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At Atlantic Records, Digital Sales Surpass CDs
The NYTimes reports that Atlantic is the first major label to report getting a majority of its revenue from digital sales, not CDs. Analysts say that Atlantic is out in front — the industry as a whole isn't expected to hit the 50% mark until 2011. By 2013, music industry revenues will be 37% down from their 1999 levels (when Napster arrived on the scene), according to Forrester. "'It's not at all clear that digital economics can make up for the drop in physical,' said John Rose, a former executive at EMI ... Instead, the music industry is now hoping to find growth from a variety of other revenue streams it has not always had access to, like concert ticket sales and merchandise from artist tours. ... In virtually all... corners of the media world, executives are fighting to hold onto as much of their old business as possible while transitioning to digital — a difficult process that NBC Universal's chief executive ... has described as 'trading analog dollars for digital pennies.'"
Cry me a farking river! If these industry assholes would have got on the bus in 97, they may have a viable option now.
They're so narrow-minded that they can look through a keyhole with both eyes at the same time.
The industry should have been the first out the gate with mp3's, giving the customers what they wanted and not what the record industry wanted to sell them.
It's almost poetic justice, the record companies have screwed the artists for years and now they seem to be getting their comeuppance.
I care for these assholes about the same that I care for that dinosaur car industry. Change or die!
I'm not anti-social, I'm anti-idiot.
Ummm... how are we thinking that CDs aren't digital?
How about just releasing everything world-wide, at the same time, instead of a handful of countries, or different dates for only a selected few countries? I don't care about your contracts and agreements, you're the ones who did that in the first place. It's your mess, clean it up. Your market is the whole planet, take advantage of this "new" fact.
And that goes not only for music but for movies and TV shows too.
I haven't seen a single new piece of vinyl (or CD, for that matter) listed on dancerecords.com since July.
This happened very suddenly, and it's a bit startling for those of us who have invested in actual vinyl turntables...
CAn'T CompreHend SARcaSm?
There is an interesting paragraph in the article....
To paraphrase - we think the artists owe us more money
"It's not at all clear that digital economics can make up for the drop in physical."
Well, no shit. Their old business model of selling a $15 CD with 1 good song---aka ripping people off--doesn't fly anymore. If you just want that one song, you just buy that one song.
Digital sales aren't going to match physical sales because--plain and simple--there's a lot of complete crap out there that people don't have to buy, anymore.
It's strange that nobody ever talks about Amazon. You can buy MP3's on Amazon for 89-99 cents per track, complete albums typically for about $8. I ripped all my CDs to mp3 this year, tossed the CDs in a dumpster, and am now buying music only on Amazon. I love not having piles of CDs lying around and making my house messy. Amazon sells music with no DRM. It works on any OS that can run a web browser.
iTunes, on the other hand ... yeesh. It's a completely proprietary system, and it doesn't run on my OS. It's also got DRM (although the DRM is fairly easy to circumvent).
Find free books.
It isn't right to steal, it's true. However, our rights to the public commons have been stolen by Disney and Congress. Irving Berlin's estate still gets royalties for Blue Skies, for crissakes. Therefore, perhaps a bit of civil disobedience is in order. It depends on your calculations.
I simply don't like the music produced right now, and I don't think I'm alone. In the 60's through the 90's, the defining part of each piece of music was typically the melody. We listened to things that had beautiful sounds and chords. We had thought provoking lyrics that read like poetry, or lyrics that one could simply associate with.
Now music is so hip-hop/rap influenced that the only thing the composers seem to think about is the beat and the star-power behind each act. This commercialization + beat + weak melody is just not working a vast minority, if not a majority of music listeners. A song today probably only has a single catchy part that lasts a few seconds, and the rest is trash. We are expected to buy this music so we can hear the 5 seconds we like of a 3:30 min song. What about the song as a complete work of art?
This problem has always existed, but before it typically showed up as filler in an album. Now the album has been scaled down to fit inside of one song, and it's just not a compelling experience.
