The Big Music online music myth
p2p news / p2pnet: The p2p networks and Big Music’s escalating attempts to literally force ‘consumers’ into swallowing digital ‘product’ might just as well not exist, as far as the world outside the Net is concerned.
There, Apple’s iTunes is seen as a genuine corporate download service instead of the promotional software for iPod products that it actually is, and disingenuous statements from the four major labels via their various ‘trade’ organs such as the IFPI (International Federation of Phonographic Industry) are still taken seriously.
However, in the real world of online music, iTunes and Apple don’t exist and more and more people are opening accounts so they can take advantage of the free and almost free offerings available as p2p downloads.
“Digital music sales in the U.S., the world’s biggest market, have hardly budged in the past five months,” says a Bloomberg News story. “They almost tripled to 6.6 million downloads a week in the year through May, and were at 6.7 million in the week ended Oct. 23, according to Nielsen SoundScan, a unit of Dutch media company VNU NV.
“The iPod, with more than 28.2 million sold, isn’t providing the panacea that the music industry seeks. EMI Group Plc Chairman Eric Nicoli forecast in May that digital sales would help revive the $34 billion recorded music market. For now, they’re unlikely to offset falling CD sales that are causing global revenue to shrink for a sixth straight year.”
In fact, “Digital optimism seems to be crashing in on itself,” media analyst Simon Baker, who has a ’sell’ rating on shares of EMI, one of the Big Four, is quoted as saying.
“Downloads in the U.S. have alarmingly plateaued,” says Bloomberg News, surprised. “This has devastating implications for predictions that digital sales would grow exponentially.”
Suing their customers
However, all Bloomberg need do to find out why this is happening is spend an hour or so looking through comment posts on p2pnet, or any of the other sites carrying news on p2p and file sharing.
There, former punters are making it crystal clear they’re no longer willing to do nothing as EMI and its fellow members of Organized Music, Sony BMG, Vivendi Universal and Warner Music, penetrate them from the rear.
The Big Four’s bizarre sue ‘em all marketing strategy has innocent men and women, and even children, being terrorised by subpoenas meant to frighten victims into abandoning the p2p networks and indie music sites in favour of the ridiculously over-priced online corporate digital download stores
By suing their customers, the labels are on the one hand, turning them off buying physical and digital product, and on the other, promoting the very thing they’re trying to kill: file sharing.
Because the people, ex-consumers all, are angry and they’re striking back in the only way they can – by ignoring corporate offerings not only on, but also offline.
“Music stocks have declined while Apple soared,” says the long Bloomberg piece.
“Apple shares have climbed to $57.50 in New York from $9.50 in October 2001, when the iPod went on sale. Fiscal fourth-quarter net income at Apple, which also makes Macintosh computers, rose to $430 million from $106 million a year earlier, as it sold 6.45 million iPods, the company said Oct. 12. Revenue from iTunes Music Store and iPod accessories accounted for just $265 million of Apple’s $3.68 billion in sales in the period.”
And yet, “The shares of EMI, whose roster includes Coldplay and The Rolling Stones, have dropped 20 percent this year to 212 pence in London. Warner Music Group Corp. Chief Executive Officer Edgar Bronfman Jr. has seen his company’s stock fall to $15.47, below its May initial public offering price of $17.”
The mainstream media have yet to grasp the fact that iTune users live in a world unto itself. They’re willing to spend a dollar and more on inferior, lossy digital downloads, but they by no means represent the majority of people who look to p2p and the Net to answer their wants.
The ” leveling off of U.S. downloads shouldn’t cause alarm given the ample digital opportunities elsewhere in the world from song downloads to ring tones for mobile phones,” the story has IFPI head John Kennedy saying.
But what else can he say? That the hundreds of millions of dollars spent on legal fees, PR handouts and other propaganda items have been completely wasted? That the sue ‘em all campaign is having absolutely no effect on p2p file sharing, which is exploding rather than diminishing?
“We’re still optimistic that figures for the year will show a doubling over 2004 or even a tripling,” Kennedy says, referring to overall digital sales. “Music sales always vary sharply by geography and season, so it’s dangerous to read too much into a short period of time in the U.S., he says.”
And if that doesn’t prove to be the case, not to worry.
The entertainment cartels and their opposite numbers in the software industry are adept at faking numbers, confident in the knowledge that the mainstream media will treat the ’statistics’ as though they’re real and that when the companies are caught out in their lies, the same mainstream media will turn a blind eye.
“There will be variable pricing, multitier pricing,” Universal Music CEO Doug Morris, 66, said Oct. 6 at a meeting of financial analysts in London. “The issue is going to be when and who blinks first.”
For multi-tier pricing, read boost beyond the 65- to 85-cent wholesale prices already being charged – and ignored by the vast bulk of people who populate the Net. They’re not blinking. They’re not even looking.
“More than 600 million songs have been sold through iTunes since Apple started the online music site in April 2003, Jobs said in September. The company has more than 10 million account holders, and sells 1.8 million songs a day globally.”
Against that, many more than one billion digital music files move between and among p2p file sharers not every year, but every month.
A recent USA Today story has GartnerG2 analyst Michael McGuire stating that since the record labels began suing song-swappers in 2003, use of file-sharing programs has skyrocketed.
In fact, as the figures on the left from p2p research company BigChampagne show, p2p file sharing has doubled since 2003.
The Big Four record label cartel’s contentions that there’s a viable corporate online market with 300 ‘legal’ players is sheer nonsense.
