Music industry watch

Conclusion: The RIAA is full of shit

That the RIAA is full of shit might've been a forgone conclusion for a lot of people. However, when it came time to evaluate their claims that file sharing impacts CD sales, I wanted to research the details before coming to a conclusion. The Numbers, numbers, numbers panel at the Future of Music Policy Summit gave me lots to think about and stew over. Koleman Strumpf's position that file sharing does not impact CD sales won me over in the end -- Koleman acknowledged that there are many factors that could explain why CD sales have dropped in the last couple of years.

Stan Liebowitz's steadfast refusal to acknowledge that anything other than file sharing is responsible for the drop in CD sales is fishy. But not as nearly as fishy as the allegations that the RIAA is doctoring the sales figures in order to support their statements:

The RIAA reports a sale as a unit SHIPPED to record stores, not as a unit sold to consumers at those record stores. Now here's where things get interesting: The RIAA forecast a 7 percent decline in recorded music sales for 2004, but data from market research outfit Soundscan, which measures point-of-purchase sales, shows a 10 percent increase in music sales when comparing the first quarter of 2004 to the first quarter of 2003. What does this mean? Sales of recorded music haven't declined, shipments have. Retail outfits are moving increasingly toward a just-in-time sales model. Rather than order more music than they need and eat the overrun or pay to ship it back to the distributor, they now order only what they think they need. This doesn't mean retailers are selling less music (a retailer can order 1000 CDs one month and sell 600 of them, 800 CDs the next and sell 700).

There is a big difference between sales and shipments, especially when everyone is trying to tune down their inventory.

So, my conclusion is that the RIAA is full of shit. They are manipulating the numbers in order to cry a river to the congressmen so they can pass stronger and more draconian copyright laws that will give them more power and stifle creativity even more than the laws do today. Stan Liebowitz is full of shit too -- and probably paid by the RIAA.

I'm convinced that the downturn in CD sales can be attributed to:

• The downturn of the economy.
• The decreased output of the industry.
• The decreased quality of the content produced by the industry.
• Decreased radio listenership, which drives CD sales.
• The decrease in freely available spending cash of youth, as caused by wireless communication, video games and other electronic gadgets.
• High CD prices (A soundtrack costs nearly the same as the movie itself.)

But not file sharing. If file sharing had any effect, I would say its positive, since it exposes more people to music and gives users a chance to listen to the music before buying the CD. File sharing allows people to break free of the bonds of radio, MTV and other media outlets that push crappy music on people.

I'm not surprised by my conclusion. We all know the RIAA is a sheisty bunch of hucksters -- I was just wondering if there was an ounce of truth to what they are claiming.

Posted by Mayhem at May 18, 2004 10:46 AM