Really young people are going to like whatever is produced because they don't know anything better- that is certainly a big market. However, the music industry has almost completely lost the 18+ crowd by trying to cater to people who have relatively unestablished tastes. They got away from the fundamentals and they're getting severely burned. If they produced good work and were losing money to piracy, I would feel sympathy for the artists and even a little for the labels who do the sound engineering. Since their work is crap, though, I'm not spending a cent on any music they produce.
Ethics in this situation are pretty subjective to which part of the issue you're seeing. However, I'd have to say that, no, people would not stop making things altogether. You'd have people producing as a hobby. You'd have new business models. Look at open source. Sure, it's software, rather than "art", but if you compare it as a business opportunity, it becomes obvious that there are viable business models out there that aren't destroyed by "piracy". And, I think that "funded from governments" would be more likely to stifle creative expression than influence it. However, going back to foundations and benefactors - that has potential.
Please, PLEASE stop calling copyright infringement "piracy". Piracy happens on the high seas, generally, lately, near Somalia. And it can be deadly, as the pirates who tried to attack the Indian Navy vessel learned last week.
Copyright infringement is not even stealing; it's copying. Stealing (legal definition) involves depriving the owner of their property, but copying does not do that; rather, it enriches both parties.
In addition, corporations have stolen from the public domain that was granted access to all works after a short period of time, as defined by the US Constitution. So, these corporations have reneged on their social contract, and therefore do not deserve to have their copyrights respected (note that this last part has not been confirmed by the courts, but it should, soon; Google "Lessig Eldred").
And I agree: rampant copying does help society, because it helps us ensure that we bring forward our culture, rather than letting it rot, forgotten, in unmarketable silos.
I feel fantastic, and I'm still alive.
Atlantic Records is one of the most common plaintiffs in the RIAA cases. (Here are some in which it is the first named plaintiff: Atlantic v. Andersen(Portland, OR) Atlantic v. Anderson (Houston, TX) Atlantic v. Boggs (Corpus Christi, Texas) Atlantic v. Boyer (Tampa, FL) Atlantic v. Brennan (New Haven, CT) Atlantic v. Dangler (Rochester, NY) Atlantic v. DeMassi (Houston, TX) Atlantic v. Does 1-14 (Portland, ME) Atlantic v. Does 1-25(New York, NY) Atlantic v. Howell (Phoenix, AZ)(pro se) Atlantic v. Huggins(Brooklyn, NY) Atlantic v. Lenentine (Portland, ME) Atlantic v. Myers (Jackson, MS) Atlantic v. Njuguna (Charleston, SC) Atlantic v. Raleigh (Missouri) Atlantic v. Serrano (San Diego, CA) Atlantic v. Shutovsky (New York, NY) Atlantic v. Zuleta (Atlanta, GA)...) As far as I'm concerned they should rot in hell.
Ray Beckerman +5 Insightful
A fair deal that we've had since time dancing around a campfire was a political gesture is that songs and stories and legends and art become apart of the commons after a period of time. We've made a deal with the artists and their representatives that they can have exclusive use of their works for a limited time in order to encourage them to make more. That's "the deal".
With their exploitive contracts, exclusive play deals, abusive lawsuits and lobbying to get the "limited time" extended to "essentially forever", they undermine every possible benefit in an attempt to "improve their deal". They just don't get - and they won't ever get - that the deal they're breaking is the one that allows them to profit at all.
A growing share of people consider the deal broken and its terms no longer binding and they are enforcing their view of things by technical force. This may not yet be legal, but it certainly is ethical and eventually the law tends to come around to the common point of view. At first there were only a few remix geeks and DJ's. Now the amount of storage media sold in a day outstrips a year's published sales of content. I suppose it's the vast majority of people now and demographically more often the young. The young are responsible for the most enduring social changes so this change looks fairly permanent. As the years go on peer pressure will kill the rest of their market - "Kalen bought encrypted music again? He didn't learn the last six times! (tee hee)."
Copyright as applies to media content is a dead letter. It should be abolished. Maybe after a generation it can be started again with strict limits to ensure it doesn't follow the same hateful course.
