not fruits to vegetables.
Now I am by no means a scientific person (having a greater interest in history) but it astounds me (through every century) when one side tries to sound scientific by saying, look! ho! this way works better and one can see it conclusively because the stars are in the sky and not in the ocean! This was pretty much a complete red herring of an article.
"If you're buying a Picasso," he continued, "you can't just buy the upper right-hand corner."
This is a weird analogy... if I buy a single song... that's not like buying the upper right hand corner of a Picasso (though with some of Picasso's work I might enjoy it more). It's just like buying a single painting... you select the one you prefer and purchase it. You don't need to buy the whole body of work that an artist produces to appreciate the artist... a song I would equate to a single painting... meanwhile an album is just multiple paintings by the same artist.
At a buck a download... wouldn't they make more off of the album than at the 8 dollars they are selling the thing at Target for? How much does it cost to produce and distribute these CD's to each of the retail chains? How many of those CD's that are produced are in fact sold? So how many just sit on the shelves forever? Or... if you don't produce enough to meet demand... how much money have you lost opportunity costs?
Digital just seems so much more efficient... and this robbing peter to pay paul is silly... yes if you only sell a track in a single medium... of course the volume will rise for that medium... but in the end are you making more money or less? (Say you sold 300,000 tracks on iTunes... cost/benefit?)
Digital uptake is just ramping... if they start doing silly things like this to make it harder for consumers to get their content... either they'll go back to piracy... or it'll stop the whole legal digital distribution before it's even had a chance to become mainstream.
It therefore seems hard to argue that file sharing and digital distribution has a negative affect on music sales.
A-Bomb
The only possible conclusion you can get out of this is "customers don't buy the same product twice".
------- "From bored to fanboy in 3.8 asian girls" ----------
This fails so many statistical tests for process control and would never even be eligible for something like an Annova (test for statistical difference) tukey-kramer test. They find one demographic of people, internet buyers. Split them in two. Offer the download to 33% of the group, deny the download to 33% of the group, and let the other 33% have the choice to steal/buy online/buy the cd ect. All the while exposing them to the exact same marketing, radio singles, and ensuring their purchasing habbits are the same. Only then can you even begin to test which group is statistically more likely to alter their purchasing habbits.
In other words, doing all of the above is hard and takes time and just coming up with bogus conclusions is so much easier.
I can't wait until the RIAA gets so much control over the music industry that they legally charge each user every time they listen to the song. Hell, they'll charge the user 1 cent per second the song is played. It wouldn't be fair to pay the same price for a 2 minute song and a 4 minute song would it?
When that day happens, and it looks like it might, the RIAA will finally implode and independant music will return in a blaze of glory. Or be outlawed as a potential communication medium for terrorists. One of the two anyway.
CDs are easier to pirate than DRM protected iTMS songs. At least at the same quality.
Search online before you rush out and drive 15 miles in your SUV to get that latest CD.
Message to the music industry:
The horse and buggy distro system of funny plastic disks has been superceded by an Internet. Tune in or drop out.
You mean when a band puts out a cd with one good song and a pile of crap that cd sales are higher when people are forced to buy the entire cd to get the one worthwhile song than when they can simply buy that song alone.
The real story here is not "Itunes hurts cd sales" its "Itunes promotes better music". The a-la-carte style of music downloading that itunes offers punishes crappy cds for sucking and rewards good ones for being good.
Noone will in about a year. With a name like "Ne-Yo" I smell marketing gimmick all the way. Record companies only care about what will make them cash now.
I predict Ne-Yo's successors will a group named "Tri-Nitee" and some chick with a large wardrobe named "Morph-Eus"
To Alcohol! The cause of, and solution to, all of life's problems.
Here's my dilemma. I like music and I like my computer. I used to like CD's, but I like my computer more than I like CD's. I don't like the mixed-bag-of-root-kits-and-DRM that CD's want to put on my computer, so I don't buy them. I also don't like the DRM from iTunes, but at least from them I know what I'm getting. But, I've never bought from iTunes. So, where should I buy my music? The answer is, I don't buy it at all. I would pay for it. I want to pay for it. I used to pay for it. But, I don't like my toys to be broken by greedy strangers... Ok, extremely wealthy and greedy strangers. So, now, I still get my music, and I don't pay. If the record companies still sold a product that wasn't broken, or a risk, I'd like to pay them, or better yet the artist, for the music. But they are not offering something I'm comfortable with, so they get none.
What I find quite interesting is that no one is bringing up the real news here, in that what this article is pointing out is that iTunes/Raps needs to have an option to only allow buying the entire album, and not just the individual song. The actual CD has nothing to do with it. The overall concept would be that on initial release, only the entire album can be bought for the first 5 weeks. After this, individual songs can be purchased.
Why dont they have this now??? It is because iTunes is about selling players, and not about revenue from downloading songs. The blame for this is directly on the recording studios for not making downloading of music more profitable for the internet providers....
I don't get it...
Reviews with a twist! http://www.sardonicbastard.com
Stick with me on this for a minute:
If my family wants to see Harry Potter [insert episode here] at the movie theater, we'll go see it so we can have a blast sitting in the dark listening to the overly-amped up sound and get a fun thrill from the big screen.
