p2pnet - rss feed: The RIAA still doesn’t get it
p2pnet.net news:- “Today’s music marketplace has challenges but it also offers reason for hope and optimism,” says RIAA ceo and chairman Mitch Bainwol in the Big 4 unit’s annual report for shipments of discs and downloads for 2006.
“The appetite for music is as strong as ever and a digital marketplace now worth nearly $2 billion has emerged virtually overnight.”
“Worth” does not mean “achieved”, although Bainwol is correct in stating the digital market place is burgeoning.
Nor, of course, has it emerged virtually overnight. The potential has been there since the 1990s when the first mp3 went machine-to-machine. However, EMI (Britain), Vivendi Universal (France), Sony BMG (Japan and Germany) and Warner Music (US), the people behind the RIAA (Recording Industry Association of America), have yet to significantly capitalise on it, failing to use peer-to-peer companies and technologies as the 21st century marketing, sales and delivery vehicles.
Instead, in a fruitless effort to gain total dominance of online distribution and distributors, they’re using legal systems to try to clear the field of actual or potential competition, establish artificial price levels, and regain control of once docile and compliant consumer bases.
More than one million songs a day are shared online as mp3s, says a new IDC white paper. But Big 4 shareholders aren’t seeing any returns on that.
Unsupported Apple statistics say the company has sold around two million downloads since it started in 2003. And Apple, the only serious corporate online music game in town, is at odds with the labels.
“Our continuing mission is to help level the playing field so retailers and legal services don’t have to compete with piracy and to work for parity in a marketplace with increasing convergence between various music distribution and broadcast outlets,” says Bainwol.
But, “A British media research company has peered into the music industry’s crystal ball, and the outlook for the next couple of years isn’t so hot,” said Ars Technica last week, going on:
Global music sales will drop to $23 ion in 2009, just over half of 1997’s $45 ion and down 16 percent from 2006. The biggest reason for the steep decline is a drop in CD sales, which Enders Analysis believes will not be fully offset by digital sales in the next five years.
Is piracy to blame? Is DRM the solution? Enders Analysis says no, instead laying the blame for the industry’s sliding sales at the feet of the record labels. “As we analyze the industry’s core challenges… we consistently find that the industry has lost the ability to influence and control its future,” reads the report’s executive summary.
“Worse, the industry has often appeared caught short, and its reactions accordingly wrong-footed.”
Meanwhile, in 2006, there were 586 million digital singles downloaded, a 60% increase over 2005, and 28 million albums downloaded, a 103% increase, says the RIAA.
Revenues from “various mobile formats” grew 84& to $775 million and subscription service revenues were $206 million, a 38% increase over the prior year., it says.
“The growth in digital revenues partially compensated for the decline in physical sales.
“The overall retail value of the U.S. record industry was $11.5 ion in 2006, a 6.2 percent decline compared to 2005. There were 615 million CDs shipped to retail and specialty outlets in 2006, a 12.8 percent drop from the previous year.
“Specifically for the Latin music genre, approximately 41.6 million CDs were shipped to various retail outlets, representing $561 million in retail value. This was a 21.3 percent decline in value compared to 2005.”
“”It is quite possible that we were too conservative in our estimate of illegally shared songs over peer-to-peer networks,” says the IDC paper The Expanding Digital Universe in which the billion-a-day download figure appears.
In another story, “Retailers and legal services will always have to compete with piracy, and no amount of file-sharing litigation is going to change it,” says Ars Technica, adding:
File-sharing still goes on, with much of it pushed deeper into the recesses of darknets to evade detection. The music industry will always have to compete with “free,” since it remains a viable alternative to millions of music fans, despite the record industry’s best efforts to eradicate it.
Some influential figures in the music industry do grasp the necessity of competing with pirates. When he announced that music at the iTunes Store would remain at 99¢, Apple CEO Steve Jobs framed the decision in part by the need to compete with piracy. “If the price goes up, [consumers] will go back to piracy and everybody loses,” said Jobs. And he’s not the only one who understands it.
The unfortunate fact for the RIAA that Bainwol doesn’t seem to grasp is that the game has fundamentally changed forever, and there’s no going back to the days of year-over-year revenue growth, at least not for the next five years or so. CD sales are on a downward slope and they’re taking the industry’s revenues with them.
Also See:
IDC white paper - 1 billion songs a DAY shared online, March 8, 2007
Ars Technica - DRM, lock-ins, and piracy: all red herrings for a music industry in trouble, April 12, 2007
Ars Technica - Despite revenue slump, RIAA still not getting the big picture, April 18, 2007
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Tired of being treated like a criminal? They depend on you, not the other way around. Don’t buy their ‘product’. Do bug your local politicians. Use emails, snail-mail, phone calls, faxes, IM, stop them in the street, blog. And if you’re into organizing, organize petitions, organize demonstrations and then turn up on your local political rep’s doorstep, making sure you’ve contacted your local tv/radio station/newspaper in advance. Don’t just complain. Do something!
April 19th, 2007 at 11:04 am
They don’t have to get it.
They own our congress and our courts.
April 19th, 2007 at 11:08 am
One of the things that will result from the increased combatting of online filesharing is not just the increased utilization of darknets but also sneakernets. While there may be a decrease in the ability to seek out the songs you might want, the sheer volume of files that could be transfered quickly and easily, without detection, would increase exponentially. Instead of having to seek out and download music over the net, a friend could bring over his whole collection and give you a copy of gigabytes and gigabytes of music in under an hour.
April 23rd, 2007 at 10:00 pm
Doesn’t matter WHO they own….it is not doing them much good….p2p is STILL the number one way of getting files…that won’t change…no matter WHO’S palm they grease!
April 23rd, 2007 at 10:02 pm
Yeah and if your “friend” is caught, you down down with him! No thanks!
April 23rd, 2007 at 10:02 pm
Yeah and if your “friend” is caught, you Go down with him! No thanks!