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.
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no subject
Date: 2005-01-13 12:58 pm (UTC)oh god, I LOVE YOU.
bookmarking this for rec.
no subject
Date: 2005-01-13 01:12 pm (UTC)@_@!
http://froogle.google.com/froogle?q=827969352229&hl=en&lr=&c2coff=1&safe=off&tab=wf&scoring=p
:D
no subject
Date: 2005-01-13 01:49 pm (UTC)When I buy CDs (which I do much more now that I can find new artists to love by downloading their stuff), I either get them used, or from cheap on-line stores. And getting them used... isn't that "stealing" too, by their definition? Gah.
Did you know downloading anything is not illegal in Sweden? Doesn't stop the big companies from trying to make it out to be a crime, and doing their damnedest to have the law changed on several points... It's probably only a matter of time, but for now, it still falls under our version of "fair use". Here's (http://www.thepiratebay.com/frame.html) an interesting place - you should check out the Legal Threats (http://www.thepiratebay.com/frame.html). They're funny. Hysterical, actually, because it feels so good to see someone answer a cease & desist letter with something amusingly obnoxious.
Anyway. It's a funny thing, that. It's legal to download, but almost everyone in Sweden you talk to will tell you it's not. Isn't that interesting? Several big names in the business have formed something called the "Anti-Piracy Agency", and they have big campaigns telling people that "Downloading is Theft". They spy on individuals who use download programs such as DC, and then write letters to their ISPs. In some cases, the ISPs shut the user down as a result.
Some ISPs have also blocked the up/download speed on ports used for BitTorrent... most ISPs however realize that people aren't paying all that money for the fastest connection just to be able to mail their grandmothers, and feel it'd be counter productive for them to ban users for taking advantage of said download speeds. Interesting situation.
Argh, and more of this behaviour: MTV is running a campaign right now which is just another reason for me not to watch MTV. Ever. If there was a way not to pay for them and keep Discovery, I would, in a heartbeat. The campaign is a series of ads that go along the lines of: Girl steals bag. Big letters proclaim "Stealing Is Wrong". Then this changes to "Downloading Is Stealing". I think. I don't really know.
no subject
Date: 2005-01-13 02:27 pm (UTC)thanks, tho'! ^^
no subject
Date: 2005-01-13 02:48 pm (UTC)Ack, we'll see how long the Pirate Bay lasts. (tho' I love their attitude. wish I could read the Swedish responses!) They're pushing to outlaw BitTorrent now and I'm sure they'll try to get it through the EU as well...oh well. I give the geeks 6 months to come up with a BT alternative if it actually passes - which it might not. BT's got some big guns on its side, for all the legal applications it has; there's been corporations using it for uploading stuff with cheaper bandwidth costs. But even if they do get it stopped - Napster was replaced how fast? They're fighting the Hydra here, without fire. It'd be pathetic if it weren't so damn annoying to have to hunt up new sites all the time.
and ARRRRRRRGH ^!@*#^#T$@ to MTV. See, this is why I don't have cable, my poor TV's screen would be bashed in by now!! Intellectual property is NOT FUCKING REAL PROPERTY, therefore 'stealing' it CANNOT BE EQUATED WITH ACTUAL THEFT. YERGH. I'ma 'bout ready to kill the moron who came up with the whole intellectual property concept. yes, it has a good function, yes, copyright helps creators. And yes, there is a certain degree of imbalance in people getting creative works for free when the creators are trying to make a living off them. But at this point the laws governing those concepts have become so unwieldly that I seriously think we need to scrap all of them and write them over from scratch...
no subject
Date: 2005-01-13 02:51 pm (UTC)no subject
Date: 2005-01-13 02:57 pm (UTC)I sort of operate on the tip principle now. If I like the artist and want to support their music I go ahead and buy a CD. But I never buy without downloading the album or a sample first. There's just too much crap out there and the prices are too high to take a blind leap of faith.
Wee! A rant of my own!
Date: 2005-01-14 04:57 am (UTC)When the riaa first started complaining about how Napster was hurting CD sales (I believe this was around '99), they pointed to statistics showing a rapid decrease in CD sales. Guess what time period it was when most labels stopped selling CD singles because people were buying the singles instead crap albums of filler? Of course, that information wasn't presented to the general public - only that Napster exists and Hey! our sales are slumping.
Another interesting point about which most people aren't aware: the CD sales statistics the riaa uses are tabulated by how many units are shipped to record stores, not how many units are actually purchased by consumers. Record stores have been moving to an as-needed style of in-store stock management, stocking less items to keep overhead below. So the reports of sale slumps have less to do with how many CDs are being purchased, and everything to do with increased efficiency at sales points.
I'm sure you're aware of Janis Ian's site, but it can always stand more pimping to anyone who needs any more reason to cry foul at the riaa.
Personally, I find it ironic that I am forcd to download mp3s of albums I've purchased, because the CD's copyright protection will not let me rip files for use on my legally purchased mp3 player. And to give you an idea of cost - I just purchased 3 CDs today. The price tag came out to about $80. I sincerely doubt the artists responsible for the music on those CDs will see much, if any, of that money.
PS: Until MTV starts airing actual music, I don't think they have any right to talk about mp3 downloading.
no subject
Date: 2005-01-14 12:53 pm (UTC)As we've both sat for long periods of time and mutually ranted over this issue, I don't have really anything to add, except that, neesama, darling, you truly do have a knack for putting these things oh so eloquently!
Re: Wee! A rant of my own!
Date: 2005-01-27 09:20 am (UTC)I am completely with you here. I could buy Japanese CDs with copyright protection that won't even let me play the CD on my computer, just because I'm not a resident of Japan. (That threw the idea of buying that particular CD for my boyfriend out the window.) If the US starts doing things like this, I'll be swearing off CD buying for life.
Re: Wee! A rant of my own!
Date: 2005-01-28 01:38 pm (UTC)And really fascinating stuff about the RIAA's manipulation of statistics. Of course confusing people with stats has always been a tried and true method of argument, considering how easy it is to gloss over the fundamental "correlation does not equal causation" truth...I've heard half a dozen hypotheses of why CD sales drop, to the point that one must doubt whether mp3 downloading had a statistically significant impact at all...
The RIAA's always been an evil corporation, my father's much more into music than me and has regaled me with stories of the horrible ways they've dealt with their artists...attacking their customers as well is a newer trend, but not that surprising. My dad has a story (likely apocryphal, but still telling) that the reason they initially took to suing their consumers over mp3s was because they did a poll and found that the general public opinion of the RIAA was as low as it could get, right down there with loansharks and ambulance chasers...so they had absolutely nothing to lose with the suits.
And, yes, I have no problems with paying money - I want to pay the creators for my efforts. I'd just rather donate $20 direct to a band than pay for their CD by this point...at least that way I'd know they got it!
no subject
Date: 2005-04-15 09:52 am (UTC)