However, if the DVD were available at the same time, we'd still go to the theater to do the family thing, then buy the DVD if we liked it.
Means this: we go to the theaters to see the things in which we are interested - irrespective of DVD availability. We then wait with anticipation for the DVD for a release (and generally buy it on the day it is released) if we really liked the film. What I'm trying to say is, if we like it enough to patronize the film, we'll see it several times.
Enter the music industry: The industry is trying to figure out how to stay in business, and along the way, they're forgetting something critical: the fans. If the fans like it, the ones who pay for music will buy it (and some of us will buy the CD if we want to support the musician(s)). Those that don't buy music probably won't buy the downloads or the CDs.
Key point: If the artist makes the fans happy, they'll buy whatever makes the fan happy (CD or individual download). Preventing one of the means of purchasing is not helping the artist or the label. Truthfully, (this is a personal opinion, folks) if I really like a given artist, I'll buy the CD - even if there are some tunes to which I won't listen - so I can patronize the artist. If I like one tune of a given artist - but the artist doesn't generally float my boat, then I'll download the one tune and not buy the CD.
Cutting off means of distribution is not a smart business tactic.
A Passionate Independent Musician
Let's see, if I'm a record exec and I see a digital copy of a song sell 3 million copies, which cost me nothing to reproduce or distribute, why do I care about CDs at all? Selling 300K CDs is pretty good in a week, but the lable had to press and ship all those CDs. They sent one digital copy to iTunes and sold 3 million, and they are complaining? These folks are really working hard at being stupid.
Maybe they didn't consider the fact that maybe people liked one song/album better than the other?! Tomorrow in the news: Sales of online-ordered giant broccoli stumps plummeted today whilst store-bought beer flourished. Is this the end of online-ordering?!
Only if they drop a bunch of letters out of the book to make it take less space, then make you use one of those little red filters to read the paperback so that it would be difficult for you to go and photocopy it. ;)
Regardless of one's ability to draw meaningful conclusions from one datapoint, they also left out another key figure.
Ne-Yo's CD In My Own Words sold 301,000 copies using this method. Chris Brown's Run It, that was in the itunes store, sold 154,000 copies in its first week. Ne-Yo's So Sick was downloaded approximately 3.4 million times on the peer to peer networks during the week of his album release while the album Run It! was downloaded approximately 5.3 million times in the same release period.
OK, so how many downloads from "Run It" were sold in the ITunes store during that time period? If it was only about 50-100K songs, then they may have a point, but if it was something along the lines of 500K songs, then all they did was to give up some profits on CDs to make the same money on downloads. So, yeah, Duh, people are going to buy less CDs if they have the option to buy a CD or buy from iTunes than they will if they only have the choice to buy CDs.
It's like a deli that sells both ham and roast beef sandwiches complaining that they don't sell as many ham sandwiches as the deli down the street that only sells ham sandwiches. Big deal...
If I don't put anything here, will anyone recognize me anymore?
This attempt by the labels to push albums is nothing new. The last time we saw, which was only several years ago, was when they were trying to stop the sales of singles. The singles were cutting into sales of albums, and the theory was that if singles were not available, then the consumer would be more likely to buy an album.
I think the more likely aspect is the key. Wiithout singles, one might be more likley to record a song from the radio or just copy it from a freind. Even then there were albums that are so bad no one wanted anything but the same album. Not even the b-side was worht anything. With singles it was more likely all parties would be compensted for the product the consumer wants, and if we dig our heads of the artistic bigotry, when one is talking about selling a million albums, we are fundementally talking about providing a product that the student wants.
So, when singles were pulled, it was a statement that the labels would tolerate more copying in the hope they would end up with increased overall profits, even if the formula used to calculate royalties meant the perfomers and other parties recieved less. I wonder if this algebra will work out in the current climate of rampant unlicensed distribution of any hit track, not to mention much more sophiticated distribution channels for used albums. Frankly there have been way too many times lately when I have gone to iTunes hopeing to legally acquire a track, only to find it unavailable or only as an album. If it is an older album, I can get it used for much less than iTunes. If it is a new album, I soon will be able to get it used. Does this help the company bottom line?
Back to the original question. If the fast food joint only offered value meals, then a person with only a burger would cause a great deal of havok at the unfairness of the situation, disrupting bussiness. And such a person would have a point. The burger is seperate, you could sell it seperately, but you choose not to. It is simply not worth the effort, despite the clear benifits.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Seems to me the issue here is not about delaying the release of songs on itunes increasing cd sales but not releasing songs as singles increasing album sales. The fact that the song wasn't released on itunes etc was only due to the record company wanting to bundle the song with the rest of the album, because surprise, surprise they make more money.
It looks to me like the record companies took a page from Microsoft's book.
This post patent pending.
The answer: even though legal online music is DRMed, the labels and RIAA do not look kindly on iTunes or other online distrubution precisely because they would lose control of distrubution. They love control, they sleep with control, they make sweet anal love with control when things go their way, control is within and without them. They can't think of having it any other way. In fact, they have a very hard time thinking that technology hasn't progressed since the 50's.
