On CD sales and bad business
Jan. 13th, 2005 03:28 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
xparrotSo I just read a Broadcasting & Cable article about the industry's sudden abject fear of downloading, e.g. the recent Bittorrent suits. The main reason the TV and film industry is panicking is because of the impact of downloads and filesharing on the music industry. The article fairly pointed out that the comparison may not be that valid. Even if it is, however--the RIAA's not the model they want to be following. They've been battling the 'Net for years now. And they're losing. And it's their own damn fault for picking the fight to begin with.
Forget about the mp3 competition, go back to the market basics, supply and demand. The demand's decreased a bit; do you: A) lower prices on vastly overpriced merchandise, or B) raise prices on a non-essential good during a recession. I've never taken economics but B sounds like an awful stupid idea.
I've got another hunch about why CD sales have dropped in the last couple years. A few days ago I realized I didn't actually have the original Phantom of the Opera on CD, just tape. I'm a first generation mp3-er, the sort who remembers midis and Napster's first incarnation. I have an internal rule that is more based in questionable morality than legality, that if I want more than two mp3s off an album I'll buy the album, if it's available. So I went to BestBuy to pick up Phantom, and choked at the pricetag - $35.
In the grand scheme of things, this isn't so much. Except when you can hop two aisles over and buy, for the same price, the extended edition of The Return of the King on DVD. With something like 12 hours of video footage, most of it original for the disks. Compared to the Phantom CDs, with 2 hours of audio, prerecorded years ago.
Now, people have known intellectually that CDs are dirt-cheap to produce for years. But even after we got our own burners and could copy a CD for a couple dimes, less than a blank casette ever was, pro CDs still seemed to be justifying their price somehow. Pretty packaging, lyric booklets, that's gotta cost something. Printing on the disk. Yeah, that was worth it. And when DVDs came out, they were highly priced, justifed by their super-snazzy look and video quality.
And then DVDs really caught on, and the price dropped - and kept dropping. You can buy movies for $5.99 at BestBuy - you were hard-pressed to ever find a VHS for that cheap ten years ago, and even the cheapest DVDs usually have a special feature or two. Not to mention being higher quality, (arguably) more durable, easier to store and watch...all those advantages we were willing to fork over more cash for CDs over audio casettes, only DVDs are cheaper than VHS.
People have a finely-tuned sense for being ripped off. It's not necessarily an accurate sense, but when you can get the soundtrack of a movie for $15, and the movie itself with extras for $14...that's gonna make anyone think twice. Even people with the cash would hesitate; for the demographic most into mp3s, the college crowd, money is an issue. Drop the price of a CD to $5 and see how many more get sold.
Admittedly, lowering the price of CDs wouldn't work forever. Like vinal and cassettes before them, they're already becoming obsolete media, superseded by the iPod and its ilk. But rather than exploring all the new developments in music distribution, and finding ways to use them to their advantage, the RIAA would rather sue mp3 traders and siteowners. People who are appropriating their 'intellectual property' not for profit, but because they love it that much, they want it that much. Rather than seeking a way to exploit that want, they're trying to suppress it at all costs.
Modern US media capitalism is creating a model that the consumer is the enemy who must be thwarted, rather than catered to. Does this strike anyone else as insane? There are people now who aren't buying CDs, not because they can get mp3s for free, but because they're boycotting the RIAA. Again, I'm no B-school graduate, but making yourself the nemesis of your customers cannot be good business practice. If you fine or jail everyone - who's gonna buy your CDs?
Do I know what the solution is? Not a clue. But I know what it isn't. Fighting against progress only delays the inevitable, and often enough that inevitable doesn't turn out to be what's most feared anyway. Television was supposed to put the cinemas out of business, but you can still go to the movies. The Internet might yet mean the end of the music industry as we know it. But people are still going to make music, and people are still going to listen to music, and any industry that tries to stop the very artistic process it purports to produce doesn't deserve to exist.
By the way, I didn't buy the Phantom CD. Haven't downloaded it, either. At least, not yet.
Forget about the mp3 competition, go back to the market basics, supply and demand. The demand's decreased a bit; do you: A) lower prices on vastly overpriced merchandise, or B) raise prices on a non-essential good during a recession. I've never taken economics but B sounds like an awful stupid idea.
I've got another hunch about why CD sales have dropped in the last couple years. A few days ago I realized I didn't actually have the original Phantom of the Opera on CD, just tape. I'm a first generation mp3-er, the sort who remembers midis and Napster's first incarnation. I have an internal rule that is more based in questionable morality than legality, that if I want more than two mp3s off an album I'll buy the album, if it's available. So I went to BestBuy to pick up Phantom, and choked at the pricetag - $35.
In the grand scheme of things, this isn't so much. Except when you can hop two aisles over and buy, for the same price, the extended edition of The Return of the King on DVD. With something like 12 hours of video footage, most of it original for the disks. Compared to the Phantom CDs, with 2 hours of audio, prerecorded years ago.
Now, people have known intellectually that CDs are dirt-cheap to produce for years. But even after we got our own burners and could copy a CD for a couple dimes, less than a blank casette ever was, pro CDs still seemed to be justifying their price somehow. Pretty packaging, lyric booklets, that's gotta cost something. Printing on the disk. Yeah, that was worth it. And when DVDs came out, they were highly priced, justifed by their super-snazzy look and video quality.
And then DVDs really caught on, and the price dropped - and kept dropping. You can buy movies for $5.99 at BestBuy - you were hard-pressed to ever find a VHS for that cheap ten years ago, and even the cheapest DVDs usually have a special feature or two. Not to mention being higher quality, (arguably) more durable, easier to store and watch...all those advantages we were willing to fork over more cash for CDs over audio casettes, only DVDs are cheaper than VHS.
People have a finely-tuned sense for being ripped off. It's not necessarily an accurate sense, but when you can get the soundtrack of a movie for $15, and the movie itself with extras for $14...that's gonna make anyone think twice. Even people with the cash would hesitate; for the demographic most into mp3s, the college crowd, money is an issue. Drop the price of a CD to $5 and see how many more get sold.
Admittedly, lowering the price of CDs wouldn't work forever. Like vinal and cassettes before them, they're already becoming obsolete media, superseded by the iPod and its ilk. But rather than exploring all the new developments in music distribution, and finding ways to use them to their advantage, the RIAA would rather sue mp3 traders and siteowners. People who are appropriating their 'intellectual property' not for profit, but because they love it that much, they want it that much. Rather than seeking a way to exploit that want, they're trying to suppress it at all costs.
Modern US media capitalism is creating a model that the consumer is the enemy who must be thwarted, rather than catered to. Does this strike anyone else as insane? There are people now who aren't buying CDs, not because they can get mp3s for free, but because they're boycotting the RIAA. Again, I'm no B-school graduate, but making yourself the nemesis of your customers cannot be good business practice. If you fine or jail everyone - who's gonna buy your CDs?
Do I know what the solution is? Not a clue. But I know what it isn't. Fighting against progress only delays the inevitable, and often enough that inevitable doesn't turn out to be what's most feared anyway. Television was supposed to put the cinemas out of business, but you can still go to the movies. The Internet might yet mean the end of the music industry as we know it. But people are still going to make music, and people are still going to listen to music, and any industry that tries to stop the very artistic process it purports to produce doesn't deserve to exist.
By the way, I didn't buy the Phantom CD. Haven't downloaded it, either. At least, not yet.
