Organized Music sings the blues
p2p news / p2pnet: Are you sitting comfortably, handkerchiefs at the ready? Then we’ll begin.
“It’s sort of a bleak holiday season at the end of a bleak year,” says Jim Urie, president of Universal Music Group’s Universal Music & Video Distribution arm, quoted in the Wall Street Journal. “Retailers who specialize in music say that their outlook is worse than bleak. Music sales at Virgin Megastores’ 20 North American locations are down nearly 20%, according to Simon Wright, chief executive of Virgin Entertainment Group. Other music retailers report similar numbers.”
In fact, “Things are so tough that Rob Roth, owner of the Vintage Vinyl music store in Fords, N.J., says that being able to simply keep pace with last year’s sales puts him among the lucky few. His new motto: ‘Flat is the new up’.”
Traditionally, Christmas is, “a time for the music industry to relax and watch the money roll in as big-name releases all but sell themselves,” says the WSJ. “The stocking-stuffer effect is generally strong enough that the season generates 40% of the industry’s annual revenue.”
However, 2005 is different. During the “crucial” Thanksgiving week, for instance, the top 10 albums sold 40% fewer copies than the top 10 albums the same week in 2004, says the story, going on:
“Album sales so far this year are down 7.8%, according to Nielsen SoundScan, compared with the same point a year ago. Sales of individual digital tracks on services like Apple Computer Inc.’s iTunes Music Store have increased – but not nearly enough to offset the slide in CD sales. According to an estimate from SoundScan, overall sales of recorded music are down about 4.5%, if one considers 10 individual tracks the equivalent of an album.”
What does this suggest? That “despite a brief uptick in music sales at the end of last year, the music-industry meltdown that began more than five years ago is far from over.”
And what’s responsible? A combination of factors including, you guessed it, file sharing, better known to the mainstream media as online piracy.
But that’s not all, concedes the story. “CD burning, high prices and competition for consumer dollars from videogames and DVDs” also play their part.”
There is, however, another factor in play.
The Net.
For the first time since Thomas Alva Eddison began selling wax cylinders, the music industry is having to deal with an informed customer (NOT consumer) base whose constituents can, and do, communicate with each other via blogs, emails, IM, chats, text messaging, and so on.
And what they’re saying is: We have a choice, and we’re exercising it.
If the record labels think their persecution of online customers who include schoolchildren and and disabled mothers is going unnoticed offline, they’re wrong.
The WSJ doesn’t mention the failure of Organized Music (Sony BMG, Vivendi Universal, EMI ands Warner Music) to accept the reality that it’s now in the digital 21st century and not the physical 1970s and 80s and that its business models need to be updated accordingly.
OM’s members are in addition being found guilty – and very publicly – of one seamy practice after another and if they believe it’ll all just go away, they’d better think again.
It’s not going to get better, it’s going to get worse. For the Big Four.
But it’s going to get better for us as more and more options to stale and over-priced formulaic corporate ‘product’ continue to become available, and as more and more avenues and means of communication open up.
Also read:-
Wall Street Journal – Silent Night for Music Sales, December 16, 2005
December 17th, 2005 at 12:08 pm
Geeze, according to all I hear, you are getting just what you deserve cartels. Couldn’t happen to a better bunch.
When not in the news for the latest crime, be it payolla, false critics to help puff your own peice or stealing from the artists; then it is sueing your customers, bullying the internet, pushing lawmakers, and calling the customer a theif.
Prices are so outrageous that it costs the same for a movie dvd as for one of your cds; then you want to add DRM, spyware, rootkits, and other assorted goodies to the pile for free. At the end of the day, the product is more hassel than it is worth to the average buyer. That’s hardly getting our moneys worth.
Then there is the shaft you have continually given the artist, either through outright ripping them off, or stifling the sales with the addition of the DRM and rootkits. Mostly artists are wising up that you do nothing but act as a barrier between them and their fans. The rootkit had artist apologizing for what they didn’t do in order to try and at least help the customer understand where the problem is.
Then there is the money saving that was done by dropping those artists that weren’t the very top of the list in hot sellers. So where did you expect the next artist tree to grow you could pick? Those artists that were the slow steady sellers were what got you through the hard times like now but you dropped them, remember? Those sales aren’t there anymore. No one but the cartels see the same value you want for the product. No one else sees it as worth it anymore. So help us all out and include a few more rootkits in those cds, pay a few more radio stations, and sue a few more potential customers.
Shhh… Was that a meteor I heard???
