arstechnica.com— CD sales are down sharply while downloads aren't growing fast enough to make up for the decline in revenues. We look at the figures to determine what's going on.
Mar 22, 2007View in Crawl 4
Could it be that people are no longer interested in paying 14-20$ for 12 songs they don't want and 1 they do, and instead go online and buy the ONE song they actually want?OMG The nerve of these online shoppers, only paying for what they want. Hey! There's starving record exec's out there that aren't going to make their 4.5 million dollar mansion payment. How do you downloaders sleep at night?!
While CD sales are down, they are still selling millions of CDs for billions of dollars of profit. The labels are still cheating the artists and selling pieces of plastic for a huge profit. No record label has ever gone "into the red." Even with downloading, both legal and illegal, CDs are still selling handsomely. Justin Timberlake, (I know, bad example) had both the top selling CD and most illegally downloaded tracks. Huh? Now add digital singles, ie iTunes, and they have the potential to generate even more income from a new medium.The music "business" is just that, because they make more profit than they spend. GM and Ford LOST billions of dollars last year... and no one is downloading cars. Those companies are clearly in trouble. They need to take a page from the music business... while tons of people still download songs for free, the music business is still profiting nicely... and embracing new technologies.
To boil this down to it's bare essentials:80% of songs on albums are crap. And now the public has the choice not to buy it.Ergo: Music revenue is down.Welcome to Personal Freedom 101.
Good article by ArsTechnica to point of one of the key factors, but there several others. The ones that come to mind are:POOR OVERALL QUALITY OF MUSIC - This has always been a problem, particularly for major labels. It increases the value of singles.THE INTERNET (not P2P) - The internet has allowed indie labels far more access to customers than previously available, and since indie labels don't refuse to let people hear any of their music without paying (the way RIAA labels are), it exposes listeners to stuff they'd never hear on the radio. Indie labels aren't experiencing this same loss of sales as the RIAA labels...instead, they are GROWING.AVAILABILITY OF USED CDs - A few years ago, if I wanted a used copy of a moderately obscure CD, I'd have a near-zero chance of finding it. Now its easy to find from an Amazon reseller, half.com, and many others, and quite cheap. The only downside is shipping. But then, the last CD I bought cost $1.17 (plus $2.59 shipping).STOCK vs SALES - The RIAA counts a sale every time a CD makes it to a shelf. Better inventory systems result in less unsold stock, which appears (to the RIAA) to be lost sales.DISCOUNT STORES - When Wal-Mart forces a CD to sell for $10, labels are hard-pressed to make all that easy money they used to.THE DEATH OF RADIO - Clearchannel and others have turned radio into an advertisement-filled wasteland, and a set playlist devised by a bunch of suits in a meeting room to match the discounted, disposable music on Wal-Mart's shelves. The average listener is exposed to unoriginal music that has little long-term value.PIRACY - Maybe. Teenagers have always been a key market for popular music, and my observation of teenagers is that many (perhaps most) are more than happy to just get everything for free, and don't feel any obligation to pay for anything. Its also common for teenagers to have a hard time linking consequences to actions; they've been engaging in risky behavior for eons. This is why lawsuits don't work. The irony is that for adults, piracy is often a form of music exploration, and can lead to significantly more music sales...and its adults who have the disposable income to buy music. The net result of piracy could actually be positive for the labels, but they can't see it because they ignore everything else.THE RIAA & THEIR LABELS' BEHAVIOR - Labels seem to be completely unaware of the need to keep a brand respectable. When these labels get associated with rootkits, DRM, and lawsuits against children and dead people, it is nearly certain to affect their sales.And finally the big one:VALUE PROPOSITION - All of the above leads to one extremely important perception, and that is "what is music worth to you". If iTunes sells music for $1 per track, and there are often only a few good tracks, the value of a CD (to a customer) is nowhere near $16. If eMusic sells that same music with no DRM for 25 cents per track, iTunes music is a poor value. Even disregarding piracy, the value of music has decreased significantly.
how about we take it beyond the price on the label.Has anyone else noticed that their disposable income is rapidly shrinking? how about the fact that instead of $20 to fill my tank, it takes $35. how about the fact that my grocery bill has gone up at least %10 from this same time last year. How about the fact that my utillities instead of being $50 like last year, they're $85. Nothing in my life has changed, i still drive the same car, eat the same food (although i might use more bargain brands now then i did then), and i still have the same appliances.Not to be the big anti oil guy, but most of these things can be traced back to the cost of oil.Now less disposable income means that i'm trying to stretch my bucks as far as they'll go. this means i don't buy CD's at all. That means i don't go to the theater hardly at all to see the latest flop from hollywood. it means i don't go out buying big screen TV's and whatnot.That's the long and short of it, freemarket capitalism is on hard times right now, greed isn't as equal as it should be, and as a result things aren't working out like they should.