Help stamp out iliturcy.
That message was sent 25 years ago. It was delivered on a cassette tape.
2000 called. They want their Florida ballots back.
My first Journal Entry ever, in 8 years! http://slashdot.org/journal/365947/aphelion-scifi-fantasy-horror-poetry-webzine
âoeThe real question,â Mr. Rose said, âoeis how does the record industry change its rights structure so it captures a fairer percent of the value it creates in funding, marketing and managing the launch of artists?â
Arguably, when the record industry lost their stranglehold on the various ways that the public could be introduced to new acts, their marketing and launch management value creation was significantly reduced. Furthermore, competing in the much larger pool of availble unlimited digital stock, one would naturally expect prices to compete downward.
Also, the number of ways in which the record industry payout structure has been unfairly skewed towards the record labels is well documented. One would expect this to gradually tip downwards back to a more reasonable medium.
In the grand scheme of things, a decent recording can be made at a 10,000 dollar studio, pressed at one of any number of professional CD producers, and distributed by any number of available distributers. Add in a 1,000 dollar HD video camera for youtube promotion, and you have a comparable music system powered by the creator's time. That's a highly efficient alternative that didn't exist ten years ago.
Assuming our cultural music needs are being met, a 25% drop in overall spending on music could easily be because we have become 25% more efficient.
The ______ Agenda
The problem with the music business is the attempt to use money as the promotion medium. Yes it works. But it does not cater to individual tastes.
There's a number of ways industry promotes itself. Commercial radio, newspapers, On-line - iTunes 'New Featured' albums, etc. There's magazines for Rock, Metal, etc that promote artists and include CDs of sample music - I have to think the labels push artists with $$$$$.
I love music. I've a fine collection, IMO, of Rock, Country, Blues, Jazz and all kinds of other music. I almost always have music playing. The problem is, with my varying tastes its hard for me to find new artists I want to listen to. Without relying on Hit songs being the only measure of whats good (I do a select few of the current hit songs).
My favorite albums though are from artits who don't get a lot of heavy promotion. Sad because the albums are playable tracks 01 to 12 or 15. And there's a quality and consistency to all the tracks. Sad to because they are signed on major labels and there's no backup - and if the album gets a 'bad' review from the press the label doesn't stand behind the artist. I almost feel like its done on purpose so they can focus on the 1 artist that will make them $200 million.
I think the only option is for the labels to collaboratively build a Last.fm site. The 'community' has been building the site/database (I don't know all the ins and outs) for a few years. If the labels really want to keep fans interested, make sure they know about *all* your artists. Otherwise, why blow $200,000 on a new record and hope that it does well w/o any promotion.
'Cause at this point I don't mind buying retail. I love it since I get the pressed CD. Just help guide my way to the register.
With on-line I only wish the catalogs would expand so consumers can buy songs from 20 years ago even on not-so-well selling albums. You can't find them anywhere. And if you can the copy is $500. iTunes still has some major holes in its collection. I'm not talking about bands that sold 10,000 copies either.
Piracy has referred to plagiarism for centuries. 'Meaning "one who takes another's work without permission" first recorded 1701;' Get with the times.
God, 9 years on and the record companies *still* don't have anything that's even close to Napster for ease of use and sheer range of music. My CD purchases probably have dropped off, but that's because for all that time I've been waiting for them to finally release a music download service that actually compares to the stuff I've already used.
What they perhaps don't realise is that myself and many others would gladly pay for the music we listen to, but I'm not going to be tied down to listening to it x number of times, or on x devices, or with it limited to x copies. I also don't want limits on what I can and can't listen to. If I'm going to sign up for a paid service, I want to be confident that I can download pretty much whatever I want.
Napster had all of that, and pretty much a monopoly on the download market. Makes you wonder what might have happened if the record companies had worked out a way of licensing tracks shared through it, instead of driving sharing underground.
Speaking of revenue, the statement "By 2013, music industry revenues
will be 37% down from their 1999 levels" means jack shit because it says nothing about profit. Of course revenue will drop significantly if you don't have to make, package, distribute and find retail shelf space for millions of individual physical items around the globe.
