Another Year, Another Pile of Misleading Statistics From the Recording Industry
Written by Ernesto on January 26, 2008The IFPI recently published their latest digital music report. Amongst their claims “illegal downloading” outperforms legal downloading by a ratio of 20:1, and that because of this, the recording industry has lost US$3.7 billion. Picking apart these ideas reveal that they may be very misleading.
The very idea that music sales are declining seems to leave record companies scratching their heads. They can’t understand why people who once paid $20 for an album are no longer willing. The industry seems to think that music should be valued similar to movies. Is an album, which costs little to produce, really worth the same as a movie, which costs a fortune, often 200x more, to produce? DVDs and music CDs are often very similarly priced.
The press releases put out by the recording industry focus solely on piracy for declining sales, while in reality there are so many reasons. Most have been covered so many times by the media and academics, but we’ll re-iterate a few here.
The Decline in Music Sales
The CD format has now been around for over 25 years. Back-catalogues have been re-released on the medium and consumers lapped it up, replacing their analogue copies of music they own. However, there’s only so many back-catalogues to buy, leaving consumers either only purchasing new music or none at all. A decline in CD sales is an indication of saturation in a market where innovation is lacking. There’s also only so many “best of’s”, “greatest hits” and other compilation albums consumers are going to buy before thinking “I already own three copies of most of these songs, why would I buy another one?”
Format-shifting, the art of moving from one medium to another is on the rise. In the past consumers have moved their collection of music to different formats, usually because of quality improvements and convenience, and paid for the privilege. Now it seems consumers don’t think they should have pay to move their collection of music to their computers and media players, and especially not pay to receive an inferior quality copy of something they already own. It just doesn’t make sense. “Illegally downloading” seems logical. Digital copies of music, which were until recently usually DRM crippled, and are still poor quality in relation to CDs, are simply unattractive.
The thought also never seems to occur to the music industry that perhaps Avril Lavigne, Utada Hikaru, Rihanna, T-Pain and Akon (the artists behind the top 5 digital downloads in 2007) are simply unattractive to the public. How much manufactured pop can society take?
The Problems With P2P Statistics
There is no doubt that piracy is on the rise. This in in part due to the aforementioned, overpriced, inferior or non-existing alternatives. This aside, it is absolutely ridiculous to compare downloads with actual sales. Let’s sum up a few of the reasons.
Firstly, just because someone chooses to download music via P2P doesn’t mean they’re doing it illegally. The recording industry has stated numerous times that it will not sue people for format-shifting, whereby consumers would want a digital copy of music they physically own. Why go to the hassle of copying a CD you own to your PC/media player, when someone else out there has done it for you? There’s a lot to consider when digitizing music from CD, though the one-click approaches of programs like iTunes would let you believe otherwise. Indeed their exists numerous guides on how to best digitize music you own, most notably jiGGafellz’ guide.
Secondly, do these numbers include the antics of MediaDefender? They flood P2P networks with fake files, which unsuspecting users will often download. How many fake files does someone download before managing to get a genuine copy? Even when they have a real copy, how many times before they get one in a high enough quality to suit them?
Thirdly, what about those who download with the sole intention of improving their share ratio on private sites? Sites like OiNK were notorious for users downloading popular releases with no intention of listening to them, just to try and better their ratio. Similarly, users often download entire albums just to listen to one track. While BitTorrent clients have the ability to do selective downloading, broadband connections are becoming so fast that users don’t feel the need to. Other P2P networks where albums might be shared in archives such as .zip, .rar or .tar remove the ability to selective download.
Fourthly, a great deal of people seem obsessed with discographies. They would download an artist’s entire back catalogue of music just because they like collecting, often without listening to it.
A New Business Model?
The million dollar question of course is, what should the recording industry do? We know that there is no straightforward answer to this question, but we speculated about some of the options before. The Internet has changed the way people interact with music. Sites like OiNK made is easy to find and share virtually every piece of music ever produced. Services like last.fm on their turn made it easy to discover new artists, and interact with other fans.
The Internet and filesharing technologies make it possible to make production (of the copies) and distribution costs disappear, yet the prices still don’t change. Why? Because they cling onto their old business models.
Today, the average consumer buys approximately 3/5 CDs a year. Let’s say the labels make $25 a year per consumer. Now, what if the record labels decided to make their entire collection available online, and charge people $2.50 a month for a subscription. This way they could easily double their revenue. New business models will emerge, and I’m pretty sure piracy will pretty much cease to exist. The record industry can even outsource the distribution to online music services, who can even offer the music for free if they come up with other revenue streams to compensate the $2.50 a month per user. I’m just thinking out loud here, but there are tons of possibilities.
So, stop complaining about biased statistics, go back to work and do what you’re supposed to… distribute music to the fans!
Previously: Torrent’Em, a Flashy BitTorrent Search Engine
Next: Scientology Hackers Ask Pirates To Join Their War
60 Responses
Pages: « 1 [2] 3 » Show All
Thanks for this! Awesome torrent!
I recommened this if you guys wanna play online ;).
