No ‘quick fix’ for music labels, says EMI
p2pnet news view | P2P | Music:- “EMI reported a 40 per cent fall in new music sales in the year to March,” says the Financial Times.
“EMI Music, the recorded music division, has suffered disproportionately from the challenges the industry is facing,” the story also says.
Under new ownership or not, it’s a member of the corporate music industry Big 4 sue ‘em all gang, with Vivendi Universal, EMI, Warner Music and Sony BMG as the other three partners in crime.
“CD sales have halved since 2000 and free music continues to thrive illegally online,” says the FT, and following the 40% drop statement, it says the company has, “had success with the breakthrough of artist Katy Perry and the huge success of Coldplay`s Viva La Vida, the year`s biggest-selling album,” as though that somehow mitigates EMI’s serious drop in sales.
There is, of course, absolutely nothing illegal about free music, any more than file sharing is illegal, although the corporate music industry has spent millions of dollars to promote the erroneous beliefs.
Meanwhile, are EMI, et al, suffering calamitous losses because of their bizarre campaign to use law courts around the world to try to sue music lovers into buying corporate ‘product,’ and only corporate ‘product,’ as they strive to dominate how and by whom music is served up online?
The answer is, obviously, Yes! The only real question is: to what extent? And we’d guess the labels have haemorrhaged, and are continuing to haemorrhage, significant numbers of existing and potential customers because of their wrong-headed policies as much, if not more, than exterior circumstances.
“In an annual report from Terra Firma, the private equity group that bought EMI in August 2007, the company said it would be ‘more selective’ with its artist relationships,” says the FT, going on:
‘More selective,’ eh?
“For the nine months to December earnings before interest, tax, depreciation and amortisation rose from £12m to £104m at EMI Music,” says the story.
Only £104 million when Terra Firma paid $4 billion for EMI? And the $104m is before interest, tax, depreciation and amortisation?
Earnings from the music publishing division increased from £81m to £91m, “but revenues were 1.6 per cent below budget, it says, also quoting Terra Firma boss Guy Hands as saying there’ll be no “quick fix” for EMI which, “like all the leading music labels, is facing a slow decline in revenues as consumers increasingly purchase music online”.
And to worsen the situation, “There are also serious concerns about the future availability of music retail space following the collapse of retailers such as Woolworths and Zavvi,” adds the FT.
One possible solution tol EMI’s troubles, as well as those of Vivendi Universal,Warner Music and Sony BMG, is staring it in the face:
Open music catalogues, cut wholesale prices, open the doors to competition, admit P2P is where it’s at, and start treating customers with respect and consideration instead of ceaselessly harassing them, and accusing them of being filesharing criminals and thieves.
Financial Times – Cuts allow EMI earnings to rise sharply, March, 2009
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March 3rd, 2009 at 12:40 pm
or just die and go away.
March 3rd, 2009 at 12:59 pm
I think there’s an important quote here they are missing: “is facing a slow decline in revenues as consumers increasingly purchase music online”, key word PURCHASE! Yes, people still purchase music, the masses just prefer to get it online instead of going to a store and paying $15-$20 for less than equal to 3 good songs (that’s between $5 and $6.66 per song the customer wants). AND purchasing online is a cheaper infrastructure to maintain, with greater exposure if they choose to open and drop the country-based boundaries.
Yes I know, licensing will not be as clear and easy as every company in the other countries will have to compete with your product, but you’ll be competing with theirs! So win-win if you are willing to be fair (which I doubt).
And all those CD shops will NOT die off! Lower the prices, lower the margins, and they will not necessarily thrive as they once did (you know, when people were REPLACING vinyl and tapes) but they will still be profitable. Less bling in the stores is a great way to save costs!
Many of us still like the CD so it is not the end of the world, just the end of the glory days that were misconstrued out of failure to analyze the demographics of CD sales in the 90’s.
Total sales don’t mean shit when you’re trying to sort out what people are buying! Look at the demographics, from 1960 – 2008, grab it all, and then chart it by year with percentages. You can easily do it with M$ Excel, you’ll have from 1960 – 2008 along the X-axis and the Y-axis will have stacked sales numbers for each year, meaning in 1980, you’ll know how many albums purchased from 1980, 1979, 1978, etc… down to 1960. With that information, even as percentages in blocks of years, as in %1978-1980, %1974-1977, %1969-1973, etc… though the yearly details would yield a better understanding!!!
I am willing to bet if one was able to do that you’d see a huge drop-off of new album sales each year (regardless of the CD totals going up in the 90’s) starting with 1983, when most glam-rock bands were created in LA. The drop off won’t be in absolute numbers, but as a percentage compared to the total sales.