Personal anecdote of physical vs electronic: During the 90's I was the technical lead on a large project with 8000 remote mobile users, and when I say remote I mean Australia wide coverage - GSM, DATATAC, sattelite phones, radio link exchanges, and the like. To upgrade the software for all 8000 users by CD was costing ~$2M/yr (mainly in down time for the user to get the CD and install the upgrade). It took 4 programmers including myself ten minutes of thought and 6 months of work to build an automated upgrade system that did not require any action by (or delay to) the user.
The board of directors were so impressed with the $$$ signs that they wrote a long and flattering letter of appreciation to each of us, but they were a telco at the "bleeding edge", I imagine a record label would have taken us to the basement car park and shot us.
And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
This is as it should be. Publishers and producers - middlemen all - never had any socially ethical right to all those "analog dollars" in the first place. The prospect that they might have to make do with "digital pennies" like the rest of us is a slight reversal of all that sickening concentration of wealth.
Since expenses regarding the production, burning/printing, shipping, distribution and selling of physical CDs disappear when you're selling music as mp3 on the internet, I suppose that net income increase every day for the musicbusiness. (Or what are they doing wrong?)
Who cares if revenues go down if profits or net income increases? Except of course for the CD manufacturers, truckdrivers and expedients in the shops.
Why would the record companies care about what format they sell to the consumer anyway? If anything they should be making up for any minor drop in sales by vastly reduced infrastructure costs.
I think there is a bigger worry here though. If Joe T. Plumber loves music from the 70's, and bought a particular track first on vinyl, then cassette, then CD, and now mp3, how the hell are they going to sell the same track to him again? Non-DRM digital files represent the end of a very lucrative sales cycle. A format shift is a format shift, but this concept must scare the living shit out of them. About the only way they can resell that track to him is if he somehow loses it, and whatever reseller he bought it from doesn't do replacements. IOW, digital files don't wear out, and can't really be obsoleted.
If you consider the track to be the basic atomic unit of music rather than the album, I wonder how sales per unit have done historically if you exclude double and triple and quadruple buys for format shifts, lost/broken media, hardware obsolescence, compilations sales, etc. My guess is probably that sort of thing made up more of their bread-n-butter than the marketing execs would care to admit.
My guess is they knew this since '97, hell maybe even since '47, and that's why they've had to be dragged kicking and screaming into the mp3 age.
Finally, a record company that gets it! How long has mp3s been out for now???
CDs are now an archaic outdated media. There is absolutely no reason to carry them around when you can carry the same songs and artwork from hundreds of CDs in one tiny widget that fits in the palm of your hand. There is no reason why anyone should have to get in their car and drive all the way to the CD store just to look at a smaller selection of music then what they can listen to instantly and effortlessly over the internet. Digital distribution is so much more efficient, and environmentally friendly then shipping plastic coasters to every corner of the world. Need I go on?
Now that the cost of production and distribution is basically zero, the price of the music should change to mirror this. There is no longer any work (just contracts and payoffs) being done by labels. There is no reason for a band with decent talent to depend on them any more. If you can afford a guitar and drums, save up some more pennies and get yourself a microphone. Do your own recording. Put it on bittorrent. Ask your fans to see your preformances and buy/donate - but don't force them and don't blame them for anything. They may have something more important to put their money towards, like paying bills, charity, or even buying their own guitar or mic. Artwork shouldn't be made for money anyway.
I, like many of my peers, prefer my music on good old fashioned analog CDs.
The technology for "cloud" media distribution was developed and bug-fixed by the likes of Napster, not them. the whole MP3 infrastructure seems to have been put together by independent companies, research institutions and computer companies, with a notable absence of any record companies being obviously involved. Online music stores seem to be mostly developed by external companies. I'm not aware of any record companies behind the growth of the ringtone market. If you want to access databases of what's on your CDs, you don't go to the record company, you go to a database run by an independent company where the information is entered and corrected and maintained by volunteer end-users. Hell, Microsoft probably run a more reliable public back-catalogue for BMG than BMG do.