————————–
**CALL OF DUTY 4 CRACKED SERVER LIST*
UPDATE: OVER 300 NEW SERVERS ADDED!
http://www.cod4-servers.moo.no :)
o
Ernesto wrote: “Now, what if the record labels decided to make their entire collection available online, and charge people $2.50 a month for a subscription. This way they could easily double their revenue. New business models will emerge, and I’m pretty sure piracy will pretty much cease to exist.”
Piracy will never go away.
Here’s what happens if they charge a 2.50/mo fee. Three people go to the site and pay their money. One of the three releases his download to the masses a la torrent, soulseek etc. And people like me will be there. And so it goes. The huge paradigm shift that has to happen is that artists and musicians have to leave the big label system as it is the problem here, not filesharers. Artists have to learn to produce and record themselves. This provides the artist ALL the leverage they would ever need for the entirety of their careers.
But being lazy and allowing/requiring the labels to do all your work for you, well that’ll be just stupid. They couldn’t find their weenises in the bath.
Anyone considered the fact that if the music labels die, the amount of music available to the general population will decrease? (i.e sony music dies, less music distributed, at least from lesser known artists)
go back to work and do what you’re supposed to… distribute music to the fans!
And gather voluntary payments from the fans via Karmafan.com!
I agree with #23. They think that if someone couldnt download music he would buy all the albums that he downloads now. For God’s shake! Maybe they lost 0.5 billion or less, big deal…
1) the money they “lost” was spent for something else than thin air on solid-oil (aka cd/dvd)…
2) why didn’t the industry DIE, just DIE, the record/movie industry is useless and makes mostly 99.99% shit, don’t give anything to these worst-than-nazi scumbags that would love to send us to death camps if they could
Don’t forget many people have different taste so when people say crap, it can be relative or the opinion of the that particular genre group (latter being more important). Personally don’t like most rap, but I respect old school because it had a message. Today’s rap blows.
Wow. How insightful. A subscription model. Rick Rubin’s idea from 2 years ago. Except he’s actually doing the work to try to make it happen. And… you say it will make piracy virtually cease? Ridiculous. You biggest idea is borrowed from Rubin, your only original thought is embarassingly naive. No doubt about it… you gotta get another hat.
If the RIAA doesn’t learn there lesson, I’m never going to buy there CD’s :\ But I get all of my music of the internet all the time! When I like an artist, I go buy his CD and support him/her :)
In fact I WILL distribute music to the fans. check it out!
http://www.last.fm/music/Skankin%27+With+Steve%21
http://www.last.fm/music/And+I+Quote
Last.FM it is!
So someone tell me how I could possibly make a living off of music in this day and age? It’s great that the common-guy is speculating and there are people blogging about this, but the industry is in ruins and I can’t see a way I could make some scratch in the music industry. Studios are shutting down all around me.
DO NOT compare Utada Hikaru to “artists” like Avril, Rihanna or T-Pain. She’s much more than them will ever be. She is an amazing singer, composer and the best singer Japan has ever seen. Utada Hikaru is NOT “manufactured pop”! If you don’t know who she is, then DON’T talk about her.
To those who say a subscription based model won’t work because there will always be pirate material out there are as ignorant as the RIAA/MPAA themselves. It already does work in the form of Usenet/Rapidshare/etc… People have no problem paying in mass, many up to $25 a month, for these services just so they can download illegal material faster and safer. I for one would have no problem paying for a service that was well put together and offered me what I truly want, a huge collection of music in lossless quality without DRM. As to now this only exists in the pirate realm. Set up a nice looking site with a huge collection that offers that and I will without a doubt pay for it.
There is no honor in doing something illegal unless your trying to show these governments/companies that there current model is garbage. Once they wake up and change it to say the service mentioned for $5-$10 a month, I see no point in jumping through hoops.
ROCK STILL RULES!!!
Hopefully someone will have the b@lls to copyright the message of the lyrics in general. This would stop the infinite repeats of unintelligent songs.
People pay for quality. That goes for music/lyrics/talent not just the encode. Similar to why companies are willing to shell out the cash to buy a German-made machine and not get a cheaper but inferior American/Chinese one.
We don’t pay for crap, only governments do that.
Well, we might not pay for so-so quality DLs but its not nice to flame the guys who share what they’ve got for free.
Also–there’s a new Elvis Costello reissue on the horizon. Don’t know if it’s a one off for that album or a whole new catalog, but does that make it four times the EC catalog has been released in twenty years? The constant rerelease with a couple added tracks makes me constantly feel ripped off.
You forgot to mention that just because someone will download something for free doesn’t mean they’d pay for it. My music collection would have costed me well over $10,000 if purchased legally, LOL, like I can afford that. They may not have made money off of me taking things for free, but they certainly didn’t lose money on what I wasn’t going to buy anyway.
I used to actually buy CD’s to “contribute” to artists that I like. Not anymore. The music industry can thank the RIAA for that. And there have been times that I did want to buy albums but I specifically withheld from that because of RIAA faggotry.