spankaccountMar 23, 2007
This Slashdot comment says it better than I could have...<a class="user" href="http://slashdot.org/comments.pl?sid=227725&cid=18448461">http://slashdot.org/comments.pl?sid=227725&cid=18448461</a>
wolfe1978Mar 23, 2007
Could it be that people are no longer interested in paying 14-20$ for 12 songs they don't want and 1 they do, and instead go online and buy the ONE song they actually want?OMG The nerve of these online shoppers, only paying for what they want. Hey! There's starving record exec's out there that aren't going to make their 4.5 million dollar mansion payment. How do you downloaders sleep at night?!
mscripMar 23, 2007
While CD sales are down, they are still selling millions of CDs for billions of dollars of profit. The labels are still cheating the artists and selling pieces of plastic for a huge profit. No record label has ever gone "into the red." Even with downloading, both legal and illegal, CDs are still selling handsomely. Justin Timberlake, (I know, bad example) had both the top selling CD and most illegally downloaded tracks. Huh? Now add digital singles, ie iTunes, and they have the potential to generate even more income from a new medium.The music "business" is just that, because they make more profit than they spend. GM and Ford LOST billions of dollars last year... and no one is downloading cars. Those companies are clearly in trouble. They need to take a page from the music business... while tons of people still download songs for free, the music business is still profiting nicely... and embracing new technologies.
srodolffMar 23, 2007
To boil this down to it's bare essentials:80% of songs on albums are crap. And now the public has the choice not to buy it.Ergo: Music revenue is down.Welcome to Personal Freedom 101.
bdbrMar 23, 2007
Good article by ArsTechnica to point of one of the key factors, but there several others. The ones that come to mind are:POOR OVERALL QUALITY OF MUSIC - This has always been a problem, particularly for major labels. It increases the value of singles.THE INTERNET (not P2P) - The internet has allowed indie labels far more access to customers than previously available, and since indie labels don't refuse to let people hear any of their music without paying (the way RIAA labels are), it exposes listeners to stuff they'd never hear on the radio. Indie labels aren't experiencing this same loss of sales as the RIAA labels...instead, they are GROWING.AVAILABILITY OF USED CDs - A few years ago, if I wanted a used copy of a moderately obscure CD, I'd have a near-zero chance of finding it. Now its easy to find from an Amazon reseller, half.com, and many others, and quite cheap. The only downside is shipping. But then, the last CD I bought cost $1.17 (plus $2.59 shipping).STOCK vs SALES - The RIAA counts a sale every time a CD makes it to a shelf. Better inventory systems result in less unsold stock, which appears (to the RIAA) to be lost sales.DISCOUNT STORES - When Wal-Mart forces a CD to sell for $10, labels are hard-pressed to make all that easy money they used to.THE DEATH OF RADIO - Clearchannel and others have turned radio into an advertisement-filled wasteland, and a set playlist devised by a bunch of suits in a meeting room to match the discounted, disposable music on Wal-Mart's shelves. The average listener is exposed to unoriginal music that has little long-term value.PIRACY - Maybe. Teenagers have always been a key market for popular music, and my observation of teenagers is that many (perhaps most) are more than happy to just get everything for free, and don't feel any obligation to pay for anything. Its also common for teenagers to have a hard time linking consequences to actions; they've been engaging in risky behavior for eons. This is why lawsuits don't work. The irony is that for adults, piracy is often a form of music exploration, and can lead to significantly more music sales...and its adults who have the disposable income to buy music. The net result of piracy could actually be positive for the labels, but they can't see it because they ignore everything else.THE RIAA & THEIR LABELS' BEHAVIOR - Labels seem to be completely unaware of the need to keep a brand respectable. When these labels get associated with rootkits, DRM, and lawsuits against children and dead people, it is nearly certain to affect their sales.And finally the big one:VALUE PROPOSITION - All of the above leads to one extremely important perception, and that is "what is music worth to you". If iTunes sells music for $1 per track, and there are often only a few good tracks, the value of a CD (to a customer) is nowhere near $16. If eMusic sells that same music with no DRM for 25 cents per track, iTunes music is a poor value. Even disregarding piracy, the value of music has decreased significantly.
catfudMar 23, 2007
if you love Dream Theatercheck out Pain of Salvation they are the best prog metal band I have ever heard
matthewsr2000Mar 23, 2007
how about we take it beyond the price on the label.Has anyone else noticed that their disposable income is rapidly shrinking? how about the fact that instead of $20 to fill my tank, it takes $35. how about the fact that my grocery bill has gone up at least %10 from this same time last year. How about the fact that my utillities instead of being $50 like last year, they're $85. Nothing in my life has changed, i still drive the same car, eat the same food (although i might use more bargain brands now then i did then), and i still have the same appliances.Not to be the big anti oil guy, but most of these things can be traced back to the cost of oil.Now less disposable income means that i'm trying to stretch my bucks as far as they'll go. this means i don't buy CD's at all. That means i don't go to the theater hardly at all to see the latest flop from hollywood. it means i don't go out buying big screen TV's and whatnot.That's the long and short of it, freemarket capitalism is on hard times right now, greed isn't as equal as it should be, and as a result things aren't working out like they should.