Don’t stop at CD sales either, have separate charts for vinyl and cassette tapes.
This would be excellent data and it MUST be made public. There would be an end to all the BS, as real data would have a chance to speak!
March 3rd, 2009 at 1:09 pm
WE ARE BOYCOTTING!
Since they started their terorist acitvity 5 years ago I bought not even one recording from any RIAA member!
(During the same time I bought about 30 CD from indies.)
I did not bought any DVD or went to the theater during the last 3 years, after the MPAA also turned rogue on the public.
The RIAA is dead and the 4 majors are diyng!
Good ridance!
March 3rd, 2009 at 3:21 pm
We are fortunate that there has been a perfect storm in music sales. Otherwise, the majors would be content to continue on blithely without any change whatever. The economic pressures that are being put on them means they will have to change to survive. It’s not if they will change but rather when.
All the containers that were used to put music on to sell to the customer prior to the cd were not very durable. Repeat sales were driven by replacements for both the worn out containers..such as tapes going bad or by the changing of the container..such as 8 track to cassette. With the cd, the replacement driven sales dried up. Cds go bad for sure, mostly by either heat related damage, like being in the sun in a car, or by lack of care that resulted in scratches on the surface. Other than that, replacement sales dried up.
Recognizing this the majors have once again went for the sure fire moneymaker, changing formats to digital. Only a lot of the public isn’t going along with them. Most find nothing wrong with their cds. Players continue to be sold because the market is still there, unlike the 8 track which you just about can’t find a player nor a tape to play.
Probably the biggest division in this is by age. Younger music listeners prefer the convenience of digital tracks. Older listeners don’t mind continuing to use the CD. Even with cd usage, many now rather use the mp3 rather than the straight lossless format that the original provides.
What happened here is that the public at large didn’t just jump on the new format and start replacing. So this time changing formats hasn’t driven the huge replacement sale.
For many, digital tracks doesn’t provide any value for the money in the sense you can’t hold the product in your hand. So there is this unsatisfied idea in the back of the mind that there is nothing to show for the money. You no longer have that big beautiful artwork to look at and pour over after the sale that were one of the hallmarks of the vinyl age. Another of the sales points that drove sales was taken away.
Now many can’t understand the cost of music, I know I don’t. I know what it costs me to make a cd and it is no where in the range of what is being charged for digital tracks. The model of scarcity is broken and that makes the model that allowed these high charges to break as well. That’s why folks are buying singles instead of albums. They don’t want the trash that the previous methods of containers forced them into. The majors were quite happy to stuff the album with trash and continue to collect on them. The customer felt the screw job that this was doing and has taken it into their own hands to make it right.
So far the majors haven’t gotten the idea the customer is always right and it’s showing on the bottom line. It’s the wake up call they will not be able to ignore. Making themselves a hated part of the industry has done nothing in the customers mind to encourage them to go to buying. If fact it’s done the opposite.
The economy is showing that music is a luxury, not a necessity like food to have. When choosing between having something to eat or being able to pay the electric bill and having entertainment, guess what comes in second? Without jobs that pay more than minimum wage, that is just what the customer is facing and the bottom sales line at the entertainment industries is seeing that.
The shipping of jobs overseas to lower wage areas has resulted in middle class wage earners being an endangered species. With that goes discretionary spending income. If you ain’t got it, you’re not going to spend it. The economy is cratering much for the same reasons. GDP has been based on customer spending. It too has been left in the lurch as service jobs aren’t paying what is needed to keep the economy advancing.
So in the end, we’ll hear it’s all because of the pirates… not that the major music houses are changing for the better. Far easier to blame something else than to bite the bullet and do what is necessary to make it right. That time is running out for the majors as the income starts to dry up.
March 3rd, 2009 at 4:23 pm
Very good point. Why cant the corporations see this?…I bet they can and it scares the shit out of em.
March 3rd, 2009 at 7:54 pm
A few corrections:
*The article lists EMI twice when listing the “Big Four.”
*Universal Music Group is Universal’s music label, although Vivendi Universal is the parent company.
*Sony, as of late last year, is no longer “Sony BMG,” but now “Sony Music Entertainment.”
March 3rd, 2009 at 9:45 pm
The sad ( I guess ) part is that the internet could have been a goldmine for them and they have blown it so bad they might never recover. They should have just gone by the simplest of rules: The customer is always right.
March 3rd, 2009 at 11:09 pm
They either learn or die, its a choice, looks to me like they chose to DIE!
theres an old (very old) saying “you can lead a horse to water, but you can’t
make him drink” We have shown the big 4 the water, seems like we might as
well drown them in it, cause they damn sure aren’t gonna drink it
I found a bit of info from 2000 all of you might find interesting, about just how
badly the artists have been dicked over the years, here’s the address
http://www.ibiblio.org/jimmy/mcguinn/Senate.html
Thanks to Ray Beckerman for the point too on this!!