[quote comment="272816"]DO NOT compare Utada Hikaru to “artists” like Avril, Rihanna or T-Pain. She’s much more than them will ever be. She is an amazing singer, composer and the best singer Japan has ever seen. Utada Hikaru is NOT “manufactured pop”! If you don’t know who she is, then DON’T talk about her.[/quote]
She was compared to the other artists as they were the top 5 downloaded artists in 2007. Stop acting like such a fanboy, too.
The thought also never seems to occur to the music industry that perhaps Avril Lavigne, Utada Hikaru, Rihanna, T-Pain and Akon (the artists behind the top 5 digital downloads in 2007) are simply unattractive to the public. How much manufactured pop can society take?
This is a subjective argument, your personal opinion about manufactured pop does not have anything to do with declining record sales. An editorial like this needs to be backed up with cold hard facts, and this one clearly has very little.
“Sites like OiNK made is easy to find and share virtually every piece of music ever produced.”
This is partly untrue. While pretty much all of the more mainstream stuff is indeed very easy to find, underground music is much harder to find on such sites, in some cases even impossible.
[quote comment="272964"]“Sites like OiNK made is easy to find and share virtually every piece of music ever produced.”
This is partly untrue. While pretty much all of the more mainstream stuff is indeed very easy to find, underground music is much harder to find on such sites, in some cases even impossible.[/quote]
There is no way you have personal experience with Oink; you obviously haven’t even read more than two dozen words on it either; go check out former members posts regarding it (including Trent Reznor of Nine Inch Nails).
It was the single largest collection of perfect quality music on the planet; more so than the net sum of all other music torrent sites (indie and pirate) put together.
You may be referring to public tracker sites such as Piratebay and Mininova, where it IS really hard to find rare or even semi-rare material…
[quote comment="272907"]
…
I used to actually buy CD’s to “contribute” to artists that I like. Not anymore. The music industry can thank the RIAA for that. And there have been times that I did want to buy albums but I specifically withheld from that because of RIAA faggotry.[/quote]
I fully sympathize; if I really like an album, I will buy it, but even so I’m aware that only the minority of my support is going toward the people whom I want to support, while the majority of my money goes to those whom I (philosophically at least!) oppose;
kind of like paying off Satan.
[quote comment="272388"]Comparing music on cd’s to movies on dvd’s is quite an unfair comparison in revenue production costs[/quote]
I see what some of you are getting at by saying this, but it is fair, when considered on a consumer level. We, as consumers, don’t think of production costs, or profits from rental and television deals. We look at how much it costs when sitting in front of us. When a CD costs just as much, and in some cases more, than a movie on DVD, it is easy to see why many consumers buy the DVD over the CD.
The DVD is cheaper than going out to the movies for most. When chain in a box stores sell them at lossleader prices, paying under $20 for a movie to watch on your giant home theater system is a better deal than going out to a movie theater, or buying that CD one may have wanted.
Heck, another great example, is look at concert DVDs. Some bands come out with the DVD and CD version separately. Most often the CD version costs more than the DVD version. That just makes no sense at all.
The recording industry has been facing their first real competiton over the past decade, yet they are too blind to realize that they are not putting out a product that can keep up with the competition. They then turn the blame towards P2P, because it’s an easy scapegoat for their own short-sightedness.
They have to compete with DVD and video games. Video games cost so much these days, but yet somehow still sell. The video game industry depends on the same consumer demographic. Most of these consumers would rather play their games, and with the high cost of games, it leaves them with little money to buy music.
Competition has more to do with the decline in CD sales, as well as the aformentioned fact that most have finished updating their back catalog of music. Hence, lower sales. It’s time the industry stop blaming their fans, and look for a way to win the real battle. The one against DVDs and video games.
[quote comment="272554"]Fith: We are boycotting and we will continue to boycott until all these parasites are deads.[/quote]
Agreed.. I’m continuing the boycott until they’re gone.
Keep spreading the word folks, Boycott these mongrels until they’re working at your Burgerking driver through.
Arrogant bastards like this deserve nothing less.
You downloaders just don’t want to see the truth, simply because you are greedy enough to want it for free.
All your ignorant ideas about the music industry is clearly based on what you want to believe. Not on actual facts.
umm, good article, but you messed up with this paragraph:
Format-shifting, the art of moving from one medium to another is on the rise. In the past consumers have moved their collection of music to different formats, usually because of quality improvements and convenience, and paid for the privilege. Now it seems consumers don’t think they should have pay to move their collection of music to their computers and media players, and especially not pay to receive an inferior quality copy of something they already own. It just doesn’t make sense. “Illegally downloading” seems logical. Digital copies of music, which were until recently usually DRM crippled, and are still poor quality in relation to CDs, are simply unattractive.
We never had to pay for any shifting before.
Copy something from radio to tape to cd to computer, etc? When did we ever pay for that? Problem is the opposite, they want us to pay for that now.
Never trust IFPI. IFPI are retarded LIARS! IFPI is fucked up corrupt gang.
Pages: « 1 [2] 3 » Show All
Responses are closed
All remaining responses will continue to be archived. Use the TorrentFreak forums if you want to discuss something.