p2pnet - rss feed: More Big Music BS in Canada
p2p news / p2pnet: Statistics Canada is out today with a report on the state of the recording industry. The news is not good as the government’ s statistics agency reports that the Canadian recording industry experienced its worst performance in six years in 2003.
While this is old news - similar numbers have been supplied CRIA for months - there is some new data that merits further examination.
First, Statscan attributes the decline to two potential factors file sharing (which it misleadingly refers to as "illegal file downloads") and competition for the entertainment dollar from other sources such as DVDs and video games. As I have chronicled elsewhere, I believe the data suggests that file sharing is a relatively small part of the story. Competition for the entertainment dollar has certainly had an impact as the DVD was not even a consumer product at the time of the 1998 Statscan benchmark.
Just as important, however, is where those dollars are spent. The emergence of the big box retailers such as Wal-Mart (now the leading music retailer in North America) has had a major impact on pricing and back catalog sales. The pricing pressure remains evident as sales by volume are up in Canada in 2005, yet revenues have declined.
The back catalog issue, which focuses on the limited number of CDs sold at stores like Wal-Mart may be even more important than is commonly realized. The impact cannot be understated - in an industry that relied on 25 to 40 percent of revenue from sales of older works, the disappearance of those works from the shelves of the dominant retail channel must hurt industry revenues.
The impact of this development becomes even more important when you consider the Statscan data on new releases. Today’ s report indicates that new releases declined by 16.5 percent between 2003 and 1998, approaching the 20.5 percent revenue decline. The lack of new releases should stand out as a critical development as the reduced product undoubtedly reduces revenues, particularly at big box retailers who carry virtually nothing but new releases.
The other major story in the Statscan data is the profile of new releases by Canadian artists. Statscan reports that Canadian artists continue to comprise about 16 percent of the market, not the 23 percent that the industry has touted. At 16 percent, the royalty decline for Canadian artists is even less pronounced that previously expected with the private copying levy covering much, if not all, of the shortfall.
Even more interesting is the source of new Canadian music. Statscan reports that foreign controlled companies (the major CRIA members) comprise 85 percent of the Canadian retail market. Despite their dominant share of the market, the CRIA labels produced only 100 new Canadian releases in 2003, less than half the number of Canadian releases by those same companies in 1998 (and under three percent of their total releases).
The smaller Canadian controlled companies (of which there are far more - 13 foreign controlled labels to 287 Canadian controlled labels) released 804 new Canadian releases that same year, a drop of only 17 releases from 1998. The revenue story is similar as the foreign labels experienced a much sharper decline in Canadian revenue than did the Canadian labels.
What does this say?
Simply put, CRIA’s foreign labels are a tiny part of the development of new Canadian artists. They are responsible for only 11 percent of the total Canadian new releases and are almost solely to blame for the decline in the number of new Canadian releases. Canadian music continues to be released as it always has, it is just not CRIA’s foreign labels who are backing the Canadian music scene. Perhaps Ministers Emerson and Frulla might like to ask CRIA about these numbers the next time their lobbyists come calling with claims of protecting Canadian artists.
Michael Geist
[Geist is the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa. He can be reached by email at mgeist[at]uottawa.ca and is on-line at michaelgeist.ca.]
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First they ignore you, then they laugh at you, then they fight you, then you win
- Mohandas Gandhi
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 political representatives. 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.
Also see:-
Fair and balanced reporting - October 1, 2005
CRIA Laugh-In - October 2, 2005
Thieving Canadian students - August 9 11, 2005
October 28th, 2005 at 5:03 pm
Yeah, those corporate defenders of Canadian culture. Where would we be without their charitable lobbying and selfless agendas? Thank goddness we’ve got dumbed down politicians to buy their songs and keep our culture in tune.
October 28th, 2005 at 11:53 pm
I have a feeling that file sharing is the least of the industry’s problems; they just don’t know it yet. Take me for instance; I don’t file share at all. Nada. To me it’s just not worth the risks. They say your chances of winding up on the wrong end of the RIAA’s or CRIA’s legal guns are about the same as winning the lottery - but people DO win the lottery (not me unfortunately, but that’s another story). And I definitely don’t need another virus on my computer; it took me three weeks to get rid of one one time. I like to read the news here just to stay abreast of all of today’s DRM hardware issues. (For instance,I was going to buy a new TV until I read about the upcoming move to HD TV broadcasts. Now I will wait and see how all that pans out.)
But there’s so much free and legal promo music around on the net that I don’t have to do anything controversial or illegal to get new music. And what I find is that I keep moving further and further away from the music the record companys are putting out. I can listen to ANY genre I want ANYTIME I want ANYWHERE I want. I am no longer restricted to listening to the local radio, or my cable company, or any given store’s stocks that are DRM laden and commercially and community standards “approved” (Remember when stocking 2 Live Crew was a big deal ?). I find that I like a lot of the new, legal and free music. I like a lot more of it and I like it a lot more than I do the commercial “product”. I don’t see myself ever going back to the marketing “strait jacket” of old. And this trend seems to be growing.
Also, another article mentioned an artist (Jully Black) who had only sold 15,000 records but had seen millions of requests for downloads. I do have a lot of sympathy for her, but there is also this: if she had sold those same albums online in a lossless, non-DRM format for five bucks a download, she (and her band) would have made $75,000 by now. I wonder if she got this much by (if I understood the article correctly) going through the record company for sales.
October 31st, 2005 at 4:18 pm
Harvard Business School Study shows File Sharing has NO Effect on Record Sales.
This study was done in 2004.
How can anyone argue with Harvard Students?
Here is the whole study:
http://www.unc.edu/~cigar/papers/FileSharing_March2004.pdf
What methods does Statscan use to determine the cause of declining profits for Recording companies I wonder.
Who actually paid for Statscan’s study?