Copyfight
stw
March 4th, 2009 at 2:13 am
Some other stuff to consider (which they’ll never actually admit):
1. Milli Vanilli woke a lot of people up, because from start to finish, that whole saga demonstrated the “major lavels’” utter contempt for both their customers AND the artists they claim to represent/serve. I mean, come on now — what kind of bullshit is recruiting two talentless “models” to lip-sync/bullshit their way to fame while the REAL musicians creating the stuff are kept behind the scenes? This isn’t even the standard “session musicians never get noticed” thing — it’s the most blatantly contrived “act” since the Monkees (but at least the Monkees had some catchy material, and eventually took creative control.) So that was a big wake-up call as to how “the industry” actually works.
2. Another big current of discontent came out of the “Seattle Scene” and grunge in general. It’s not so much that “indie” broke through at that time (the Net hadn’t really taken off as a major global force in the early 90s), but rather that grunge — and “alternative rock” in a more general sense — marketed itself as a diametrically opposite to the “hair bands” of the 1980s, and there was a lot more ‘consciousness’ to the stuff than, say, Guns & Roses.
Throw in that essay “The Problem with music” — “Some of your friends are already this fucked” etc. — and you have people, probably for the first time, seriously reconsidering whether “Signing” is such a good deal.
3. Then the Net came along, and between “unsigned artist” sites like mp3.com and Amazon allowing folks to leverage the “first-sale” doctrine on a global scale (it wasn’t just about going to your local record store and rummaging around anymore. Now you had access to the castoffs of the entire planet, practically) — well, it makes perfect economic sense that people would opt for the less expensive alternative. Throw in the fact that “first-sale” means the “labels” don’t get shit, and that’s just another perk in my book.
4. DRM == fail. People have been trained for decades in a “consumer” mentality, as regards cultural artifacts: they see their primary role as “buyers”, so when the “product” they’re paying for suddenly starts to be intentionally designed wrong, that’s gonna piss people off even more.
5. Word of mouth and “grazing” around on the Net is way more powerful at taste-shaping than the homogenized drivel force-fed to us on our local clear-channel crapola station. People get bored with the same four or five ’singles’, and want to hear something that’s actually worth hearing. This isn’t a generational thing, it’s an awareness thing. (Although I’m probably the worst person to talk about “generational” stuff because I have 7500 vinyl albums, have been an avid collector of Big Band and swing music from the 1940s since I was ten, only got “into” the grunge bands of the 1990s a few years ago, etc. So I’m pretty far off of the “mainstream” as far as my tastes etc.)
6. Economic downturn, anyone? “War on Terror”, anyone? Somebody needs to track CD sales relative to sales of yellow ribbon “support our troops” magnets and other artifacts of our post-9/11 paranoia. There’s probably a trend there somewhere.
Good points, Robert.
March 4th, 2009 at 2:21 am
“he economy is showing that music is a luxury, not a necessity like food to have. When choosing between having something to eat or being able to pay the electric bill and having entertainment, guess what comes in second? Without jobs that pay more than minimum wage, that is just what the customer is facing and the bottom sales line at the entertainment industries is seeing that.”
I’d disagree.
There’s a big difference between the claim that “music is a luxury” and “buying overpriced music is a luxury”. To my way of thinking, the more people CREATE THEIR OWN MUSIC (or write fanfiction, poetry, whatever) the less incentive they have to be passive “consumers” of music, and the more they’ll become ACTIVE PARTICIPANTS.
Evidence?
Open-mic nights, poetry slams, jam sessions, everybody and their cousin seems to have a bar-band, etc.
It’s the same as how people aren’t sitting mindlessly staring at network TV anymore. Instead, they’re actively commenting on discussion boards, creating podcasts, blogging, editing wikipedia, etc.
To my way of thinking, it’s the CARTELS who benefit from the notion that music (or any other creative activity) is merely a luxury, commodity, or “frill” — rather than, say, a vital aspect of your life: something you actively experience and participate in.
Hard to explain what I’m going for, here. Suffice it to say that music is very literally my life-blood and soul, and I STILL won’t pay twenty bucks for the major labels’ shitty nonsense.
But yeah, agreed about the bills and such.
March 4th, 2009 at 12:17 pm
Wrote about this a little while back:
http://ezee.se/articles-blog/2008/11/24/riaa-backers-suffer-emi-sony-bmg-warner/
All I can hope for is: one down, three to go!
Keep boycotting these people, vote with your wallet and keyboard!
Cheers!
Ryan