Meanwhile, a wry comment post under the latest Big Music sue ‘em all story puts it into a nutshell:
“Confucius say: Man who screw customers soon have no customers to screw.”
Jon Newton – p2pnet
Something you think we should know? tips[at]p2pnet.net
See:-
Bloomberg News – Apple’s IPod Success Isn’t Sweet Music for Record Company Sales, November 2, 2005
sue ‘em all story – 745 new RIAA p2p victims, October 27, 2005
faking numbers – Hollywood lies, corporate bull, November 1, 2005
USA Today – BitTorrent gets $8.75M from venture-capital firm, October 26, 2005
November 3rd, 2005 at 12:45 am
It may seem odd to the computer/net savvy set that frequents sites such as p2pnet, slyck. etc…, but there are a lot of people out there who STILL don’t know what P2P even is. How many of those n00bs heard about file sharing as a result of RIAA lawsuits? And of those who were exposed to the idea, how many said to themselves, “Hey, I gotta try that!” If your friend’s friend’s friend gets sued by the RIAA for X-thousand dollars because they shared some songs you are probably going to hear about it, even if you don’t read USA Today (McNews)… Organized criMusic learned nothing from the Napster fiasco. They continue to be P2P’s biggest, best advertiser. Their whole approach to the marketplace serves as a strong inducement to share music via P2P in order to avoid the ever widening pitfalls of their horrific attempts to control every aspect of how and what music we listen to. I don’t know the answers, but I know the direction Orgainized criMusic (and hollywood) are trying to push things is just all wrong.
November 3rd, 2005 at 6:54 am
I agree with the above posters idea that the cartels are the best advertisement for the p2ps going out there. The closure of Napster was when I was “informed” about p2p. Before that I had no clue about downloading nor about p2p. I was a paying member at AudioGalaxy when it too was shut down.
In all this publicity, I feel the RIAA knows exactly what they are doing and encouraging it as best they can with psychological methods. What better way to steer people to a place where they can make money off them (whether they sell sorry products or not) than by telling them this isn’t accepted practice? Or that it is something everyone but YOU are doing and you are missing out? Notice that the cartels are putting out no where near the product they once did. Notice that what does come out isn’t very good quality. It is like they are producing cheap entertainment with poor quality only so they can point to the fact they are continuing to stay in the game of producing and selling. It looks more like they are looking to infringers for the profit line instead of the stated line of “education” to me. Follow the dollar bill folks, that will always lead you to the source and intentions. While it is true that those taken to court aren’t going to be the big profit makers, those that settle out of court are a different matter. No one has to ask when it is viewed in this matter why so few do go to court.
November 3rd, 2005 at 8:55 am
So growth in paid downloads has plateaued. And the Biz reaction is to try and raise prices? Doh! Yup, that’ll work!
It’s really simple. Give us a product we want at a price we’re prepared to pay. That’s LAME 192Kb MP3s with no DRM at $0.10-$0.20 a shot.
November 3rd, 2005 at 6:23 pm
If the victims win, then others will wipe out the **AA’s profits by going to court as well. Until then, the **AA’s will continue to rely on fear and intimidation to extort money out of many new victims. I believe that the cartels will do averything they can delay a courtroom verdict (if the verdict has not been bought). This is on of many reasons why I recommend non-internet filesharing such as FreeWan or sneaker net. If one has to share over the internet, I recommend doing so with only trusted people. The **AA’s power comes from the fact that they can search computers without the owners knowing who they are.
The **AA’s will NEVER stop or even significantly slow down filesharing. They will only force people to invent better and faster ways of doing it. Imagine a multi gigabyte DVD downloading in minutes instead of days. That is exactly what happens when one uses a FreeWan Cells College Campuses are the ideal places for setting up FreeWan Cells because there are a large number of computer savvy people who like to listen to various styles of music as well as watch entertaining video for low prices.
The cartels will soon find that they have nobody to sue. They will also see their members go bankrupt due to poor quality product and an alienated ex-punters. Intimidation, threats, and harrassment will be beaten by newly independent players utilizing inexpensive distribution methods.
November 3rd, 2005 at 10:59 pm
The Days of the RIAA / MPAA racket is over….. Their days of CONTROL of the distribution channel is OVER — and that means their little racket of perpetual money-laundering exclusivitity is over — OVER!
There’s nothing they can do… the more they push, the more resistance is shown.
Don’t they know the second law of Physics?! — “For every reaction, there is an opposite and equal reaction.”
November 4th, 2005 at 7:44 am
Sounds good, but “hot demand” ones can probably be sold for $0.25 a shot (makes you think the Music Cabal and Movie Cabal are “dealers” — actually they ARE).
December 19th, 2005 at 5:47 pm
As an artist, I think it is interesting how smug your author Jon Newton is about file sharing. The same individual that just a few years back would have immediately notified the music store manager of a kid who just stole a CD, will now turn a complete blind eye to pirating music. Stealing is stealing, but somehow Jon seems to think because it happens on the internet it is no big deal. I promise if someone hacked into his bank account and stole his money or his financial identity over the internet he would be concerned. Jon seems to think that only Apple and EMI are hurt by file sharing, but when artists don’t get paid ultimately it is the consumer who is hurt. Lower revenues means there are less artist development deals out there, and record companies bet on only sure things. This translates into a lot of great music that is never developed because there isn’t money available to do so. For most artists music was never a tremendous way to make money, but many made beautiful music and found a way to get by. I will not be surprised if many if not most of those artists will be pushed out of the business in the next few years if file sharing continues its expansion.
VC Austin Tx.