When's the last time that any of us visited a record company website to find out a major artists back-catalogue? These guys are no good at websites. They'll pay someone big money to do a glitzy "promo" site that doesn't contain any useful reference information, and pull the plug on it a couple of years later.
The big record companies say that they need to make big profits in order to find and invest in the next generation of talent, but the artists being found and nurtured by "the industry" seem to be supported by other industry "players". The big development recently has been TV talent shows, where there's a lot of money being made from tv broadcasting and pay-per-vote ... but the big record companies missed out on that money because it wasn't them that did it.
What they are trying to do now, is to have contracts that give them a slice of things like tour money. They're trying to grab someone else's historic market share to supplement their income, by awarding themselves those rights in the recording contract. Again, this is a market where the big record companies haven't invested in the past - the gigging circuit has been kept alive by bands and promoters who recognised that gigging was essential to keep part of the customer-base interested in music. The big record companies essentially left big live venues to die, leaving it to others, like the mobile phone companies, to sponsor them.
So if they're asking for a "fair slice" of the profits from music, they should be careful what they ask for. A lot of people think that their current profits represent way more than a fair slice.
Eric Baird
A lot of outsiders don't realise this, but the dreaded "standard contract" tended to have a clause saying that when a new format was launched, the artist wouldn't get any royalties for any works released on that format for a certain number of years. The justification behind the clause was that if a new format was launched, there would be a certain degree of additional investment required by the record companies, but no additional work by the artist - so the artist's "contribution" to the new format launch was to forego royalties for a while. For for the first couple of years of a new format's life, output in that format would be regarded as something akin to royalty-free "promotional" product.
You saw a similar clause operating in the film industry, and this was part of the reason for the recent Writers Strike. The writers realised that the movie industry was gearing up for a possible surge in sales from Blu-Ray, as people bought duplicate copies of their favourite movies in the new format, but thanks to their contracts, the writers would get zero royalties for the period of that expected initial surge.
The "suspension of royalties" clause is supposed to help distrbution companies embrace new formats, but in the case of the record industry and MP3 it did the opposite. See, the record industry realised that the MP3 market was emerging and growing and developing on its own while they did absolutely nothing. If they got in early, then the golden "no royalties" period would start while online sales were still low. In order to maximise the proportion of sales income that went to the record companies (rather than to the artists), the trick was to wait until the formats were already starting to take off, and then start the clock, so that as much as possible of the initial surge in sales would coincide with the "golden" period in which they could keep all the income for themselves and not pay the artists anything.
So there was an argument, from the record companies' point of view, for sitting on their arses and doing nothing whle the "piracy" sector grew the MP3 market to the point where it became attractive for the record companies to step in and take over. The artists would get screwed twice - once by losing income from piracy as the record companies initially refused to release tracks in the new format, stopping people who wanted to buy the tracks online from having a legitimate way to get them, and again, while the record companies jumped into the developed MP3 market, but kept all the cash themselves. This'd give the record companies maximum return on minimum investment and minimum risk.
Where the strategy failed was that if you sit back and let other people develop a market for you, when you then decide to enter that market yourself, you find that you don't have the in-house skills or expertise or experience or presence. The smart guys who now really know the new market inside-out don't work for you, and may not want to work for you. They either want to start their own companies, or work for a business that has already shown itself to be a leader in the new format. It's more difficult to assert ownership of a developed market sector if that sector has been entirely built by other people.
The "golden period" argument obviously isn't the only reason why most record companies didn't embrace MP3 early on - but in an accounting-heavy industry where "new media" expertise was low, and it was important for individuals to avoid being associated with costly project failures, the "golden period" accounting argument was probably a useful argument for executives to do what they were already inclined to do ... nothing.
Eric Baird
Strangely enough...their music has lived past them as a group, and finds new fans each year.
Amazing what actual talent will do for you...
Light travels faster than sound. This is why some people appear bright until you hear them speak.........