With online distributors, they lose control--they rely on another company to distribute their product because they were to narrowminded to innovate the idea of legal online electronic dirstrobution in the first place, even though they had the best chance of anyone to successfully pull it off... The industry as a whole will never move to such a system. We'll see music on DRM'ed holographic data crystals before they'll sell all of their music online, providing the whole industry dosen't collapse first.
There seemed to be nothing in the article about selling physical singles. The choice is selling singles online, or promoting a single on the radio and only selling a full physical CD. Where's the middle ground? Record companies have been bitching about sales going down, but have made it harder to get the songs they promote. Hint - offering it in more formats (physical and digital) will increase sales.
creation science book
Keep it up RIAA. You're going to lose this one :)
When the DS was unavailable a couple years a go it sold like hotcakes, same with xbox360 this year. Special colors (my wife wants a Pink DS) are only released in small quantities and therefore are highly desired.
Making people listen to a song on the radio without making it available for purchase means that it will hit the charts hard when it does release. Is there anyone who could possibly be surprised by this?
Repeat after me... Correlation is NOT causation!
Thank you,
Bryan
There are usually only two or three songs that sell an album. Price of an album: $12-$18 Price of three iTunes: $2.97 If execs can force people to buy their three good songs for $12-$18, why would they want to break the album into pieces and only sell the good stuff at a much reduced profit?
I went to eat some animal crackers and the box said, "Do not eat if seal is broken." I opened the box and sure enough..
Let's take that arguement for a second. Ne-Yo now has around 3.7 million people with an interest in his music, while Chris Brown has around 5.4 million people interested in his music. Because artists don't make much money off cd sales, they make it on people showing up to concerts and other options they have. So who is in a more actionable position? And how much money does the artist get from an itunes album sale versus a physical sale?
I can see why the RIAA is getting upset though. The artists might actually make a buck and not need a monopoly pushing their product.
Gonzo Granzeau
"Nothing the god of biomechanics wouldn't let you into heaven for.." -Roy Batty
But if the industry determines that restricting digital sales pays off with bigger album sales, fans may soon find the instant gratification of snapping up new songs online becoming a little less instant.
Ummm bigger album sales? Digital or CD, the record companies are still selling the same damn thing. Thus it shouldn't make much of a difference if the music is sold online or otherwise.
However, if this becomes widely practiced then it begs the question of "why are cd sales preferred by the record companies?" the answer would lie in the gross profit margin. One would think that digital delivery would be cheaper as the distribution channels are "virtual" and that there are no materials involved. If cd's are preferred then cd's might have a higher margin than the downloads. Then it makes us wonder why cd's cost so much in the first place.
Hopefully this will provide more fodder for the case against the record companies and allegations of price fixing.
Can you imagine if this logic had been used 10 (or so) years ago.
Record Artist to record label: Oh and by the way I do not want my newest album on this new format... what is it called... VD?.... LSD.... oh yea... CD... what ever it is I do not want anything to hurt my album sales.
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iTunes is not the enemy. It is simply another delivery device to get your product to your customers. If someone buys a CD... you get money... if someone buys that same CD from iTunes.... guess what.... you get money. And sense there is no packaging, manufacturing, or shipping cost with iTunes you actually make more money. What do you care if we buy our music from Wal-mart or Best Buy or iTunes?
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I bet in a few weeks Island records will release a statement of retraction. Saying it was all a big misunderstanding and what they meant was unlicensed music download sites, and they would be proud and honored to have their music on iTunes.
Focusing on sales is misleading. How much money is really being made? CD sales are higher because of higher prices for CDs, but what about the costs of producing, shipping, storing, and selling them? How much is left as profit? It seems to me digital distribution would be more profitable, because of lower costs. The main problem with it is there are still more retail consumers than online ones.
CD First:
iTMS first:
Total, 421,000 copies for the CD first track. 454,000 copies for the iTMS first track. Yeah, the CD first album sold more copies, but that was at a reduced price of $7.98... cheaper than the 'album' is sold on iTMS. Wow, big surprise there... you lower the price of something and you sell more of it! That's news? No, that's not news... here's the big news:
Once again, a story on Slashdot is misleading and flame worthy. It's almost like they do it on purpose to sell more page views or something... Noooo, Slashdot is 'news for nerds' and would never treat its readership as if they were illiterate morons.
If one takes the difference in downloads (1.9 million) and divides it by a typical CD cost ($15), one gets ~127,000. That's almost enough to make up for the difference in actual CD sales (it leaves a delta of ~20K CDs), with no marginal cost of goods for the record labels to bear.
It all seems like a wash to me, and of course only has any hint of significance if the two albums/artists can be considered equally in demand, a tenuous assumption.
"National Security is the chief cause of national insecurity." - Celine's First Law
Another factor that is not mentioned in this set of statistics is how long before the song was released people started hearing it on the radio.
If the song is played for weeks on the radio before it is released then people are sick of it. This seems to happen with so many new singles these days, especially from the big names. They are hyped and hyped and played and played to death so much that no one wants them by the time they are released.