Revenue declines? Who cares?
p2p view / p2pnet: Various Canadian legacy intermediary industry associations, for example branch-plant versions of foreign industry associations such as the CRIA, CAAST, and CMPDA, often tell us how much of a decline in revenue they’re observing.
They then ask governments to “fix” this problem.
I don’t doubt the major labels and similar associations have seen a decline in revenue. I also don’t doubt that there’s been a decline in revenue with the distribution channels they control, such as the retail of mechanical media.
But I strongly believe their plights shouldn’t matter to anyone but themselves.
The health of intermediaries such as the CRIA members has nothing at all to do with the health of the music industry. The relevant parts of the music industry are songwriters/authors, performers and their audiences/fans. The people are exploring a full spectrum of methods of production, distribution and funding, including some which skip these intermediaries.
Anything they do to increase their revenue by skipping the middle-man is obviously going to show up as a decrease in revenue for that unnecessary middle-man.
If the major labels, major studios, and major “software manufacturing” companies were reporting a greater than 90% reduction in their revenue, I’d still be saying, So what? Who cares? The only relevant people in this conversation are the creators and their audiences.
As a creator the ability of fellow creators to be able to make a living at their craft is critically important to me, and that’s I’m so actively involved in copyright and related public policy.
The middle men simply don’t matter, and in many cases they are themselves the problem we need a “solution” for.
Politically, we have thus far been stuck attacking the misinformation from these intermediaries,. They have been promoting their deliberate confusion between a correlation and a causal relationship when they claim any decline in revenue they have is because of unauthorized sharing.
We continue to point to the competitive issues (including growing competition from the relevant parts of the music industry) that more than cover the small loss in revenue which they falsely claim is from copyright infringement.
My hope is that it will not be too soon when the intermediaries can demonstrate massive losses of revenue, but politicians and policy makers are informed enough to ignore this irrelevant noise and invest resources in economists who will try to measure the economic and other aspects of the health of the creators.
Russell McOrmond – p2pnet contributing editor
[McOrmond is an independent author (software and non-software) who uses modern business models and licensing (Free/Libre and Open Source Software, Creative Commons).]
January 7th, 2006 at 4:55 am
If I had to guess why there was a decline in sales…beyond the fact that entertainment $$ are spread thin by so many choices.
It would be the rise of e-bays and amazons that make it easier to buy used cds and dvds and save $$.
It is efficiency of the market.
January 7th, 2006 at 6:18 am
This is part of the problem. Cartels are convincing enough, certainly with bennies for the legislators that these laws will help them survive. The reality is that they will never legislate financial success with crap products.
With the smoke and mirror campaign, they have done their best to say all the problems are counterfit and piracy. It is with absolute straight face that they can not envision that less and less are wanting their products. It is with the attitude we made it therefor it is guarenteed to sell.
Well here’s the news for them… NO IT ISN’T. I don’t want it and further the industry is daily alienating their customers. Those customers are saying we don’t want this, we don’t like it, and it isn’t worth the money. It is so bad that now the industry can’t even put up long term #1 hits. They are lucky if a #1 hit lasts one business quarter. With that sort of return, there goes the catalog sales, of which is 1/3 or thereabouts of their annual sales. There are no long term artists other than those of 30 to 40 years old.
Simply there appears to be no future for professional music with the cartels. Sales are drooping for the cd of legal sales and many stores are starting to carry more blank cds and shelf space for those blanks than they are carrying of the cartel offerings. Since business have to offer what the customer wants or not sell, that sort of shelf space put up for blanks tells the tale of what is important to the buying public.
On line legal sales are dismall. The one shining spot on the on line is Apple. But Apple isn’t really so much an on line seller of music as they are an on line seller of their main products such as the iPod. Apple pushes the product line at every point and chance. The music is as much a side line as it is a protection against lawsuits over the iPod. The online sales are so bad that they are still totaling the total sales since day one in trying to impress others that it is the place to be. With the glaring problems of incompatibility between gadgets and music services, no one really wants to invest heavily in a product that might not be “the thing” next year. If the industry chooses a different format to back, then Apple may well be an island to itself. Certainly as it is now, you can’t get a complete catalog to chose from with only one service. To access them all you must have a world of different devices to play them back and take them with you. Who wants that?
The industry are late comers to where they should have been foreunnersin leading the tech advances. They are playing catch up and it is so bad that they have gotten laws to advantage them while they try to maneuver into market share. Being too late, they have done nothing but hamper the process and are winning no friends in the marketplace with all this.
Revenue declines and who cares? We don’t, only the middlemen care and we are better off without their fingers in the pie for a service we don’t need anymore.
January 8th, 2006 at 3:45 am
I was watching BBC news a couple of days ago and there quite an interesting report about how the internet is allowing underground artists to get noticed more and more without having to sign with a record label for promotion. Stupidly, at the end of the report they said something about all this internet promotion and increased fan-base helping to get them a record deal at the end of the day.
Following this report was one about a BPI (British Phonographic Industry) report saying CD sales were down 15.7% in 2005. Then the punchline: piracy is to blame! Well, you had to expect it.
Of course, trying to blame reduced physical sales of product on piracy, it wouldn’t have helped to report an increase in digital music sales. So they didn’t.
The real reason for the drop in CD sales is more likely due to a combination of increased digital sales, the Sony rootkit fiasco and the boycott that followed.
Nice bit of spin from the BPI…
Tom
http://www.soundnet.co.uk
January 8th, 2006 at 5:46 pm
or maybe the answer was in the first story, more people are listening to the underground/indy artists (wow actual artists and not “content providers”)