p2pnet - rss feed: Big Music’s dirty secret
p2p news / p2pnet:- Now it can be revealed. Long-time p2pnet contributor Alex Malik is Canadian! Just like p2pnet ; p
Read on >>>>>>>>>>>>>>>>>>>>>>>>
It’s time to come out of closet … so to speak. Although I’ve lived most of my life in Australia, I was born in Montreal. I’d even still have a Canadian passport, had the Canadian government not declared my Quebec issued birth certificate void (insert expat whinge here!)
But every now and then my nationalism pops its head up – usually through my music collection. There are examples in my CD collection – nothing too eclectic - Martha & the Muffins, Red Rider, Amanda Marshall, Barenaked Ladies, Tegan & Sara, and kd.
Anyway, some time ago I set myself a simple task. I wanted to buy Sarah McLachlan’s new CD. The Delerium track Silence as remixed by Tiesto had turned me onto her, and I’d picked up the back catalogue.
Thanks to various web sites, I knew a new CD had been released in North America but when I went to various retail stores in Sydney, I was amazed to find it hadn’t been released in Australia, and wouldn’t be released for some time to come.
First store: “not out yet”.
Second store: “it’s out later this year … maybe”, and my favourite …
Third store: “you mean Sarah McLeod …” (Australian singer – a bit harder – but a genuine talent in her own right)
Why couldn’t I buy the CD wanted? It was a good question which required further analysis. And as a result, I examined the Australian new release CD information which is included in the weekly ARIA Report. (The ARIA is the Australian equivalent of the RIAA or CRIA). [The CRIA is, in turn, the Canadian Recording Industry Association of America, an RIAA clone – Ed]
My first study was completed over Xmas 2004. I found there’d been a substantial fall in new releases by major record companies over the preceding 12 months. I followed it up earlier this year. Same result.
This wasn’t a message ARIA wanted disseminated widely given that they’d blamed falls in domestic CD sales on everything from competing entertainment products to internet piracy.
No mention of diminished choice for consumers.
No mention of reduced supply resulting in reduced sales.
Fast forward six months and the ARIA has reported that for the first six months of 2005, the volume of recorded music product shipments to retailers fell 7.54%, while their wholesale value fell 11.82%.
This time, the ARIA attributed the fall to a number of factors including the impact of charitable appeals following the Boxing Day Tsunami, and subdued general retail activity.
I updated my study of new releases in Australia and found the number of CD albums, singles and music DVDs released by Australia’s largest record companies has diminished by 33% over the past two years.
The number of albums released diminished by nearly 37% for the 2 years, and the number of singles releases diminished by 44% for the same period. Music DVD releases increased by 17% over the same period. While the decrease in new releases was most pronounced from 2003 to 2004, in the first six months of 2005 there was a further decrease in major label new releases, especially new release singles.
This analysis demonstrates a continuing major reason for the decline in sales in the Australian market – a reduction in choice for local consumers.
When consumers can’t find the CDs, they look for other content such as games or DVD films and, of course, they buy CDRs and download tracks from the internet. ARIA’s mid year sales figures also surprisingly don’t include authorised digital music sales.
LEFT - Deconstructing ARIA sales figures:
An analysis of new release CDs by the Majors + FMR for the first six months of 2005, 2004 and 2003. Source: ARIA Report
The ARIA says: “The first half figures do not include digital music sales, including emerging sales of ‘mastertone’ ringtones. To date, comprehensive information regarding the value nd (sic) volume of the digital music market has not been available to ARIA . Initial reports suggest that this sector of the market is still relatively small.”
This is surprising. Digital download sales figures are included in international sales figures. For example, the RIAA in the US includes the value of digital singles and albums in their six monthly and annual sales figures.
It’s been widely reported that download sales don’t count towards the ARIA singles and albums chart, and unlike the US and UK, there are no stand-alone download charts. That’s ironic given that the ARIA charts used to be known as the ARIAnet charts!
Web sites that make tracks available as authorised downloads should be central to the business models for record companies.
When record companies make tracks available as paid downloads, they don’t have to worry about artwork, packaging such as jewel cases, physical delivery, or traditional retail concepts like sale or return. There’s no reason why many more tracks can’t be released by the majors as paid downloads – even if in some cases there is no equivalent physical CD released.
A large number of digital download exclusives could be just the thing to boost choice for consumers, while they help develop the existing authorised services currently provided in Australia. These paid downloads could be included in the new release data and the official sales figures.