December 17th, 2005 at 12:30 pm
The authir did not consider this.
http://www.boingboing.net/2005/11/14/sony_anticustomer_te.html
December 17th, 2005 at 12:55 pm
The survey estimated that 16 per cent of the UK population has an MP3 player, nearly two thirds of which were bought in the past 12 months. ‘Convenience’ and ‘portability’ are the key reasons for owning an MP3 player.
http://www.vnunet.com/vnunet/news/2147620/mobile-players-unfilled
Lets see now, record companies make the cd’s inconveinient to buy (you have to go out of your way compared with P2P and its expensive) and non interoperable even dangerous (DRM).
How to be a Marketing Genius
http://dilbertblog.typepad.com/the_dilbert_blog/2005/12/how_to_be_a_mar.html
When something is free, that’s what people expect to pay for the next one.
December 17th, 2005 at 1:43 pm
Their end is inevitable. They’ve been gnawing at their own legs so long now that they have nothing left to support them. Any business that doesn’t respect the customer is doomed to fail. In the end, they will be in the history books as the perfect guide to corporate self destruction. Suing customers to get them to buy product that they are purposely crippling. What business school teaches this as a guide to success? It doesn’t matter how many laws they get passed, they’ve lost everyone’s respect, and they have no clue how to get it back. It can’t be bought and it can’t be legislated.
We see industry studies all the time, but here’s one I’d like to see. Obviously those that have been attacked by Big Music are gonna want nothing to do with them in the future, but how many lives does each one of their actions really affect? I’m talking about wives, husbands, children, mothers, fathers, cousin’s, friends, etc. How many friends and family members are lost customers due to a single lawsuit?? They all see the ugliness first hand as well. Let’s use 10 as a nice round unscientific number and apply it. 17,000 lawsuits could potentially equal 170,000 lost customers purely out of disgust in two years time. And this does not even figure in the DRM backlash and the internet word of mouth.
I think the writing is already on the wall.
December 17th, 2005 at 1:46 pm
“…they’ve lost everyone’s respect, and they have no clue how to get it back. It can’t be bought and it can’t be legislated.”
I should have added that it can’t be extorted either.
December 17th, 2005 at 2:23 pm
It must suck for them to be forced to realize that they don’t have a God given right to exist. For some reason, though, I just don’t care:)
December 17th, 2005 at 4:03 pm
Yes, funny how the rootkits are never mentioned.
December 17th, 2005 at 4:49 pm
Following some reports that sales for certain CDs had increased following the Sony BMG DRM scandal, I was beginning to wonder if there would be a drop in sales at all.
You had to expect them to try and shift the blame onto file sharers, though.
December 17th, 2005 at 5:47 pm
Dunno ’bout you but I have less money in my pocket at the end of the week this year compared with last. Also I got two DVD’s today for $9.95, CD were much more expensive and I don’t know any of the artists on the cd’s, so I don’t know if the nephews will like them. I also took a consious decision to avoid any discs that don’t have the cdrom logo, on the grounds these have been infected with DRM.
December 17th, 2005 at 6:13 pm
If the music isn’t any good, people won’t buy it, and there will be a downturn in the music industry. Duh.
The music industry has long since abandoned all pretense that they are interested in producing a quality product. They are in it *strictly* for the money, and that means manufacturing low-risk music that they think people will buy.
If there is a downturn in music sales, the record company execs won’t blame the music, they’ll blame the customers. “We can’t be losing money because our music sucks; we spent $X million on market research, the hottest jailbait talent, marketing tie-ins, promotion, and market saturation! It must be because of those evil file sharers! That’s why they’re not buying our music! It has to be! It’s all their fault!”
Unfortunately, that means that before the music industry wakes up and discovers that its been digging its own grave (sleep-digging?) it will continue to punish all the law-abiding purchasers of legitimate music with increasingly restrictive DRM in a vain attempt to stop the “evil file sharers.” Anyone with even a rudimentary grasp of good business practices knows that the fastest way to bankrupcy is to punish your own customers. The record companies, in their unique position as a near-monopoly, can probably get away with this for a little while longer before the backlash. But the backlash is coming, and it will be a lot messier than a “slight downturn in sales.”
December 17th, 2005 at 8:24 pm
Organized music has been shafting the artists and the songwriters through the scam contracts and back room accounting no one can see. in the end the songwriters and artists that have the most talent have entered other proffessions or are working essentially underground because of the thievery of record companies (the artist tricksters) and music publishers (the copyright hijackers).
Then the customesr have been shafted too, through payola and absurdly high prices, where a cd that cost $1.00 to manufacture and ship sells for $15 to $20 and the cd is generally full of worthless songs.
Because music has been going downhill in quality in the last 50 years, organized music cannot stand the winds of change.
The music racket days are numbered.
Rafael Venegas
http://www.gvenegas.com
December 17th, 2005 at 9:23 pm
Yesterday I went to a big box store looking for presents for my kids. When I walked down the CD aisle I was surprised to see that they had more shelf space reserved for blank cd’s and dvd’s than they did for prepackaged music discs.
