June 14, 2005 11:40 AM PDT
Study: Falling CD sales can't be blamed on P2P
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The Paris-based Organisation for Economic Co-operation and Development (OECD) said Monday that digital music piracy is a problem, but other factors--such as the rise in the number of entertainment sources--are more likely to have had a significant impact on music sales.
"It is very difficult to establish a basis to prove a causal relationship between the size of the drop in music sales and the rise of file sharing. Sales of CDs, as well as the success of licensed online music services are likely to have been affected to some degree by a variety of other factors, for example physical piracy and CD burning, competition from other, newer entertainment products and faltering consumer spending in some markets," the report said.
While the report found a "pronounced" fall in overall global CD sales of 20 percent between 1999 and 2003, and a particularly large drop in CD sales in the U.S., some countries, including France, Germany, Japan and the United Kingdom, are actually experiencing steady or growing CD sales.
In addition, the OECD questioned the viability of some music download business models and warned that the music industry needs to find a balance between reducing online piracy and developing models that are attractive to consumers. The industry also needs to provide existing and new participants in the online music arena with a growing stream of revenue for the legitimate distribution of recordings, the report said.
"Online music providers still seem to struggle making profits at current prices, with demand growing from low levels and having to compete against unauthorized downloading," the report said. "In the current, low-volume market, digital economies of scale have not yet been realized. Some of the fixed costs of labels to produce artists stay essentially the same as before. Moreover, the digital distribution of songs is far from costless."
Andy McCue of Silicon.com reported from London.
See more CNET content tagged:
online music,
factor,
CD,
file-sharing,
entertainment
But nowadays the music industry faces competition from other forms of entertainment more than ever. Movies, games, etc. People can't justify buying an entire album for one catchy pop tune that's doomed to fall from existence in six months. That's probably why the NOW! discs sell so well.
Maybe if they started signing artists with talent and popular music wasn't the crap it is today things wouldn't be so bad.
Sure P2P isn't entirely blameless. I'm certain plenty of people use it to get free music but I think a lot of them, including myself, use it as a vessel to share and experience new things. If I like it, I buy it.
I just hope the RIAA focuses on reinventing their aging business model rather than supplementing lost profits by suing 12yr girls for downloading a Britney Spears song.
But nowadays the music industry faces competition from other forms of entertainment more than ever. Movies, games, etc. People can't justify buying an entire album for one catchy pop tune that's doomed to fall from existence in six months. That's probably why the NOW! discs sell so well.
Maybe if they started signing artists with talent and popular music wasn't the crap it is today things wouldn't be so bad.
Sure P2P isn't entirely blameless. I'm certain plenty of people use it to get free music but I think a lot of them, including myself, use it as a vessel to share and experience new things. If I like it, I buy it.
I just hope the RIAA focuses on reinventing their aging business model rather than supplementing lost profits by suing 12yr girls for downloading a Britney Spears song.
This all started around 2001 when CD sales took a nose dive and of course the RIAA said it was all Napsters fault.
Of course there was a study done (I'd link to the study but haven't been able to find it online in a couple years) that showed how even if you showed every individual song downloaded from Napster as a lost CD sale (wildly overestimating the impact of P2P downloading on CD sales) that it did not come close to accounting for the drop in CD Sales.
The real reason is the .com bubble burst and the ceconomy downturn around that time. When people were not being paid six figures from coolwidgets.gone they natuarlly slowed or stopped spending on luxury items like CDs. Obviously not many people who were out of work altogether were seeing it as important to drop $18 for the latest Britney Spears CD.
This all started around 2001 when CD sales took a nose dive and of course the RIAA said it was all Napsters fault.
Of course there was a study done (I'd link to the study but haven't been able to find it online in a couple years) that showed how even if you showed every individual song downloaded from Napster as a lost CD sale (wildly overestimating the impact of P2P downloading on CD sales) that it did not come close to accounting for the drop in CD Sales.
The real reason is the .com bubble burst and the ceconomy downturn around that time. When people were not being paid six figures from coolwidgets.gone they natuarlly slowed or stopped spending on luxury items like CDs. Obviously not many people who were out of work altogether were seeing it as important to drop $18 for the latest Britney Spears CD.
Talk about shooting yourself in the foot.
Talk about shooting yourself in the foot.
Maybe music sales are down in part because radio sucks so bad these days. Personally I haven't listened to any commercial radio (Public Radio alone for me)for 2-3 years. I just can't stomach the souless, 3 song rotation, generic cloned format that every radio station on the continent broadcasts these days. Ever since the change in FCC regulation that expanded the corporate influence and ownership and lead to the death of the local DJ personality and the rise of centrally programmed playlists, radio has held no interest. OK, there are a few decent bands on the radio, but tell me why when tuning into the local "cutting edge modern rock" station I hear the same song 3 times in one day's commute along with the same heavy rotation staples I heard when I tuned out over 3 years ago. Yeah, The Red Hot Chilli Peppers songs rock, but let's face it, if I didn't buy the CD 5 years ago, I'm not going to go out and buy it today. And even if I went out and bought every album in rotation, that would still add up to what, 3 CDs per month?
No decent source for new music = no new interests = no new CD purchases. Heck, I don't even download much anymore... just not much that peaks my interest. I'm sure it's out there, but how to find it in corporate america?
Add into the mix the complaint common - that most CDs are pop ear candy with 1 or 2 good songs and a lot of bad filler and it certainly isn't very tempting to go spend $18 for a CD that I can't rip into MP3s or copy for my car.
Bad promotion, Bad content, and Bad delivery mechanisms... no wonder sales are down.
Maybe music sales are down in part because radio sucks so bad these days. Personally I haven't listened to any commercial radio (Public Radio alone for me)for 2-3 years. I just can't stomach the souless, 3 song rotation, generic cloned format that every radio station on the continent broadcasts these days. Ever since the change in FCC regulation that expanded the corporate influence and ownership and lead to the death of the local DJ personality and the rise of centrally programmed playlists, radio has held no interest. OK, there are a few decent bands on the radio, but tell me why when tuning into the local "cutting edge modern rock" station I hear the same song 3 times in one day's commute along with the same heavy rotation staples I heard when I tuned out over 3 years ago. Yeah, The Red Hot Chilli Peppers songs rock, but let's face it, if I didn't buy the CD 5 years ago, I'm not going to go out and buy it today. And even if I went out and bought every album in rotation, that would still add up to what, 3 CDs per month?
No decent source for new music = no new interests = no new CD purchases. Heck, I don't even download much anymore... just not much that peaks my interest. I'm sure it's out there, but how to find it in corporate america?
Add into the mix the complaint common - that most CDs are pop ear candy with 1 or 2 good songs and a lot of bad filler and it certainly isn't very tempting to go spend $18 for a CD that I can't rip into MP3s or copy for my car.
Bad promotion, Bad content, and Bad delivery mechanisms... no wonder sales are down.