While Australians await the introduction of an iTunes service in Australia (this thing is starting to take on a messianic feel), record companies need to embrace new business models and look towards the future. There’s nothing to be gained by record companies and technology companies battling over the minutia of licensing deals, while recording artists continue to lose sales royalties, and music consumers continue to lose patience.
Note: from March 28, 2005, the Sony BMG merger took effect and all Sony and BMG releases were made under the SBME (Sony BMG Music Entertainment) label.
Alex Malik
[In 2001, Malik participated in the Consultative Forum of the Copyright Law Review Committee examining Copyright and Contract, representing the ARIA, PPCA and IFPI. He’s currently undertaking a PhD in law, with a specialisation in copyright law in the digital age.]
=======================
Something you think we should know? tips[at]p2pnet.net
September 15th, 2005 at 3:43 pm
Nice article, we can use ‘raw’ data like this in the future.
September 15th, 2005 at 6:37 pm
I agree. Well done. I didn’t realize that new releases were down quite that much. It still doesn’t address that d/l’ing from p2ps probably does affect the amount of new releases.
September 15th, 2005 at 8:13 pm
“It still doesn’t address that d/l’ing from p2ps probably does affect the amount of new releases. ”
How would that be ….
Please, be a bit more specific.
September 15th, 2005 at 9:12 pm
When I used to shop in the music stores (before I started fining the RIAA), I would spend about an hour to try to find what I wanted. Usually, I was told that they did not have what I wanted. At that point, I would simply tell them that i would just download it. A girl behind the counter said that is exactly what she does. My guess is that she probably was paid only minimum wage and could not afford the outrageous prices for CD’s or she was equally disheartened by the lack of selection as me.
September 16th, 2005 at 12:42 am
I’ll bet this problem hits new artists worst of all. It’s hard to build a name if they won’t sell your CD!
September 16th, 2005 at 3:34 am
NOW you’re getting it
Not only new artists will be hurt, but it will be even HARDER
(if that’s possible ) for non-RIAA artists to be heard.
That’s what it’s all about … eliminating the competition.
All else is smoke and mirrors.
September 16th, 2005 at 7:31 am
I suspect that it isn’t just Australia but also in the US. By far most of the releases are “Greatest Hits” and not original new works. The cartels are working the figures by simply releasing less. They want the internet locked up so the only source is the DRMed product they put out. Till they can get the old stuff that has no copyright out they are going to sit on their duff, use the “we’re selling less” as a club to get what they wish. Doesn’t matter that we all know it won’t work, that is what they are shooting for.
Once they control the distribution point, as they did in the old model, I suspect there will be gobbs of new releases. So far what they have showed me isn’t worth considering buying having been ripped off so many times before with filler.
September 17th, 2005 at 5:10 am
Well i won’t hold my breath waiting for this story to appear in the oz mainscream newspapers. Or any other countries mainscream media for that matter.
September 17th, 2005 at 1:35 pm
I salute the internet. I am just starting in the music industry. I can easily post my own music for the world to hear. When I dont make money, so what! I get heard! Others will enjoy my music ( I hope.).
Silly me. I really thought the point of music was to be heard, not make money.
Keep sharing, good or bad, keep sharing.
September 19th, 2005 at 2:00 am
I’m from the states and have lived in AU for a few years now and I want to echo Alex’s statement concerning a lack of music here.
First let me state that I used to make weekly trips to the store to purchase new releases. I would never walk out with just one CD though. Typically I would buy 5 a week and often more.
My financial situation doesn’t allow me to do that anymore, especially considering the difference in price between a CD in the USA and one in AU. Nevertheless, I still attempt to buy music.
I say attempt because 90% of the time I go to a store, they do not have what I want. It turns out it’s not available in AU or they can see about ordering it (which they normally say takes 6 weeks or so). I’ve also experienced this situation in book stores although about 10% of the time is it not available compared with 90% in a music store.
January 7th, 2007 at 11:39 pm
I’m glad I’m not the only one who “fines” the RIAA in this way. I have thousands of vinyl, cassette and CDs in my collection. I purchase much less than I used to, not because I replace those purchased with downloaded content, but because I consider every dollar I spend on CDs to be money the RIAA will spend on lawyers.
Want to stop the RIAA suing people? Simply STOP buying their product for a couple of years. I don’t believe the lawyers will work for nothing. When the smoke clears, the purchasing public will win … it’s just a question of time!
Given Sony’s quality drop in their electronic equipment, coupled with their involvement in the lawsuits, I’m be happy to see them go under.