December 17th, 2005 at 9:31 pm
A sign of the times.
December 18th, 2005 at 12:27 am
They might not be completely blaming their sales downfall on file sharing in the national media, but they sure are payolaing local news stations to run pure propaganda ads against file sharing. This lovely pile of crap recently ran on CBS 4 Local News here in Boston under the title “Special Report”
http://cbs4boston.com/specialreports/local_story_339200212.html
December 18th, 2005 at 12:50 am
Send your corrections to newstips@cbs4boston.com
December 18th, 2005 at 10:36 am
I heard a few years ago that less than one in 20 ppl will complain to whoever they have the complaint about directly, but that they will complain to about 10 of their friends, family, etc. This was back before the net tho.
It’s probly still only 1 in 20 would try to contact the company they have the complaint about, tho perhaps a higher percentage would just complain on their forums. I’m sure the net means a whole lot more ppl can hear that their complaint is not the only one and that they are not alone, than ever before.
December 18th, 2005 at 11:22 am
The problem with these guys is essentially the same as the problem with all companies owned by shareholders. Money is everything. But why? When publicy listed companies turn around and raise fees and charges insisting they are “customer focussed” ppl often think “huh? run that by me again?” but the problem is, the general public are NOT the customers. Here’s the way it works.
These companies are all in the same business, the music/movie/bank/insurance/etc etc etc are NOT in different industries, they’re all doing the same thing. Providing a product called “dividends” to paying customers called “shareholders”. It’s like a subscription. You buy so many shares you get so many dividends each year.
The general public are the suppliers of the raw material for dividends, called “money”. The companies trade products and services for this “money”, process it and turn it into the finished product, the “dividend”. Unfortunately this process is very inefficient, with companies that end up with dividends of 10% of the total “money” they gathered considered to be doing pretty well.
To try and reduce this inefficiency the companies engage in “cost cutting” ie sacking staff, and raising the prices of their products and services. They also are continuing to lobby govts to get rid of those annoying “tax” expenses govts seem to expect to be paid. The general consensus among the companies is that if the govts want money they should buy shares or just get it off all those suppliers and stop bothering the companies.
Also competition is a really bad thing. It seems there are only fixed numbers of customers (shareholders) out there and having to fight for them with other companies just increases the inefficiency by unacceptable levels. This is why companies spend so much time and effort attempting to elminate all forms of competition.
If they succeed in this, then the customers (shareholders) will have to get their subscriptions (shares) from the winning company and that company will get so much market share and increased revenue, it’ll be great!
So in summary, the shareholders are the customers, the general public are the money suppliers and the tax dept is just an expense the companies would really like to get rid of, but all their lobbying about this hasn’t worked yet. So when a company rips you off yet again, all the while protesting that they are very customer focussed, now you’ll know they’re right. It’s just that YOU are not the customer they have in mind.
In this case, the music industry is very worried about being unable to supply enough product (dividends) to their customers (shareholders) because for some strange reason, the suppliers (general public) aren’t trading as much raw materials (money) for their products (crap) as they should be. Demanding that the suppliers (general public) do more trading of raw materials (money) for the products (crap) also doesn’t seem to be working either.
Yes i realise the way i’m describing the situation represents an unsustainable business model that can’t possibly last. You’re right. It can’t. Thats why all the constant merging, demerging, spinoffs, reinventions etc etc etc etc. It IS unsustainable and the music industry and movie industry are going to discover this the hard way. Soon, i hope.
December 18th, 2005 at 5:51 pm
That article is so full of mistakes it made me laugh.
Fire sharing?
“Lyons says it is helping students understand the difference between legal and illegal.”
‘Legal’: Costs money, uses DRM, which as the article states, you can’t copy it to your iPod.
‘Illegal’: Free, no DRM – you can copy it to your iPod.
“[Traci Logan] admits this is an uphill battle.”
Made harder for the fact they deliberately make it harder for people who have paid for their ‘product’ to use it how they want to.
Hopefully they’ll continue to deny the fact that DRM is helping to dig them an early grave.
Alternative ways of doing business will pop up, even if they are not backed by the RIAA.
December 19th, 2005 at 5:39 pm
“You can get nasty viruses attached to illegal music”
These people should go jump in a lake with the rest of the RIAA retards. mp3’s don’t contain viruses. We don’t need this kind of brainless reporting (if you can call it reporting…).
December 20th, 2005 at 2:39 pm
Mwahahahaha! Now that’s more like it! I look forward to the day when all CDs and DVDs that you see in the shops are blank ones.
May 16th, 2007 at 11:50 am